GOP Proposes Cuts In Prevention To Keep Student Loan Interest Rates From Doubling

House Speaker John Boehner (R-OH) announced on Wednesday that the House will take up legislation to extend the Bush-era 2007 College Cost Reduction and Access Act, a measure to prevent interest rates on subsidized Stafford student loans from doubling from 3.4 to 6.8 percent in July of this year. The decision comes after President Obama urged college students across America to call, tweet, and Facebook their members of Congress and ask them to pass the legislation.

But Boehner’s proposal would finance the $5.9 billion cost of maintaining the 3.4 percent interest rate for one year by repealing the Affordable Care Act’s Prevention & Public Health Fund, financing that’s designed to help states and communities fight chronic conditions like heart disease, cancer, stroke, and diabetes, and ultimately reduce health care costs. During a press conference yesterday, Boehner characterized the Fund as an affront to small businesses:

Today I’m pleased to announce that on Friday the House will vote on a bill to extend the current interest rate on federal student loans for one year. We will pay for this by taking money from one of the slush funds in the president’s health care law. […]

“Listen, the rising cost of tuition is a serious one for students. I know this issue well. It took me seven years to work my way through college, working every job I could get my hands on. And what Washington shouldn’t be doing is exploiting the challenges that young Americans face for political gain. And it shouldn’t be sticking small businesses with a health care law that’s…making it more difficult for them to hire workers.”

In reality, the Fund is an essential tool to help re-orient the American health care system towards prevention of chronic conditions, which are “responsible for 7 of 10 deaths among Americans each year and account for 75 percent of the nation’s health spending.” The Fund will “invest $12.5 billion over the next ten years (FY2013-FY2022) in effective programs proven to prevent disease and injury.” Republicans have long considered prevention a key offset, however, scoffing at its investments as wasteful spending, or as one Republican Senate aide described it, a “slush fund for jungle gyms.” Boehner’s proposal would eliminate the Fund and rescind all unobligated balances, including money being spent this year.


Yet the GOP had supported increased federal funding for prevention before Obama embraced it, even attempting to take credit for it as a Republican idea:

– Sen. Jon Kyl (R-AZ) took to the Senate floor and proclaimed that “one of the things we did in the health care legislation was to provide a lot of different incentives for preventive care, for screening to try to help people avoid illnesses on the theory that it would be a lot cheaper if we didn’t do a lot of treatment that was unnecessary.” [7/12/2010]

– Sen. Chuck Grassley (R-IA) said the law’s emphasis on preventive care is good “because it costs less to keep people well than to treat them when they’re sick.” [10/18/2010]

– Sen. Mitch McConnell (R-KY): “Congress should be able to work together on our practical ideas that the American people support, such as reforming our medical liability laws to discourage junk lawsuits…encouraging wellness and prevention programs that have proved to be effective in cutting costs and improving care.” [8/26/2010]

– Sen. Saxby Chambliss (R-GA): “I am an original cosponsor of S. 1099, the “Patients’ Choice Act,” …. The legislation would make health care coverage accessible and affordable for all Americans through private insurance coverage, while also promoting prevention and wellness which can improve lives and lower long-term medical costs. [7/19/2009]

Sen. Lamar Alexander (R-TN) has also proposed to offset lower loan rates by requiring individuals or families who receive subsidies within the exchanges to “pay back a greater share of any excess subsidies,” while legislation offered by Senate Majority Leader Harry Reid (D-NV) would pay for the lower interest rates by requiring “shareholders in S-corporations — typically small-sized businesses — to pay payroll taxes from which they’re now exempt.” House Democrats have proposed “ending unwarranted tax subsidies to big oil and gas companies” to finance the measure.


Congress has already cut $5 billion from the Fund to pay for legislation to “renew a payroll tax cut that benefits 160 million workers, as well as extending benefits to millions of unemployed Americans.” As a result, the fund was supposed to reach $2 billion in fiscal years 2015 under current law, but now “won’t hit the $2 billion mark until fiscal 2022.”