How Badly Does The GOP Want To Double The Interest On Student Loans?

Indiana Sen. Dick Lugar, a mainstream conservative, didn't vote Tuesday when Harry Reid tried to break the Republican filibuster against the legislation that would prevent the interest rate on student loans from doubling in July. Lugar didn't vote-- he surely would have backed the filibuster-- because he was, as you know by now, back in Indiana trying, without success to stave off a primary from the "teabaggers"... and funded by Wall Street. A primary factor in Lugar’s defeat last night stems from the power of the banksters' craven lobbyists.

The Indiana Republican can be viewed as a demonstration of Wall Street’s political muscle. In the words of Politico, “The banking industry is making an example of Sen. Dick Lugar.”

In a rare loss for Wall Street, the Senate last year rejected legislation to delay a rule to limit the amount banks can charge businesses for credit card swipe fees. The financial industry mounted an incredible lobbying campaign-- as Bloomberg reported, banks hired high priced K Street hacks, used conservative blogs like RedState, and developed Beltway advertising-- to pass the measure. But a coalition of big box retailers, like Wal-Mart and Target, along with small businesses and other vendors, persuaded enough legislators from both sides of the aisle to kill the measure and limit the fees. The rule affected some $16 billion in bank profits.

Lugar was among the few Republican senators up for reelection in 2012 to vote against the banks. As Anna Palmer and Robin Bravender reported, bank lobbyists decided early on to use the Indiana primary today to make an example out of Lugar:

Financial Services Roundtable’s Scott Talbott, Lisa Nelson of Visa, Peter Blocklin of the American Bankers Association and Vincent Randazzo of PNC hosted an inside-the-Beltway fundraiser for Lugar’s opponent, Richard Mourdock, this week. The Electronic Payments Coalition, which represents the industry, also sent out an email fundraising blast that included the event. [...]

The ABA supported Mourdock on June 23-- soon after the Senate vote on the swipe fee amendment-- sending him a $5,000 check, according to federal campaign filings. [...]

“There are just a lot of sour grapes out there,” said a GOP financial services industry lobbyist.

But with more battles over swipe fees on the horizon, bankers want to make it clear that there will be consequences for Republicans who vote against them.

Lugar has also been pummeled by front groups tied to the financial services industry. The Club for Growth, which is funded by several highly ideological hedge fund managers and investors, has aired numerous attack ads against the senator. FreedomWorks, run by Dick Armey, who served as a bank lobbyist after retiring from Congress and C. Boyden Grey, a current lobbyist working to chip away at Dodd-Frank, also ran anti-Lugar ads.

It's that kind of muscle, supercharged by the most blatantly corporate-subservient Supreme Court in the history of America, that led to the roll call on the student loan filibuster Tuesday. Reid's cloture try managed to garner 52 votes, 8 short of what was needed (really just 7 shy of the goal because he voted with the GOP so, by arcane and idiotic Senate rules, he can bring it up again). Every Democrat voted "Aye" and every Republican voted "Nay" except Olympia Snowe, who voted "present" (and the 2 absent conservatives, Mark Kirk and poor Dick Lugar. So along with the congenital reactionaries like David Vitter, Jim DeMint, Pat Toomey, Mike Lee, Tim Johnson and Marco Rubio, self-proclaimed "mainstream" Republicans like Susan Collins, Scott Brown, John McCain, Lisa Murkowski and John Thune all voted to guarantee that student loan rates would double. The White House statement expressed what, I believe, most Americans think about this obstructionism by the Republicans:

It is extremely disappointing that Republicans in the Senate today voted to ask millions of students to pay an average of $1,000 each in order to protect a loophole that allows millionaires to dodge payroll taxes. On July 1, more than 7.4 million students across the country will see their interest rates double unless Congress acts. We’re pleased that despite failing to address it in their budget, Republicans in Congress now profess to be concerned about this coming rate hike. But now it’s time for them to stop refighting old political battles and prove they’re serious by proposing a real solution to keep rates low for students without burdening middle class families or undercutting preventive health care for women. We look forward to continuing to work with Congress to prevent rates from doubling and ensure that students continue to get a fair shot at an affordable education.

The battle yesterday was over a loophole that allows wealthy people to avoid paying Social Security and Medicare taxes like normal people. This is the GOP base and the GOP would rather super-serve this small group of millionaires than worry about millions of Americans struggling to get a college education. As usual. It allows people who make over a quarter million dollars a year to file their taxes as a small business (thereby avoiding the taxes). If that loophole were closed it would pay for the $5.9 billion loan rate freeze. Deranged right-wing imbeciles are screaming it punishes the so-called "job creators," even though the only jobs they seem to be creating are for corrupt, reactionary politicians who look after their interests.




UPDATE


Boehner and his GOP cronies may have their own disingenuous way of spinning this issue, but as Lee Fang pointed out this morning, it was all about the Chamber of Commerce, the American Banking Association and other corrupt-- if not criminal-- enterprises that exist to bribe Congress so that, like in this case, they do the wrong thing, tossing their own constituents under the bus for the sake of the corporations that finance their slimy careers.

Republicans blocked the student loan interest rate bill simply because big businesses and campaign contributors lobbied aggressively against closing the loophole. The National Journal published a letter from a number of Beltway lobbying groups-- among them, the U.S. Chamber of Commerce, which represents many multinational corporations, and the American Banking Association-- protesting the measure. These lobbying groups have wide sway over both parties, but particularly the GOP.