Stop the Student Loan Interest Rate Hike Act of 2012--Motion to Proceed

Floor Speech

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Mr. BLUMENTHAL. Mr. President, I am honored to follow my distinguished colleague from New York and his very powerful and eloquent words on a subject that concerns all of us, not only in New England but across the country. I have heard from countless students in Connecticut where we have some of the best educational institutions in the country. I know my colleague, Senator Shaheen from New Hampshire, has been very much in touch with the people of her State, and particularly young people there, striving--as they are in Connecticut--for more affordable education.

We are talking about the future of our country. There should be nothing contentious, certainly nothing partisan about this issue of financing the future of education and particularly student loans. This ought to be a common cause, and it ought to be bipartisan. I believe eventually it will be because we need to come together on this issue for the sake of young people whose lives are very directly and immediately impacted by this issue in Connecticut and across the country. The impact is not only on their lives but our competitive economy, increasingly a global economy in Connecticut that depends more and more on exports and more and more on talented and gifted and trained, educated skilled people. We need them in Connecticut, and we cannot permit the interest rate on Stafford loans to rise to 6.8 percent from its present rate of 3.4 percent.

Even now the debt with the present 3.4 percent is crushing to many of our students who are struggling to pay their student loans with that lower interest rate.

Stanley Knotowicz--who contacted my office, who is seeking solutions in good faith, constructively, and positively--reached out to my office because he experiences the same financial hardships facing millions of recent graduates across the country. He is paying $70 a week for gas. He is providing financial support for his grandmother in her late eighties who might lose her home. He is trying to save money to get his own apartment. He is one of the many students in Connecticut and across the country who have reached out and my office has helped him.

I have also heard from Brenda Kasimir, a mother who would be crushed if she were forced to pay this higher interest rate. Again, my office has helped her to meet the ever-increasing challenge of today's economy with that student debt that now, overall, is the highest of any debts faced by our people as a whole, more than $1 trillion.

Senators REID and HARKIN want to come to a solution that will keep the burden off the backs of students without adding to our national debt. It is not a tax increase that they propose, it is simply a solution that clarifies tax rules that are already in existence by closing a loophole. It is known as the Gingrich-Edwards loophole. I wish it were not known by that name. But it lets lawyers, consultants and highly paid professionals dodge payroll taxes and push that burden off on the middle class.

Getting rid of this loophole is another step toward an America where everybody pays their fair share and everybody plays by the same rules. It is the America that we grew up believing in. It is the America that we continue to believe in. Some have claimed that it is an America we have lost. I don't believe it. We can prove it by closing this loophole.

The provision proposed by Senate Democrats to close this loophole is narrowly tailored to affect only wealthy individuals, those making over $200,000 for an individual or $250,000 for joint filers. They are trying to shield their salaries from taxes, calling themselves small businesses. It will not affect the actual small businesses of this country, and it will not raise taxes for anybody who already pays what they owe in payroll taxes.

This loophole should be closed independent of the student loan crisis. We ought to close this loophole regardless of the challenge we face now in keeping the interest rate at 3.4 percent.

Very simply, we are being asked to make a false choice--the choice between accessible education and improved public health. It is not a choice we have to make. Our long-term economy and, as a result, the Federal budget will both benefit if both of these goals are served and preserved.

There is an old saying that an ounce of prevention is worth a pound of cure, and that is supremely epitomized by this situation. Last year an analysis in Health Affairs found that for each 10 percent increase in local public health spending, the rate of infant deaths and death from diabetes, heart disease, and cancer dropped significantly. Preventing these deaths and the costly treatment that precedes them could save the Federal Government large amounts of money and improve the quality of life for countless Americans.

I urge my colleagues to come together and recognize that preventive health care is essential not only to the future of this generation that will take advantage of the 3.4-percent interest rate for their Stafford loans but other generations as well, generations whose they will be and generations who are their parents.

This program is essential. The 3.4-percent interest rate should not be a partisan issue, and we should be closing this loophole regardless of the Stafford loan issue. But one way or the other, we should pay for it by closing the loophole and making sure students have an affordable interest rate for these Stafford loans.

I yield the floor.

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