(Bloomberg News) The Republican-led House passed legislation to prevent the U.S. student-loan interest rate from doubling on July 1, defying President Barack Obama's threat to veto the measure because it would raid a health-prevention fund to finance the subsidy.
The bill to extend the subsidy for one year passed on a 215-195 vote. The House vote sets up a confrontation with Obama and the Democratic-controlled Senate, where Majority Leader Harry Reid has proposed covering the cost of the $5.9 billion measure by raising taxes for some high earners.
The measure passed with the votes of 202 Republicans and 13 Democrats. Thirty Republicans and 165 Democrats voted against the legislation.
The Obama administration said the president's advisers would recommend that he veto the House bill because it would eliminate a public-health fund to pay for the interest rate freeze. In a statement of administration policy, the White House called the proposal "politically motivated."
Unless Congress acts by July 1, the interest rate students are charged for Stafford higher-education loans would rise from 3.4 percent to 6.8 percent. House Speaker John Boehner of Ohio rushed the bill to the floor this week as Obama completed a tour of college campuses in three swing states and pressed Congress to act.
"President Obama took the issue to the people" and made it "too hot for the Republicans to handle," House Democratic Leader Nancy Pelosi told reporters before the vote. The interest rate for college loans "makes a very big difference around the kitchen tables of America's families," Pelosi said.
Democrats accused Republicans of what Pelosi called "an assault on women's health" by proposing to use money from the prevention and public health fund to finance the student loan- interest subsidy. The rest of the $11.9 billion in the fund would be used for deficit reduction.
The fund finances breast and cervical cancer screenings, child immunizations and prenatal tests for birth defects.
Boehner derided the program created by the 2010 health-care overhaul law as a "slush fund" that is immune from congressional oversight.
On the House floor before the vote, he said there is precedent for using the money, and that earlier this year Democrats supported taking $4 billion from the health-prevention fund to finance extension of the payroll-tax cut.