Just in time for the mid-term elections, US Senator Elizabeth Warren (D-Mass) is resurrecting her student loan bill defeated by the Senate in June. Although the vote failed on a party line basis, with Senate Majority Leader Harry Reid (D-Nev) voting against it, the original bill would only have saved the average borrower about $3,000 over the length of their loan.
"We will be voting on it again in September," Senator Warren told Rolling Stone magazine in an interview.
"Forty million people are dealing with $1.2 trillion in outstanding student debt. It's stopping young people from buying homes, from buying cars and from starting small businesses. We need to take action."
The costs of going to college have risen by 500% over the last three decades. During that same period, typical family incomes have only risen by 150%. Warren’s bill does nothing to address the disparity of inflation or look into ways to bring educational costs down; it just transfers the payments of modest individual fees from college students to millionaires.
Currently, the federal government profits by about $66 billion from interest payments on student loans. Instead of reducing the budget by that amount, the bill would raise the revenues from a different source. One that can be counted on to increase political tensions at election time.
In contrast to that amount, in 2008, the federal government subsidized higher education by approximately $30 billion dollars, according to the CATO institute. The majority of this money goes toward student aid.
Warren’s bill would have imposed a tax on millionaires, the ‘Buffett Rule,’ to replace the money that the federal government would lose. The Buffet Rule, which would impose a minimum of 30% income tax on anyone earning between $1 million and $2 million, has been appearing more frequently since it was first proposed in 2011, and it has been defeated by a near party-line vote each time.
Republicans in both the House and Senate have opposed the Buffett Rule, calling it ‘class warfare’ and saying it will stifle an already struggling economy. Raising this issue now will give Democrats a popular talking point during the coming election.
"As a country, we can either invest in tax loopholes for billionaires or lower-cost student loans for young people who are trying to build a future," Warren said during the interview. "Billionaires or students: It's a pretty stark choice."
Desperate to distract voters from the continuing problems with the economy, jobs, health care and the ongoing disasters with our foreign policy; Senate democrats are looking for an issue that will resonate with voters and keep the republicans from taking over the Senate. Whether they get enough votes to pass the bill, they can return to their constituents and say they tried to help them.
As Senate Minority Leader Mitch McConnell (R-Ky) said about the bill in June, "They want an issue to campaign on. [An issue] to save their own hides in November.”