Congresswoman Tammy Baldwin's (D-WI) budget amendment that would have instituted the "Buffett Rule" and prevented a sharp increase in a student loan interest rate was blocked today in the House by the Republican-controlled Rules Committee.
Unless Congress acts, the federally-subsidized Stafford Loan interest rate will double from 3.4 to 6.8 percent on July 1, 2012. The Republican budget proposal, authored by Wisconsin Congressman Paul Ryan, would allow this increase to take effect. Baldwin's amendment to the budget proposal would prevent the scheduled increase in the Stafford Loan interest rate for Fiscal Years 2013 through 2022. It would offset the cost by implementing the "Buffett Rule" to require millionaires and billionaires to pay their fair share in taxes. The amendment is fully paid for and would reduce the deficit by an additional $10 billion dollars over ten years.
"Budgets reflect our nation's priorities and values," said Congresswoman Baldwin. "The Ryan budget provides tax breaks for the very wealthiest while imposing an additional burden on those who can afford it the least - recent college graduates entering a difficult job market. My amendment will fix this gross inequity and reflects the values and priorities of middle class Wisconsin families," she said.
Student loan debt now averages $25,000 per student and 8 million students would be affected by this increase. In addition, total student loan debt recently surpassed total credit card debt for the first time in American history.
In her testimony to the committee, Baldwin said "Not everyone in our nation is struggling, however. In recent years, income for the wealthiest one percent of Americans has skyrocketed. Yet, under our current tax code a quarter of all millionaires pay lower tax rates than millions of middle-class households. The most famous example of this is billionaire Warren Buffett paying a lower tax rate than his secretary. As President Obama has stated, this isn't class warfare. This is common sense. It is about shared responsibility."