Citing an irresponsible tax increase on small businesses that would stifle job growth, U.S. Sen. Jim Inhofe (R-Okla.), a leading fiscal conservative in the Senate, today voted against the motion to proceed to S. 2343, the Democrats' proposal to extend the 3.4 percent interest rate for federally subsidized student loans by off-setting the cost with raising payroll taxes on employers. Instead, Inhofe is a co-sponsor of S. 2366, the Interest Rate Reduction Act, which would extend the current interest rates at 3.4 percent for one year, off-setting the cost by repealing the Prevention and Public Health Fund -- a slush fund created by Obamacare. The motion to proceed, a procedural vote, failed 52-45-1.
"This is an election year "crisis' created by the Democrats themselves," said Inhofe. "Now they want to penalize job creators in order to pay for lower interest rates on student loans, and that will only make the jobs prospects worse for graduates. If college graduates can't find jobs in the Obama economy, it doesn't matter what the interest rate of loans is -- they won't be able to pay for it. President Obama has failed to keep his promises as unemployment remains above 8 percent and college graduates are struggling to find jobs. It is appalling that in the United States, 53.6 percent of college graduates under the age of 25 are either unemployed or underemployed. It is not surprising then that Obama has lost so much of the youth vote he had in 2008. It is because of that lost support that Democrats are trying to make this an election-year issue. Instead of increasing taxes on small businesses to pay for this, we should keep the lower rates by doing away with the Obamacare slush fund."
In 2007, Democrats pushed for a five-year student loan interest rate reduction to 3.4 percent as a temporary subsidy in order to help make the loans more affordable. Interest rates are set to increase back to 6.8 percent on July 1, 2012.