Republicans Accuse Dems of 'Runaway Entitlement Spending'

July 7, 2008 - 8:32 PM

(CNSNews.com) - House Democrats passed a bill on Wednesday intended to help more students pay for college. But Republicans said the bill will force taxpayers to foot the bill for "nine costly new entitlement programs," and they said the bill doesn't help enough low-income students.

"The College Cost Reduction Act of 2007 will provide the single largest investment in higher education since the GI bill," House Democrats said. "And it will do so at no new cost to taxpayers," they insisted.

The money for the bill will come from savings elsewhere: Federal subsidies to banks that issue government-backed student loans will be scaled back by $19 billion, and $1 billion of that will go to deficit reduction. That frees up $18 billion to spend, the way Democrats see it, and here's how they plan to do it:

The bill, which passed 273 to 149, would boost the maximum Pell grant to $5,200 by 2011 and it would halve the interest rate on federally subsidized loans for low- and middle-income students.

"Cutting interest rates in half will make it possible for more Americans to achieve their economic potential. And this is especially important for strengthening the middle class," said House Speaker Nancy Pelosi (D-Calif.).

"By increasing the maximum Pell Grant scholarship by $500, nearly 6 million students will be given help to afford the expanding cost of college," she said.

Undergraduates who commit to teaching in public schools in poor neighborhoods would get "upfront tuition assistance."

And college graduates would benefit as well.

The bill would provide loan forgiveness for first responders, law enforcement officers, firefighters, nurses, public defenders, prosecutors, early childhood educators, librarians and others.

It would also allow "public servants" to have their loans forgiven after 10 years. (House Republican Leader John Boehner complained that the bill would use taxpayer dollars to erase the student loan debts of Members of Congress and lobbyists.)

'Six weeks in Iraq'

"The cost of this bill is the equivalent of six weeks in Iraq," Pelosi said. "Six weeks in Iraq. Imagine that. For six weeks in Iraq, we can expand higher education to all who wish to achieve it in America. That investment has a return to our Treasury, to grow our economy, to prepare us for the future," she said.

Pelosi emphasized that the legislation does not include any new deficit spending.

But Republicans complained that the bill takes billions of dollars in savings within higher education programs and spends most of that money on new entitlement programs; benefits for those who already graduated from college; and new programs aimed at institutions, not students.

"Instead of helping low-income students, their proposal targets less than one third of the savings toward the Pell Grant program," Rep. Boehner said.

"Before Congress saddles American families with the vast new sums in entitlement spending, it's worth noting that federal spending is already out of control - and it is driven by massive entitlement programs like Social Security and Medicare."

Boehner questioned Democrats for wanting even more entitlement programs.

House Republican Whip Roy Blunt (Mo.) also warned that "runaway entitlement spending, which already consumes two-thirds of the federal budget, continues to push our economy closer to a point of no return.

"But instead of working with Republicans to rein in this monster now...Democrats today created nine new and separate entitlement accounts, adding billions to an already inconceivable, and largely unpayable, bill."

Blunt said the lion's share of the spending will go to students who already hold a college degree -- not to low- and middle-income students looking to earn one.

One interest group warned the bill would cost many students and parents thousands of dollars more in interest on federal student loans by eliminating lender competition and choice.

"I am encouraged that the President has indicated he will veto this irresponsible bill if it reaches his desk, and I believe House Republicans will supply more than enough votes to sustain the President's veto when it comes, Boehner said.

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