Speaker John Boehner says the House will vote Friday on a Republican bill preventing interest rates on federal student loans from doubling this summer. But the legislation will be paid for by cutting money from President Barack Obama's health care overhaul law.
With both parties competing for election-year support from students, Obama has been pressuring Congress to pass legislation keeping the current 3.4 percent interest rates on subsidized Stafford loans from doubling on July 1.
Senate Democrats have introduced a bill that would do so, and would cover the $5.9 billion price tag by raising payroll taxes on the upscale owners of some privately owned corporations.
Boehner is trying to turn the tables on Democrats by scheduling Friday's vote, but paying for the measure in a way Republicans prefer.
Earlier Wednesday, Senate Minority Leader Mitch McConnell, R-Ky., accused Obama of playing politics with his push to prevent interest rates on federal student loans from increasing in an election-year effort to embarrass Republicans.
McConnell aimed his remarks at Obama as the president spent a second day addressing college campus audiences about the need to keep the Stafford loan interest rates at 3.4 percent.
Obama, speaking to a crowd of students Wednesday at the University of Iowa, said some Senate Republicans appeared ready to support an extension of federal student loan rates. But he said House Republicans were indicating that they would only extend the rate by cutting other student aid.
"They've hinted that the only way they'd do it is if they cut things like aid for low income students," he said. "Think about that. We're going to help some students by messing with other students. That's not a good answer."
Without mentioning him by name, Obama also took a swipe at Rep. Todd Akin, R-Mo., a GOP Senate candidate who said the government shouldn't be involved in the student loan market and compared it to a "stage 3 cancer of socialism." Obama said, "I don't know where to start. What do you mean? What are you talking about?
"Just when you think you've heard it all in Washington, somebody comes up with a new way to go off the deep end."
The maneuvering highlighted the rivalry between the two parties over appealing to college voters, who leaned heavily toward Obama during his 2008 run for the White House. They are also competing to address the broader financial pressures facing Americans in an economy still struggling to regain strength.
The president supports a bill introduced late Tuesday by Senate Majority Leader Harry Reid, D-Nev., that would keep the rate at 3.4 percent for another year, helping 7.4 million students. The $5.9 billion measure would be paid for by boosting payroll taxes on the owners of some privately held corporations, which Republicans oppose.
"Let's be honest," McConnell said Wednesday. "The only reason Democrats have proposed this particular solution to the problem is to get Republicans to oppose it, to make us cast a vote they think will make us look bad to the voters they need to win the next election."
McConnell said Republicans oppose letting student loan interest rates double, but said the payroll tax proposal would make it harder for businesses to hire workers. He said the two sides' differences could be resolved if Obama would negotiate and "choose results over rallies."
Not willing to cede any ground, Obama's likely GOP rival, Mitt Romney, has also asked Congress to temporarily extend the lower rates. Congressional Republicans say they, too, support keeping students' interest rates low.
That apparent agreement on the overall goal is not stopping either side from seeking political advantage.
"Republicans in Congress have voted against new ways to make college more affordable for middle-class families, even while they're voting for huge tax cuts for millionaires and billionaires," Obama told college reporters Tuesday by telephone as he flew aboard Air Force One from North Carolina to Colorado, where he addressed university audiences on the subject.
Republicans trained their fire on Democrats' plan to finance the bill by making it harder for owners of smaller, privately owned companies called S corporations to avoid paying Social Security and Medicare payroll taxes on some of their income.
The proposal would apply to such companies with incomes exceeding $250,000 and whose revenues come mostly from the work of three or fewer owners. The higher payroll taxes would also be required for some law firms, doctors' practices and other professional services partnerships.
"The proposal they're talking about is a dream world," Rep. Rob Bishop, R-Utah, said of the payroll taxes.
Senate Democratic aides said their bill would pay for itself with around $6 billion in extra Medicare taxes that would be collected over the next decade from the private companies.
That money would normally go to a Medicare trust fund for financing the hospital care the program provides its elderly recipients. Democrats said their payroll tax language would also raise $3 billion in new Social Security revenue, but that money would go to Social Security's trust fund and not be used to pay for the student loan legislation.
The episode was also testing congressional Republicans' willingness to stand with Romney on issues.
Sen. Pat Toomey, R-Pa., a tea party-supported freshman, would not commit to supporting the overall bill, saying he wanted to study it.
Asked if Romney's endorsement of keeping interest rates low would sway him, Toomey said: "I'm aware of that. We all make our own decisions."
The Obama administration says a doubling of interest rates would cost the average student more than $1,000 over the life of the loan.