By Lauren Smith, CQ Staff

Initial Republican resistance succumbed to aggressive presidential lobbying Wednesday, as all sides agreed that Congress should act to prevent student loan interest rates from doubling in July. Yet they proposed predictably different ways of paying for the legislative fix.

At a hastily called news conference, Speaker John A. Boehner, R-Ohio, said the House will consider a bill (HR 4628) Friday to postpone the student loan interest-rate increase for one year, paid for from what he called a “slush fund” in President Obama’s health care law that covers prevention and public health. Senate Republicans also backed that approach Wednesday.

Senate Minority Leader Mitch McConnell, R-Ky., was highly critical of legislation (S 2343) introduced earlier this week by Senate Majority Leader Harry Reid, D-Nev., that would instead pay for the one-year student loan remedy by ending a corporate tax break.

“Let’s be honest,” McConnell said. “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.”

House Democrats, for their part, proposed a different offset: They introduced a bill Wednesday that would pay for the one-year extension of the current student loan interest rate by ending tax subsidies to oil and gas companies.

Earlier, congressional Republicans appeared resistant to extending the interest rate break, which they contend was never meant to be permanent. Then came Obama’s big public relations push in his weekly radio address over the weekend and his tour of several colleges this week. And on April 23, Republican presidential candidate Mitt Romney urged lawmakers to back the Obama administration’s request for an extension.

Even so, Boehner on Wednesday criticized the Democratic-controlled 110th Congress for passing the 2007 legislation (PL 110-84) that temporarily reduced the interest rate on subsidized Stafford loans to undergraduate students from 6.8 percent to 3.4 percent for four academic years.

“It’s a problem that has needed to be addressed,” Boehner said.

Ways to Save

The Congressional Budget Office estimates it would cost $6 billion to extend the current 3.4 percent student loan interest rate for one year.

The House Republican bill, introduced Wednesday by Judy Biggert of Illinois, as well as a draft Senate companion measure by Lamar Alexander of Tennessee, would repeal a fund in the health care law (PL 111-148, PL 111-152) that covers prevention and public health. Republicans say that would save $12 billion, with the remaining savings going to deficit reduction.

“The main reason why tuition is going up and loans are going up is President Obama and his health care policy,” Alexander said. “Federal health care mandates on states are soaking up the money that states would otherwise spend on colleges and universities.”

Sen. Tom Harkin, D-Iowa, chairman of the Health, Education, Labor and Pensions Committee, called that GOP offset “a tired, old attack” on the health care law.