(WASHINGTON) — Is progress being made in the student loan impasse? Perhaps a little.
Late Thursday Senate Majority Leader Harry Reid, D-Nev., counter-offered two proposals of his own to pay for the one-year extension of student loans rates to prevent them from doubling on July 1.
And in a sign of tiny steps of progress, the letter was initially well-received by Republican leadership.
Reid proposes a combination of two ideas to pay for the extension, changing and allowing more flexibility to employers pension insurance premiums, which would garner about $9.5 billion, and changing contributions to Pension Benefit Guarantee Corporation premiums, which would raise about $8 billion.
“The combination of these two proposals will provide sufficient resources to fund both a one-year extension of the current student loan interest rate and reauthorization of the nation’s surface transportation programs,” Reid writes in a letter sent to House Republican leaders Thursday. “My preference would be to use the funds raised by these two proposals to pay for both measures, and pass them immediately — since, as you know, both are critical to the economic security of middle class families, and both must be addressed before the end of June.”
Republican aides say they are still waiting for a response from the White House on their own proposals, sent last week, but received Reid’s proposals Thursday positively, indicating that they believe they “may be making progress.”
“We are encouraged to see the majority leader drop his insistence on taxing job creators,” Don Stewart, a spokesman for Senate Minority Leader Mitch McConnell, said Thursday. “We will review these new proposals and hope that they will finally review the bipartisan proposals we sent a week ago. But bottom line, now that Democrats are willing to take this issue seriously, and not just use students as props, we may be making progress.”
Both Republicans and Democrats believe the subsidized Stafford loan rates should not be doubled this July from the current 3.4 percent to 6.8 percent and agree the current rates should be extended for at least another year. But both sides thus far have not agreed on how to pay for the $6 billion bill.
Copyright 2012 ABC News Radio
Heather Kelly, CNN Newswire
Faith Karimi, CNN Newswire