–Senate Majority Leader: Sequestration Was Part of Debt Hike Deal
–Sen. Reid: Hammers GOP For Blocking Student Loan, Ex-Im Bank Renewal

By John Shaw

WASHINGTON (MNI) – Senate Majority Leader Harry Reid said Thursday
the across-the-board spending cuts mandated by last year’s debt ceiling
agreement should go forward unless Republicans are willing to use new
revenues to replace part of the coming spending cuts.

At a briefing on the legislative agenda, Reid said the move by
House Republicans to replace the across-the board-spending cuts that are
mandated by the failure of the Super Committee last fall violates last
year’s debt ceiling agreement.

He said he is “not about to walk away” from the sequestration
process unless the GOP is willing to take a balanced approach to
replacement legislation.

Reid later called the sequestration process as a difficult but
balanced approach.

The House is now considering a GOP plan that would use more than
$300 billion in 10-year spending savings to replace the approximately
$100 billion in across-the-board spending cuts for the 2013 fiscal year
that were mandated by the failure of the Super Committee last fall.

Over nine years, about $1.2 trillion in across-the-board cuts are
mandated by the sequestration process.

In other matters, Reid blasted Senate Republicans for blocking
legislation to prevent an interest rate increase in some student loans
and also stalling action on a reauthorization of the Export-Import Bank.

“We can’t get on the bill. They won’t let us get on the bill,” he
said of the student loan bill.

The Senate remains deadlocked over how to pay for a $6 billion bill
that would prevent a scheduled increase in some student loan interest
rates from going forward.

Congress passed a bill in 2007 that was signed by President George
W. Bush to temporarily reduce the interest rate on subsidized Stafford
loans to college undergraduates from 6.8% to 3.4%. That interest rate
decrease is set to expire July 1. Extending the interest rate reduction
would cost $6 billion for one year.

President Barack Obama has called for legislation extending the
interest rate reduction to 3.4%.

House Republicans passed legislation several weeks ago that extends
the student loan interest rate reduction for another year and pays the
$6 billion cost by tapping funds from prevention and public health
programs that were established by the 2010 health care law.

Reid has said extending the student loan interest rate reduction is
important to seven million students and should be paid for by ending a
tax break for S corporations which he said would “close a long, long
overdue tax loophole.”

The Senate held a procedural vote Tuesday to formally begin debate
on the student loan interest rate bill. The motion to take up the
legislation required 60 votes, but it only secured 52 votes. No
Republican supported the motion.

Sen. Chuck Schumer, who also spoke at the briefing, said he is
“worried” that Senate Republicans are willing to block the Export-Import
Bank renewal.

He added that he sees no “sense of urgency” by the Senate GOP on
reauthorizing the Export-Import Bank. The House passed its Export-Import
Bank reauthorization Wednesday on a sweeping, 330 to 93 vote.

** MNI Washington Bureau: (202) 371-2121 **

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