–Senate Majority Leader: Must Have New Revenues To Fix Sequestration
–Open To ‘Good Faith’ Talks On Student Loan Bill

By John Shaw

WASHINGTON (MNI) – Senate Majority Leader Harry Reid repeated
Tuesday that he’s open to adjusting the sequestration process created in
last year’s debt ceiling agreement, but only if that overhaul includes
new revenues.

In comments to reporters after a Senate Democratic luncheon, Reid
said the sequestration process is painful and he’s open to make changes
to it — provided that the accord does “something about revenues.”

The House passed a GOP plan last month that would use more than
$300 billion in 10-year spending savings to replace the $110 billion
in across-the-board spending cuts for the 2013 fiscal year that are
required.

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

On another matter, Reid said he is willing to work with Republicans
“if they want to negotiate in good faith” on legislation that would
prevent a mandated increase in some student loan interest rates from
going forward.

Reid said he is skeptical about several alternatives floated by
Senate Republicans to pay for the bill since they were offered at the
same time that House Speaker John Boehner said that he was unwilling to
compromise further on the matter.

Congress passed legislation in 2007 that was signed by President
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 Obama has called for legislation extending the interest
rate of 3.4%.

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

Reid has said that extending the student loan interest rate
reduction is important to 7 million students and should be paid for by
ending a tax break for “S” corporations.

Talks between the House and Senate on the issue are likely to
intensify later this month, despite the assertions of Republican and
Democratic leaders that the other party must compromise.

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

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