GOP says student debt relief bill includes tax hike - WLOX.com - The News for South Mississippi

GOP says student debt relief bill includes tax hike

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Sen. John Thune says student debt relief bill contains a tax hike but Democrats say holders of debt need help. (Source: CBS) Sen. John Thune says student debt relief bill contains a tax hike but Democrats say holders of debt need help. (Source: CBS)

WASHINGTON, DC (CBS) - The Obama administration is urging Congress to pass a bill that would refinance student loan debt at lower rates and cap monthly loan payments at 10 percent of their income.

But Republicans say the measure is a "political gimmick" and wouldn't do more to help create jobs for recent college grads.

Sen. John Thune, R-SD, said on Tuesday that the bill would in fact do the opposite and make it harder for college graduates to get jobs.

"College graduates what they - they don't need political gimmicks. They need jobs when they get out. And this bill would exactly have the exact opposite effect because it includes a $72 billion tax increase which would make it harder to create jobs and harder for those college graduates to get the jobs that they need," Thune said.

Thune called the legislation an "election year bill," but Senate Majority Leader Harry Reid, D-NV, said final passage is needed for the bill.

"The status quo is not working. Those who stand for the status quo are standing for us going backwards, because that's basically what it will cost. Too many young people are seeing their dreams squashed," Reid said.

Reid said 44 million people have student loan debt in the U.S. and he applauded President Barack Obama for taking action to help 5 million of those people struggling with student debt. "There's a lot more we have to help, but that's a step in the right direction," Reid said.

Thune said the bill would slow job creation.

"Does it do anything to create jobs for those graduates when they get through with their college education? No," he said. "I mean this is a bill that purely and simply is an election year bill that allows them to check a box."

Copyright 2014 CBS. All rights reserved.

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