Published May 07, 2012
Three years ago, President Obama ran a campaign based on the promise of “hope and change,” but for millions of Americans – from the middle class to recent college graduates – President Obama’s policies have not brought the kind of change they were promised. The policies the president has implemented since his inauguration have weakened our economy and reduced opportunity. Even worse, his original bad policies are now begetting more bad policies, as is evident in the debate over student loan interest rates.
Unless Congress takes action, college students are facing an imminent doubling of the interest rate on their new government-subsidized Stafford loans.
Given the tough economy graduates are facing, Republicans and Democrats as well as the president have made it clear that extending the lower interest rate is a priority. What Democrats and the president have failed to mention, however, is that their decision to take billions from student aid two years ago is making it harder to extend the lower rate now.
In 2010, Democrats and the president knew very well that the interest rate was scheduled to increase two years later and that the hike would need to be prevented, given the struggling economy.
Instead of extending the reduced student loan rate, however, the president and congressional Democrats took $9 billion from student aid and used it to pay for parts of ObamaCare.
Rather than taking an honest look at our financial situation and admitting that we could not afford a massive new entitlement program, Democrats and the president relied on budget gimmicks, tax increases, and cuts to programs like Medicare and student aid to “pay” for ObamaCare.
Now Democrats want to compound the problem by once again raising taxes and raiding Medicare to pay for keeping student loan rates at current levels.
What Democrats have not mentioned is what they will do when their Medicare raids hasten the program’s descent into bankruptcy. Funding ObamaCare with unrelated program cuts was a choice by Democrats to kick the can down the road, to get the new federal health program they wanted without dealing with how to pay for it on a long-term basis.
Now they’re trying to do exactly the same thing with student loans: take care of their current priority – a short-term student loan interest rate extension – while creating an unsustainable fiscal situation down the road with permanent tax increases and less potential revenue for Medicare.
Unfortunately, this approach is all too common for Democrats and the president.
The president’s strategy – spend now, worry about paying later – has driven up the deficit by a staggering 47 percent in just three years, to a breathtaking $15.6 trillion. His proposed budget for 2013 would add another $11 trillion and would decrease our economic growth by up to 2.2 percent over the next 10 years.
According to projections used by President Obama’s former top economic adviser, a decrease in economic growth of this magnitude would result in up to 2.2 million fewer jobs.
Given the current state of the economy, it is almost inconceivable that the president has proposed a budget that would bring about further job loss. This year’s crop of college graduates looking for jobs are confronting an economy in which unemployment has remained above 8 percent for 38 straight months. A recent report highlighted the fact that one out of every two recent college graduates is unemployed or underemployed.
Those graduates lucky enough to find employment are more likely to find jobs as waitresses, waiters, and bartenders than as engineers, physicists, chemists, and mathematicians. With limited job opportunities like this, it’s no wonder that graduates fortunate enough to actually find a job will earn 9 percent less than if they had graduated just a few years ago. Plus, when they retire, today’s college graduates can expect to receive less Social Security than their parents.
And it’s not just young Americans who are struggling in this economy. President Obama’s policies have also made things worse for the middle class.
Under President Obama, the cost-of-living for the middle class has soared: worker health insurance costs have shot up 23 percent, college tuition has increased 25 percent, gas prices have doubled, and home values are down 14 percent.
Women in particular are struggling. The poverty rate for women has reached a 17-year high, and there are nearly 700,000 fewer women working today than when President Obama took office.
Faced with these numbers, the president should be doing everything he can to get government out of the way of our economic recovery – not pushing more government spending that will only decrease our prosperity and discourage job creation. And the president’s tax-and-spend policies don’t just mean less prosperity today – they also threaten America’s future.
The explosion of spending that has taken place under President Obama is a threat to our national security. Our ability to protect our nation is dependent on a healthy economy. A national debt of $15.6 trillion – set to increase further, if the president has his way – is not the way to achieve a healthy economy.
When converted into policies, slick campaign slogans have real-life consequences that impact individuals, families, and small businesses, all of whom are struggling in the Obama economy.
President Obama’s policies have diminished our prosperity, reduced our freedom, and mortgaged our future – he’s made things worse.
Senator John Thune (R-S.D.) serves as the Chairman of the Senate Republican Conference.