There’s been a new development in the student loan interest rate fight between Democrats and Republicans. After Obama proposed extending the 3.4 percent student loan interest rate for a year (instead of letting in double, as the law specified), Republicans responded that the proposal was irresponsible. One congressman accused him of creating a policy that “simply kicks the can down the road and creates more uncertainty in the long run — which is what put us in this situation in the first place.”

And then Mitt Romney, the Republican presidential candidate, said he too was in favor of extending the low interest rate. So Congressional Republicans scrambled to find a way support the proposal. The solution they came up with was, interesting, in that it would both keep the interest rate low and undermine Obama’s health care initiative.

The Republican bill, according to a piece by Dan Geringer in The Daily News:

[House Speaker John] Boehner told reporters that Obama has been “trying to invent a fight where there wasn’t and never has been one” and said, “We can and will fix the problem without a bunch of campaign-style theatrics.”

House Republicans would pay for their one-year measure [keeping students loan interest rates at 3.4 percent] from a $17 billion prevention and public-health fund that Obama’s law created for immunization campaigns, research, screenings and wellness education. Republicans have dubbed it a “slush fund” and have sought to cut it to finance a variety of projects that they favor. There is $13.5 billion left in the fund for the coming decade, according to the administration.

Democrats will oppose it. According to an article by Alexander Bolton in The Hill:

“I’m very disappointed with what the House is contemplating doing tomorrow,” Senate Majority Leader Harry Reid (D-Nev.) said during a Thursday press conference.

“They would pay for it by stopping Americans from getting preventive healthcare. That doesn’t sound like a very good deal to me,” he said. “So we certainly don’t appreciate that. We oppose that. Our bill is about building a middle class and you can’t do that by taking the ability of people to get preventative healthcare,” he added.

Democrats plan to pay for their own one-year extension of the student loan rate by eliminating an existing tax break for S corporations. S corporations avoid corporate taxes by “passing corporate income, losses, deductions and credit through to their shareholders.” Shareholders of such companies currently pay taxes on company revenues as personal income.

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Daniel Luzer is the news editor at Governing Magazine and former web editor of the Washington Monthly. Find him on Twitter: @Daniel_Luzer