WASHINGTON, D.C. -- A crowd of young progressives in Washington rallied for Sen. Elizabeth Warren (D-Mass.) Wednesday as she targeted her message for lowering student loan rates with a heavy dose of populism.
Democratic U.S. Sen. Elizabeth Warren, of Massachusetts speaks to a group of supporters at a rally in support of Kentucky democratic candidate Alison Lundergan Grimes, Sunday, June 29, 2014 at the University of Louisville in Louisville, Ky. Warren has been canvassing the country following a failed vote in the U.S. Senate that would have allowed some people to refinance their student loan debt to take advantage of lower interest rates. (AP Photo/Timothy D. Easley)
“This one really does boil down to three words: billionaires or students. Which way is this country going?” Warren said to a standing ovation at the Make Progress Conference, sponsored by the liberal think tank Center for American Progress and its Generation Progress initiative.
Warren was among the supporters of a bill to cap the interest on federal student loans to 3.86 percent and make up for the loss by eliminating tax loopholes on high earners. The bill died from a Senate filibuster last month.
In discussing the student loans, she said under the current high interest rate, the federal government is making a big profit.
“The little hook is that when you pay it back, you will pay back not only the principal you borrowed that you used to pay tuition and buy your books. You would also pay back the cost of the funds. OK, I get that, the administrative cost of managing this program,” she said. “And then you'll pay enough to produce tens of billions of dollars in profits on the student loan program, profits that will just be used to fund the government in general.”
Warren said that current federal loan rates are between six percent and 12 percent, which prevents people from buying a new house or car and ultimately drags down the economy.
“At 3.86 percent, the U.S. government would still make a profit, but not as big a profit, a much smaller profit. But they would still be making a profit,” Warren said.
“The problem is, because the student loans are on target to make a huge profit, those profits are baked into future budgets of the United States government,” she continued. “Between 2007 and 2012 is on target now to produce $66 billion in profits for the United States government. So what that means is if you lower that interest rate, you've got to find some place to make up the hole that creates in the budget.”
Profit is a term rarely used when describing government revenue.
The solution, she said, was getting more tax revenue from the wealthy – which she didn't refer to as profit.
“We're going to stitch up the loopholes in the tax code that can only be used by those who make more than $1 million per year in adjusted gross income,” she said. “In other words, we're going to say that millionaires and billionaires should pay the same tax rate as regular families.”
Though the proposal is currently dead, Warren advised the young crowd push lawmakers to bring it up again.
“Ask them why they think they work for billionaires instead of young people trying to build a future,” Warren said.
Warren is viewed as a potential Democratic presidential candidate in 2016, as some on the left wing of the Democratic party are still suspicious of the liberal credentials of former Secretary of State Hillary Clinton, who is decidedly the frontrunner.
Warren, elected in 2012, is a favorite of the left for shaping the Dodd-Frank financial legislation. Her supporters made news Tuesday for launching a Ready for Warren website to promote her candidacy. However, Warren has said she's not interested in running, but has traveled the country to campaign for and raise money for Democratic candidates for the 2014 midterm campaign – steps usually taken by a presidential candidate.
Though Warren is getting a lot of media buzz, even conference attendees who say they would support her doubt she'll run, including Bonnie Pajic of Pembroke, Massachusetts, who volunteered for Warren's 2012 Senate campaign.
“She has already said she wouldn't,” Pajic told TheBlaze. “It would be suicide for her and would be suicide for the Democratic party. It would be a waste of fundraising and detract from her own Senate reelection campaign. She can have a strong identity in the Senate.”
Devon Brown, of Salt Lake City, Utah, said he would vote for Warren against Clinton, but he doesn't anticipate a Warren candidacy.
“I would vote for her in the primary just to make a statement,” Brown told TheBlaze. “But Hillary has a much better chance of winning, which is what really matters because of the Supreme Court"
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