Brendan Nyhan

Democrats using sunsets on student loan bill

NPR reports that Democrats are already abusing phony sunset provisions to game Congressional budget rules, a tactic that Republicans repeatedly abused over the last six years:

For the past few years, Democrats in Congress have not had much power in the minority. In that time, Republicans have used a budgeting technique called a “sunset” — which can often make a new initiative look like it costs less than it does.

Today the two parties swapped roles. Republicans are too weak to swim against the tide of bills that Democrats are bringing to the floor under what’s called closed rules. That means that Republicans can’t even offer amendments to the bill.

The Democrats’ bill would reduce interest rates on college loans for low- and middle-income students, by stepping them down slowly, from the current 6.8 percent to 3.4 percent in five years. And then, six months after loans hit the lowest rate, the whole bill sunsets, and rates go back to 6.8 percent.

No one thinks that’s actually going to happen — but on the other hand it will require Congress to do something prevent it from happening. The sunset serves to make the bill look cheaper over the long haul — a tactic Republicans used many times on big tax cuts.

There is a key difference, though: Democrats have eliminated subsidies for private banks and others to pay for the student loan rate drop, so it will not add to the federal deficit.

Sunsets are a cheap way to build a constituency for a policy and then make it politically painful to cut later. And while this student loan bill seems like a good idea, the hypocrisy of the Democrats will make it even harder to condemn these tactics when Republicans use them on tax cuts.