Alaska Representative Don Young voted to increase interest rates for federal student loans last Wednesday, as part of a bill that will cut $39.5 billion from the federal budget. The vote on the bill (HR 653) came just days after President Bush, in his State of the Union speech, endorsed a spending cut on "entitlement" programs. Other programs that face cuts include Medicaid, child support, public assistance and Medicare.

The effect on future borrowers of PLUS loans, should Bush sign the bill, will be an increase of rates from the current 6.1 percent to 8.5 percent as of July 1, 2006.

"The university opposed it in very strong terms, and tried to convince our delegation to oppose it as well," said University of Alaska Public Affairs Director Kate Ripley. "Unfortunately, the issue was included in a larger budget bill with many other provisions that, apparently, members of congress felt they had to support. We are very disappointed with this, as are many other education advocates."

The votes on the budget cuts fell mostly along party lines, with no Democrats voting for the bill and 13 Republicans voting against it. The final tally was 216-214. The New York Times reported that the Republican "moderates" who voted against the bill were "released" by the party to do so (after the votes for the bill's passage had been secured) because of fear that the unpopular effects of the bill would hurt their chances in the mid-term elections.

A recent report by the Congressional Budget Office estimated that 13 million poor Medicaid recipients would be impacted by the cuts, and that 65,000 Medicaid enrollees would lose their insurance. The report also stated that the legislation would increase the profits of private Medicare insurers by $22 billion over 10 years.

Critics of the budget cuts have asked why, if the government is being forced to cut spending, there is simultaneous legislation to extend tax cuts that have cost the government over $800 billion in the past five years.

Alaska Senators Lisa Murkowsi and Ted Stevens voted last Thursday to extend tax cuts until 2010. (H.R. 4297) The votes would appear to be another victory for President Bush, who pushed for further tax cuts in his State of the Union speech.