marco rubio. then, former florida governor jeb bush. >> this week on "newsmakers >> this week on "newsmakers" john kline, republican and chairman of the workforce committee. >> i am really glad to be here. >> we have two reporters. all johnson, the national journal congressional reporter. >> as you know, on july first if congress does not act stafford loans doubled from 3.4% to 6.8% for millions of student including those who are still paying them off. do you see a way with the house and the senate still not having figured out how to come together on this? do you see a way that doubling gets a verdict before july 1? >> when you say congress need to act, the house has acted. the house passed legislation to avert that doubling on july 1. it was solid registration in keeping with the president of united states, what he propose, to get away from politicians deciding what that interest rate should be, tie it to the markets.

use the 10-year treasury. we think it represents the doubling. it is a long-term solution. the house passed it. the senate needs to pass something. the senate try to bills. one was the senate republican bill which was to use the 10 year treasury as well. it's failed. the in the house democrats, mr. harkin, had a bill that would have kicked the can for three more years. using taxes to pay for it. i do not think that is the right solution. when arnie duncan was before the committee testifying, he was asked by republicans and democrats what he thought we ought to do. he ought use the market. one of my democrat colleagues said wouldn't it be better to just have a temporary two-year solution. he said no. he thought it was time for a permanent solution. now discussions are bubbling around. i spoke to senator alexander yesterday or the day before.

he is trying to continue discussions with the white house. what we need is presidential leadership to say "look, we have proposed long-term solutions, interest rates to the market, 10-year treasury, why don't we push the senate to pass some version of that and then we can hammer out the details?" >> if you can talk a little bit about the politics system. last year when this issue up in january and february e-mailing alexander and asking what you knew. if i remember right, you were not particularly interested in doing much. you did have some ideas but it was not until met romney came or word and said we cannot let this happen because of the economy that the entire issue kind of blew up. how can you find agreement when it is clear that there are political points to be had for keeping your own side? >> there are also political points to be had for having success here. i am surprised that the white house has not recognized how similar the proposals are in said "let's get this done and have a bipartisan issue and move it off the table." i am still hopeful we can do that. the senate has not been

successful in their 3.4% short- term solution of finding someone to pay for it. this is the direction we are continuing to work for. the senate republicans are very much committed to this approach. it should not be that difficult to do considering the white house on paper position he has a proposal. i mean there is still room. it is early june. >> according to the national journey, if they have objected to the bill because it is the "largest interest-rate increases on middle income students and families who struggle most to afford a college education." >> i find it interesting that the white house is taken that proposal when they also propose that we tie the interest rates to the market. and the same market interest. that work it can move up and down. we very carefully put in caps in case you get a market rate where the interest rates are rising very rapidly. i think when you say something like "this is going to be the largest rise." that says you are predicting what market is going to do. i argue they do not know.

>> the 10-year treasury is 2.2. under your plan, rates would go to 4.7%, under the president's plan it would go under it down a little bit to about 3.1% for this next lending year. what is your reason to increase rates right now on the subsidized stafford loans? >> by law they go to 6.8%. >> we have the current policy debate during the fiscal cliff. other current policy still would go up there. would it be a good idea to increase the rates? >> we are splitting hairs. the law says on july 1 they go to 6.8%. the law already has the non- subsidized stafford rates. we are bringing those down because we combined them. since most students who have the subsidized stafford loans also have the unsubsidized loans. they are bringing this down as well. we think the long-term solution, using the market, not having this kind of political debate every year or two is the right way to go. even those who are proposing doing this for two years recognize that we're going to have another political debate in two years or they will have to have a long-term solution. we put forward one that is good and solid. the president put one for that also ties to the market. the ingredients are there to be able to come together and i are out what ever the deficit might be.

>> do you have any sympathies for democrats, tom harkin of iowa? he was making comments last week that he was not that sure that the president idea in terms of tying interest rates to the market with all that helpful. that is a big change. i would like to take the time to fix for it in a broader context. any reason to understand that? >> this has been in front of us for a long time. as we discussed earlier, we started to have this discussion

last year. we were trying to move toward a long-term solution where we tie

the interest rates to the mark it. -- to the market. the decision was made to take the interest rates and keep it

for the subsidized stafford only a 3.4%. new the president nor his challenger is saying we ought to keep it at 3.4% make any suggestion about what was going to happen this july 1 to rate nor about how they were going to pay for it. it was over $6 billion. we have an obligation not just

to students and graduates but to taxpayers. we have to look at huge deficits we have been running and what the debt is. there needs to be a trade-off. the markets provide a much more accurate reflection of the value cost of capital than we do every

election year. >> do you see because the house plan is a market type situation, really we are looking at a difference between rate. there are some other things around the edges. do you see a window for compromise that you do not necessarily see with the senate and the credit extension?

>> the president has performed a long-term solution tied to the market. we have performed a long-term solution tied to the markets. the interest that you add to the 10-year treasury differs. the formulation differs a little bit. the president would like to have it very at -- vary at six each year. then you are allowed to consolidate and fix them. fixed is explored when she got it you do not have a chance to take it back to the market after you graduate. i think those are exactly the kinds of things that we ought to be having a debate about right now and the conference committee or face to face instant of the situation where the president proposes a long-term solution and then comes out in vilifies

our long-term solution and says he wants a short-term solution. after his secretary said he wants a long-term solution. it is an interesting conundrum that is out there. i still think be pieces are there. we could come together and have a long-term solution with interest rates determined by the market. >> can you talk about how it was but your proposal in the house and how it makes money for the treasury? that is something democrats have seized on as one of their problems. >> we are certainly influenced and to some extent controlled by what the congressional budget office says any legislative proposal costs. our effort was to maintain this legislation as close to budget neutral as we could get it.

that turned out to be fairly difficult. you have to look at one year, five-year, 10-year. we came up with a bill that keeps that line very flat. at the end of 10 years, according to the cbo, we save for the treasury $3.7 billion. the president's proposal saves $3.1 billion. in a 10 year projection that is the same. that is the argument we have been making. we think our bill is better. we like our approach better. we are perfectly willing to speak with the senate if they can pass some legislation. we will see if we can't work out a compromise. >> democrats said it could be resolved if you would change the language that says in the revenue would be going toward preserving pell grants. >> i don't know where you heard that. i do not think that is a true statement. if that is what they can, and let let the senate passed some

legislation to that effect and we will see if we can come to an agreement. >> this is for the accident of american progress. >> mr. miller? mr. harkin? it is interesting what people have to say about this. let's see some legislation that can pass the senate. and we have the pieces necessary to come together and work out a compromise. there are some democrats in the house you want us to forget about the fact that we passed a bill and pass another bill. no. that is not make any sense. >> the whole student loan issue gets to the issue of affording college. the whole goal is to get more folks to go to college. in your state, you have talked about administrative bloat in the university of minnesota system. how much of this situation is on universities and needing to take a harder look in the mirror about how much they pay their own administrators in century to the cost of higher education? >> it is a great the question. you are getting at the issue, the cost of going to school. do you have too much faculty every institution needs to look at its operation cost and determine how competitive they want to be. we're getting to the point where the cost in tuition and fees and books and all of those things is getting so high that you're

starting to see other forms of competition pop up. i go immediately to online education. you have an incredible range of ideas out there, these massive online courses, books that are effectively free. you have long-standing diversity starting to offer some of their courses online. a lot of community colleges offer some online. the university of texas offers textbooks to other schools. there is a recognition that they have allowed some legacy costs to build up. they have lots of redundancy. they have things they have to clean up. there is a recognition that there is competition. all of those are healthy and trying to costs down. >> are there any of those things that you mentioned that you can add into the higher education act which is up for reauthorization to address the broader issue of cost? i feel like the student loan debate is talking about a very small piece. >> the student loan debate is

very hot right now. we are looking at that doubling of the rates on the subsidized stafford loans. we left out a giant chunk of student loans that are not even addressed by this issue. the real issue is this overall cost of higher education. there are a lot of things we are talking about addressing. one of those is the need for a transparency, more information for students and parents about what the education is going to cost him what they're going to get for it. we passed a very bipartisan bill directing the secretary of education to put together a panel and come back and tell us what is useful information and is it practical to use it. does it address privacy concerns? is it creating a huge burden on colleges and universities? the more students and parents know about what it costs and what they can expect to get out of it, i think the better decisions they can make. that goes back to competition fees. if they can see they can go to college x for $7,000 year and they have an 80% expectation of getting a job or going to college y for $25,000 a year and there is a 50% expectation, these decisions is a lot easier. there's no question that will be part of the higher education.

what will it say? i do not know. we have started addressing these issues. there was a subcommittee hearing today talking about accreditation. there are a lot of challenges about how that works. does that the kind of information you need to make these decisions? >> when can our viewers expect that the legislation would come to the floor? >> certainly not into next year. we have already started having hearings on it. we will probably start getting into it in the fall. i would not expect we would really get into it until 2014. we have other issues that will be up a lot sooner.

the secretary of education act which would be in an amendment for next week. >> we should probably talk about that. we have a little bit more than five minutes left. we will switch topics. no child left behind is up for reauthorization. the senate committee has also been considering legislation. the republicans and the democrats are there at the part

are at the part where they cannot finish the bill. senator alexander has said that your bill will be the one that saves them as republicans. it does away with a lot of federal standards for states. do you think there is any chance that there is a way the republican and democrats can agree? at least in the senate they are not near one another.

>> i should start by thanking senator alexander for his vote up to sport -- of support. this congress is different than the last. a number of important things have happened. most important is the fact that 37 states in the district of columbia have asked for and received the administration's temporary conditional waivers. i know having talked to the stakeholders in minnesota that minnesota as well as other states who have the waiver are now asking the question "what do we do with this?" they are unsure about going down the steps that they were required to agreed to. if the law changes -- so, i think the clamor coming from the education establishment that changes the law will be very helpful right now.

states were feeling that their schools were failing. they got the waiver. they are not happy about it. they want the law changed. i firmly believe that senator harkin and senator alexander and my colleague in the house all want to change the law. we are starting in different places. i fully expect our bill to go to committee and then go to the floor in the past on the house in july. i am hoping that will help push the senate to pass something. if they can pass some

legislation in the senate, then we have an opportunity to come together and start to hammer this out. >> how much does your bill lead to the state? you have been a local control guy for as long as i have known you. do you want to give us a quick ascription of how it changes? pre-k's it gets rid of that -- >> it get rid of a lot of that. they have to develop own accountability system. it does insist that the systems have to test the students in reading and math.

it does say that different from the bill we had last time that you have to assess the science. it does say you have to reports and break that report down so it is disaggregated data. republicans and democrats, almost everybody have a degree that is one of the really good things that came of no child left behind. you cannot mask going to a school. you have certain elements that are constantly being left the hind which was the genesis of that bill. we still insist on that. we insist the states develop a performance evaluation system

that is in part tied to student achievement. we insist they include other stakeholders. we think it is important that we get away from that highly qualified teacher matcher that was in no child left behind and evaluating them based on hamid degrees they had. -- how many degrees they had. we keep some requirements but the vast majority of what we're trying to do, we wanted to reduce that federal footprint. we believe we have this. >> with increased control, states will be able to come up with different recommendations. traditionally, some states have been high achieving and some have not. did you guarantee that a high

school student in mississippi would be just as prepared for college as it would be in massachusetts? >> your final thought, sir. >> we do keep the national assessment program so people can make those sorts of comparisons. if schools are not performing as well, parents will be able to see that. parents are going to see disaggregated data. i think no child left behind did do some important things and raise an awareness and making sure that states are going to step up. >> thank you for your time. i appreciate it. i am back with fawn johnson and derek wallbank. they were just talking about student loans. july first they will go up. what loans are going up? there are several different types. it is in the political dialogue.

you have two different kinds of undergraduate student loans. these are based on your family's income. it is at a rate of 3.4%. on july 1 the rates will double to 6.8%. the non-need-based loans will stay the same. more than half students have a combination of both. in some ways it is a wash. these are new loans we are talking about. not loans you and i are paying off. a lot of students reassess their loans at this time of year. this becomes so present. >> we have two weeks left until they clean out a town to go on the july 4 recess. that is the window we are talking. the difficulty we have is that this congress has been very willing to go right up to the deadline.

we remember that the sequester was supposed to be this horrible and that we never wanted to do ever. then it happened to me still got it. >> is that a reality? >> just to put this in perspective, even the student to take out the maximum amount of need-based loans for four years of college, the amount the something along the lines of 1000 dollars in extra cost over a 10-year time frame.

it is not life-changing money. it is if you do not have a job. it is a minor thing. >> what are we talking about being here? are they really that far apart on this issue? >> it depends on which democrats we are talking about. they are both talking about

tying it to treasury rates. it is a market based thing that has not been in this program. senate democrats are saying let's extend this for two years and then we can talk about how we might want to do it later. i was conversation last year. it is going to come down to it there is a compromise to be had, it seems very clear to say it is very clear between what house republicans have done and what republicans have originally proposed. >> the president needs to get involved. any indication that he will get involved? >> i feel like they can work out the differences on this notebook right here.

is a little strange to me. >> what are they doing on this legislation? >> they are trying to up date this law that was passed in 2001. they're trying to put in place a new way for schools to operate. it is essentially a band-aid approach right now. no child left behind had benchmarks the people could not meet. the house and the senate are working on it. they are very far apart. i think the hope is they can have a similar idea that they do with student loans. i think this'll probably scoot into next year. it is not as controversial as it used to be. >> fawn johnson, derek wallbank thank you very much for your time. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013] >> i know in my small experience, you do see people, journalists, who