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Warren ad counters earlier student-debt viewpoint

Warren and Senator Scott Brown back Stafford student loan rate extension.

In the second television ad of her US Senate campaign, Elizabeth Warren says Washington should get its priorities straight and stop protecting corporate tax breaks while leaving college students “drowning in debt.’’

It is a theme she echoes on her campaign website and in her stump speeches, where she calls for investing in America’s future, in part by investing in public colleges and universities, strengthening grant programs, and forgiving loans.

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But in her past writing as a consumer advocate, Warren blamed universities themselves for the rising cost of college and frowned on the idea of increasing government funding for higher education as a solution, saying that would boost colleges’ budgets without restraining their spiraling costs.

“Liberals, for their part, regularly call on taxpayers to foot more of the bill. But taxpayers are paying more,’’ Warren wrote in “The Two-Income Trap,’’ the book she published in 2003 with her daughter, Amelia Warren Tyagi. “How much more are taxpayers supposed to pay? Are state governments supposed to write a blank check for higher education, allowing universities to increase costs with abandon?’’

“Offering these families more debt is like throwing rocks to a drowning man - it won’t help,’’ she wrote.

Instead, Warren called for cuts in college spending, beginning with a freeze on state college tuition rates, that would spur a campus discussion over priorities, such as whether all colleges should offer expensive sports programs or science and engineering programs.

“If all state-supported universities were committed to stopping tuition increases, the effects would reverberate throughout the educational system,’’ Warren wrote in the book, which is subtitled, “Why Middle-Class Parents Are Going Broke.’’

‘Are state governments supposed to write a blank check for higher education?’

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Alethea Harney, a spokeswoman for the Warren campaign, suggested Wednesday that Warren’s past writings and current advocacy are not mutually exclusive.

“Elizabeth believes we need an all-of-the-above approach to help our kids afford the education and training they need to get good jobs,’’ Harney said in a statement.

The campaign also pointed to Warren’s previous criticism of the student loan industry.

The 30-second ad Warren’s campaign launched this week plays off the current debate in Washington over extending the current low interest rate for federally subsidized Stafford student loans, which are awarded based on financial need. A 2007 law cut the interest rate, but only through June. If Congress takes no action, the rate on loans issued after July 1 will jump from today’s 3.4 percent to 6.8 percent.

US Senator Scott Brown, the Republican whom Warren hopes to beat in the November election, also supports an extension of the lower Stafford loan interest rates, though last year he voted for a budget-cutting proposal that would have slashed funding for a different college aid program, Pell Grants.

The student-debt issue is not the only piece of Warren’s new ad that drew scrutiny this week.

“I grew up in a family hanging on by our fingertips to a place in the middle class,’’ she said in the ad. “But back then, America invested in kids like me. We had a lot of opportunities. Today, Washington lets big corporations like GE pay nothing - zero- in taxes, while kids are left drowning in debt to get an education. This isn’t about economics. It’s about our values.’’

The assertion that General Electric Co. paid no taxes in 2010 was first raised in a New York Times article that was part of a Pulitzer-Prize-winning series exploring corporate tax breaks.

GE has disputed the assertion without explicitly saying how much it pays in taxes. The company has said it paid an effective worldwide tax rate of 7 percent in 2010 and 29 percent in 2011, but did not specific how much was paid in the United States.

On Tuesday, a nonpartisan watchdog organization, FactCheck.org, disputed Warren’s assertion, saying it was so sweeping it failed to account for GE’s payroll, state, and local taxes. Warren’s campaign countered Wednesday that since she focused on Washington in the ad, she made it clear she was talking about federal income taxes.

“It has been widely reported that companies like GE have legally paid nothing in federal taxes,’’ Harney said in a statement. “Our ad focuses on Washington and the fact that big corporations and billionaires can take advantage of tax breaks and sweetheart deals that let them off the hook while middle class families get hammered.’’

GE’s annual shareholders’ meeting in Detroit Wednesday was disrupted by protesters from the “99 Percent Movement,’’ an offshoot of last year’s Occupy Wall Street organization and a reference to the majority of Americans who are not super-wealthy and, protesters say, are not benefiting from the nation’s economic policies.

Though Warren has sometimes been held up as a spokeswoman for the Occupy Wall Street movement, Harney said the timing of her ads referring to GE’s tax burden was coincidental.

Stephanie Ebbert can be reached at ebbert@globe.com. Follow her on Twitter @stephanieebbert.
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