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News Wrap: Senate Bill to Extend Stafford Loan Rates Stalled

May 8, 2012 at 12:00 AM EDT

KWAME HOLMAN: A bill to continue low interest rates on federal student loans stalled in the U.S. Senate today. Democrats wanted to cover the cost by raising taxes on wealthy stockholders in privately owned companies. Republicans blocked that plan. Instead, they favor taking money from a preventive health fund in the health care reform law. The two sides traded jabs after the vote.

SEN. PATTY MURRAY, D-Wash.: They’re simply unwilling to allow the wealthiest Americans to pay a single penny more in the aid to the recovery of this economy. Instead of closing a tax loophole, Republicans want to pay for this effort by going after funding for child immunizations and diabetes prevention and preventing chronic diseases.

SEN. MITCH MCCONNELL, R-Ky.: The best way to resolve this would be to sit down and discuss the way to resolve the differences between the House and Senate and pass it. So this is — hardly warrants the kind of effort we have seen once again to create a controversy where none exists.

KWAME HOLMAN: The interest rate on the so-called Stafford loans is set to double on July 1 to 6.8 percent.

Political leaders in Israel formed a new coalition government today, giving Prime Minister Benjamin Netanyahu a huge majority in Parliament. Netanyahu emerged from a meeting with the chief opposition party, Kadima, and announced an alliance. He also dropped plans for early parliamentary elections. The move could give the government more latitude in dealing with the Palestinians or contending with Iran.

BENJAMIN NETANYAHU, Israeli prime minister (through translator): The goal was stability, which will enable actions. The goal wasn’t the elections. As I said, I’m willing to go to elections. I’m not thrilled about it. But if it will be imposed on me, I will do it. If there is a possibility to establish a very broad national unity government, that is better.

KWAME HOLMAN: Netanyahu’s current coalition had splintered over demolishing some West Bank settlements, and drafting ultra-orthodox Jewish men into military service.

The blind Chinese activist who set off a diplomatic tussle now says Beijing has promised to investigate alleged abuses of his family. Chen Guangcheng spoke to the Associated Press today from his hospital. He escaped last month from house arrest in his village, and said officials had repeatedly beaten his relatives. Chen took refuge in the U.S. Embassy before leaving last week.

Greece remained in political limbo today after an election that yielded no one a mandate.

We have a report from James Mates of Independent Television News.

JAMES MATES: Until two days ago, the leader of a tiny left-wing faction, today, Alexis Tsipras visited the president of Greece and was asked to try and form a government. He will probably fail. It’s not clear that any party can govern Greece at the moment.

But his program, spelled out at a press conference this afternoon, of reneging own Greek debt, scrapping all cuts and reforms is pretty much what two-thirds of Greeks voted for on Sunday. His party is almost defying the Eurozone to throw them out.

YIANNIS BOURNOUS, spokesman, Syriza Party: There’s no official ruling in any of the European treaties predicting the punishing exit of a member state from the European — or from the Eurozone. In contrast, the only way for the country to exit the Eurozone is voluntarily. So we are not willing to sacrifice our last and our biggest negotiation tool.

MAN: Remember this, that Greece is only the beginning.

JAMES MATES: Sitting across from the far left in parliament will be this man, the leader of the neo-Nazi Party called Golden Dawn. You don’t to talk to him for long to find out what he’s about.

MAN: All the illegal immigration out, out of my country, out of my home.

JAMES MATES: Their party emblem is an adapted swastika. New and this time decisive elections are expected as soon as next month.

ADONIS GEORGIADIS, Conservative member of Greek Parliament: We’re in a very dangerous zone. And Greek people must now decide what they want to do, if they want to stay in the Eurozone or not. I think this would be the big question of the next election.

JAMES MATES: You think it would be a vote on, do we stay in or do we get out?

ADONIS GEORGIADIS: Oh, yes. I’m sure about that now.

JAMES MATES: The Greek people wanted to protest, but they may not have meant to go this far, the country ungoverned and ungovernable, neo-Nazis sitting here in the national parliament.

Little wonder ordinary Greeks are beginning to question what they have done, with papers full of dire warnings from the rest of Europe of what may follow a dissent into extremism.

KWAME HOLMAN: The news from Greece sent stocks falling everywhere today, including on Wall Street. U.S. stocks retreated, despite word that employers in March had posted the most job openings in nearly four years.

The Dow Jones industrial average lost 76 points to close at 12,932. The Nasdaq fell 11 points to close at 2,946.

Those are some of the day’s major stories.