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Student Loans Grafted To Reconciliation

From a damn the rules full speed ahead New York Times:

UCSD Chancellor Marye Anne Fox addressed about 300 students and read from a prepared statement regarding the investigation of a noose that was discovered in the Geisel Library on campus.

Deal Gives New Life to Overhaul of Student Loans

By DAVID M. HERSZENHORN and TAMAR LEWIN

March 11, 2010

WASHINGTON — Democratic Congressional leaders struck a tentative agreement on Thursday that breathes new life into President Obama’s proposed overhaul of federal student loan programs.

The deal would bundle the bill into an expedited budget package along with the Democratic health care legislation, which would allow for both measures to be passed by the Senate on a simple majority vote. Without the deal, the student loan bill would have been unlikely to pass because it lacked the 60 votes needed to overcome a filibuster.

The bill would end government payments to private, commercial student lenders, leaving the government to lend directly to students. It would also redirect billions of dollars to expand the Pell grant program for low-income students, and to pay for other education initiatives.

The maximum Pell grant is set to rise to $5,550 for the 2010-11 school year and, under the deal struck Thursday, would increase automatically each year in line with inflation. As many as eight million of the nation’s lowest-income students receive Pell grants to help pay for college each year. Under current law, Congress must determine any increases.

“Families and students who rely on federal student aid need to know that Congress sides with them and not with the big banks,” Senator Tom Harkin, Democrat of Iowa and chairman of the Education Committee, said at a news conference on Thursday. “The federal government has been subsidizing these banks and wasting taxpayer money for far too long. It’s time to end it.”

Private banks had lobbied fiercely against the bill, which would cut off a longtime stream of revenue. Even on Thursday, lobbyists for the private lenders made a last-ditch effort to stop Democrats from adding it to the budget package.

House Democrats predicted that packaging the two proposals in an expedited budget reconciliation bill would help them secure the needed votes on health care because the financial aid bill is popular. In September, the House adopted that bill, the Student Aid and Fiscal Responsibility Act, by a vote of 253 to 171…

Democrats said that in a caucus meeting Thursday, Mr. Harkin made a compelling case for moving more quickly on the education measure and that other senators had voiced agreement, outweighing doubts raised in particular by Senator Kent Conrad of North Dakota, the chairman of the Budget Committee.

Aides to Mr. Conrad said he was open to packaging the two bills, provided that House Democrats agreed to meet budget reconciliation rules by adjusting the education measure to account for a revised cost analysis by the Congressional Budget Office.

The House-passed bill had anticipated savings of $87 billion by eliminating payments to private lenders, and would have redirected that money to Pell grants and other education programs.

But in recent months, more colleges have joined the government’s direct lending program, in anticipation of the change, generating the savings up front and reducing the amount of revenue that would be available for new spending to about $67 billion…

At the same time, a rise in the number of people attending college and seeking aid in the weak economy has raised the projected cost of new Pell grants to $54 billion from $40 billion…

Mr. Harkin and Mr. Miller said on Thursday that if the financial aid measure was not tied to health care, it might collapse.

Six Democrat senators had written a letter to the majority leader, Harry Reid of Nevada, expressing doubts about the education proposal. And given Republican opposition, the bill was unlikely to win the 60 votes needed to overcome a filibuster.

The decision by Democrats to package the two bills creates tough choices for some lawmakers. Senator Ben Nelson, Democrat of Nebraska, for instance, has reason to vote for the health care bill in part to undo a special provision that Senate leaders included giving Nebraska extra federal Medicaid money.

That provision, derided by Republicans as the “Cornhusker kickback,” has become a political liability for Mr. Nelson. But Nebraska is also home to some major private student lenders, and he will be hard-pressed to vote in favor of a package that ends their lucrative business originating federal student loans.

How is the federal government’s takeover of student loan process and ratcheting up Pell grants going to cut the deficit? When has the government taking over anything ever reduced the cost?

Lest we forget, this is legislative sleight of hand is actually called ‘budget reconciliation,’ and everything in it is supposed to reduce the budget deficit.

But once again we see how any pretense at following rules is being thrown out the window by the Democrats. They are simply drunk with power.

Let’s hope they enjoy it while they can.

This article was posted by Steve on Friday, March 12th, 2010. Comments are currently closed.

6 Responses to “Student Loans Grafted To Reconciliation”

  1. Tater Salad says:

    Just another step to Maxism!

  2. MinnesotaRush says:

    “Democratic Congressional leaders struck a tentative agreement on Thursday that breathes new life into President Obama’s proposed overhaul of federal student loan programs.”

    Need to add, “… breathes new life into President Obama’s proposed overhaul of federal student loan programs and the Destruction of the Country and its’ Constitution!”

    Notice their shameless glee in: “The deal would bundle the bill into an expedited budget package along with the Democratic health care legislation, which would allow for both measures to be passed by the Senate on a simple majority vote.”

    Yet ANOTHER purposeful assault on our manner of governance and Constitution!

    Michelle Bachman and gang will be at our “Kill the Bill” rally here in MN at the Capitol … you can bet, I’ll be there with my gun, bible, and Constitution!!!

  3. proreason says:

    To the man who only has a hammer, the entire world looks like a nail.

    But the kinglette has three tools: fascism, amoral thugism, and his skin color.

    With those three tools, he is trying to dismantle every structure in the country.

  4. GetBackJack says:

    Student Loans

    The only consumer credit instrument I know of that you cannot discharge in a bankruptcy. Regardless of circumstances and/or disability. If you get hit by a tractor trailer and turned into a quadraplegic on a breather you’re still on the hook.

    Once you sign up for this kind of Federally Guaranteed Credit Facility, you’re done for. Reminds me of a contract with Mephistopheles. In other words … Do Not Do Business With this thing called The Federal Government.

  5. tranquil.night says:

    Heck if there’s officially no rules anymore then why not. Public option? Sure. Tort reform; totally!

    Why not spare America the bruising political debate and just throw Immigration and Crap’n’Tax Reform into this huge theoretical Healthcare/Education/Budget Easter Egg. If 50 votes is somehow too many, well.. nevermind.

    I’m standing by Rush’s hypothesis and don’t think the situation has changed. There won’t be reconciliation so all this talk is pointless. This is still all about the Senate bill that was passed and how Nancy will do anything to make her caucus think she’s going to actually produce a reconciliation bill. Double Reverse Twilight Zone? I’ve lost track of all the twists at this point.


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