Research Briefing

Using Reconciliation For Government Takeover Of Health Care Not Enough, So Dems Add Government Takeover Of Student Loans

“Senate Democratic Leaders Have Decided To Pair An Overhaul Of Federal Student Lending With Healthcare Reform …” (Alexander Bolton, “Dem Plan To Twin Healthcare And Student Lending Complicates Vote,” The Hill, 3/8/10)

GOVERNMENT TAKEOVERS OF STUDENT LOAN AND HEALTH CARE INDUSTRIES SHOW THAT DEMS ARE WILLING TO DO ANYTHING TO SHOVE THEIR AGENDA THROUGH

Student Loan Takeover An Example Of “Backroom Politics At Its Worse” And Will Be Done With No Committee Markup And No Transparency. “A lobbyist for one student lending institution said it would be backroom politics at its worst if Democrats passed a student lending bill under reconciliation without even marking up the bill in committee. ‘We don’t like that this is rampaging through the Senate without the benefit of one hearing,’ said an industry lobbyist.” (Alexander Bolton, “Dem Plan To Twin Healthcare And Student Lending Complicates Vote,” The Hill, 3/8/10)

• Dems Need To Add The Loan Takeover To The Health Care Takeover To Get Around Bipartisan Opposition. “This makes it tempting to stick the Senate’s student lending bill along with a healthcare reform measure in a budget reconciliation package expected to hit the floor later this month. Using reconciliation means, Democrats could pass the student lending overhaul with only 50 votes — assuming Vice President Joe Biden is on hand to break a 50-50 tie.”  (Alexander Bolton, “Dem Plan To Twin Healthcare And Student Lending Complicates Vote,” The Hill, 3/8/10)

Health Care Deals Like The Cornhusker Kickback And Louisiana Purchase “A Quantum Leap” Over Previous Presidential Horse Trading. “The multimillion-dollar deals cut with Sen. Ben Nelson (D-Neb.) and others… may also have upped the ante for future presidential horse trading… The deal critics have dubbed the Cornhusker Kickback is expected to cost the federal government $100 million over 10 years. Before a close vote last month, Sen. Mary Landrieu (D-La.) won an even larger break for her state … Some critics branded the special deals as functionally equivalent to the kind of earmarks Obama crusaded against as a senator — and a quantum leap from eleventh-hour deals Obama’s predecessors have cut.” (Josh Gerstein, “Pork Greased Reform’s Passage,” Politico, 12/22/09)

TAKEOVERS THAT WILL HURT THE PEOPLE THEY’RE SUPPOSED TO HELP …

House Dems’ Takeover Of Student Loans Will Put Bureaucrats In Between Students And Financial Aid They Need For Higher Education. “The Obama plan calls for the U.S. Department of Education to move from its current 20% share of the student-loan origination market to 80% on July 1, 2010, when private lenders will be barred from making government-guaranteed loans… The news from Washington now is that rather than scaling back federal involvement, the pols want the U.S. Department of Education to be the exclusive banker to America's college students … parents will soon have no choice beyond a Washington bureaucracy to borrow money for their college-bound children.” (Editorial, “The Quietest Trillion,” The Wall Street Journal, 9/12/09)

• College Administrators Fear House Dems’ Takeover Of Student Loans Will Hurt Students. “The fear is that the bureaucrats will not be able to pull off a takeover in just eight months. ‘Any delay in getting funds to schools on behalf of students will result in our needing to find resources at a time when credit is difficult to obtain,’ warns the letter [from three dozen college administrators].” (Editorial, “The Quietest Trillion,” The Wall Street Journal, 9/12/09)

Government-Run Health Care Could Force Doctors To Decline Medicare Patients. “Rep. Eric Massa [D-NY] said tightening provider payments could lead to access problems for patients. ‘We will force doctors to decline Medicare patients,’ he said after a raucous town-hall meeting in Upstate New York. ‘If we believe these savings are there, let’s test the concept. But we can’t hinge the entire funding of this bill on these not-yet-seen savings.’” (Ceci Connolly, “Seniors Remain Wary Of Health-Care Reform,” The Washington Post, 8/9/09)

WILL KILL JOBS …

Lenders Would Cut 35,000 Jobs After Government Takes Control Of Student Loans. “But the student loan industry estimates that nearly 35,000 jobs would be lost if the federal government lent directly to students and only let private companies service the loans. Sallie Mae, one of the largest private lenders, would cut an estimated 2,500 workers in Pennsylvania, Indiana, Delaware, Virginia, New York and Ohio. Nelnet, a student lending company based in Nebraska, has already laid off employees in Indiana and Florida and could cut additional workers in Colorado.” (Alexander Bolton, “Dem Plan To Twin Healthcare And Student Lending Complicates Vote,” The Hill, 3/8/10)

New Health Insurance Regulations Will Force Businesses To Pass Costs To Consumers And Hire Less Workers. “‘Those who are likely to be affected are those who work at smaller firms where coverage isn’t as comprehensive and their employer doesn’t subsidize much of the premium cost,’ said Elizabeth McGlynn, associate director of RAND Health, a division of the RAND Corporation. … And for employers compelled by the mandate to add or enhance coverage, she said, the higher costs might very likely be passed on to consumers of their products or services, or prompt them to hire fewer workers.” (Katharine Q. Seelye, “Employer Mandate Becomes Sticky Issue In Reconciling Bills,” The New York Times’s “Prescriptions” Blog, 10/31/09)

• In Lorain County, Ohio, The Threat Of Obama’s Medical Device Tax Is Causing One Of Their Largest Businesses To Stop Hiring. “[I]n the short run, some of his policies could cost existing jobs, especially health-care reform, if it is enacted. One of the few large businesses that has prospered in Lorain County in recent years has been Invacare, a maker of home medical devices, such as walkers and wheelchairs… The company has 1,300 employees in Lorain County but has stopped hiring in anticipation of a tax on medical devices that was proposed to help pay for the president’s health-care reform plan.” (Michael A. Fletcher, “Assessing Obama’s Promises Of Jobs In A Hub Of Manufacturing,” The Washington Post, 1/22/09)

AND ARE COMPLETELY PARTISAN

Lending Agency Sallie Mae Called For A Bipartisan Bill But Says Dems “Considered Only The Government Takeover Proposal.” “Sallie Mae, a major player in the fight, has called on Democrats to craft a bipartisan bill and has called for improvements to Obama’s proposed reforms. ‘Student loan reform represents an opportunity for bipartisan collaboration,’ Sallie Mae wrote in a February press release. ‘We are disappointed there has not been more debate on these important issues. Congress has held one hearing on reform and considered only the government takeover proposal.’” (Alexander Bolton, “Dem Plan To Twin Healthcare And Student Lending Complicates Vote,” The Hill, 3/8/10)

Sen. Olympia Snowe (R-ME) Was Supportive Of Health Reform Efforts, Until Reid “Decided To Pursue A Democrat-Only Strategy.” “Snowe remains one of the most coveted votes by the White House and Senate Democratic leaders because she would represent the scent of bipartisanship in the face of a nearly united GOP opposition. But her role in the process became less prominent after Senate Majority Leader Harry Reid (D-Nev.) decided to pursue a Democrat-only strategy in bringing the measure to the floor.” (Emily Pierce, “Snowe Chilled By Reid’s Slight,” Roll Call, 12/7/09)

• “[D]emocrats Hope The Summit Could Provide Them Political Cover To Go It Alone On A Party-Line Vote If Republicans Say They Won’t Provide Any Votes For An Obama-Style Health Fix.” (Carrie Budoff Brown & Patrick O’Connor, “No High Hopes For Health Care Summit,” Politico, 2/9/10)