Student loan reform is change we can believe in

The student loan reform that Congress just approved as part of the budget reconciliation bill has been overshadowed by the health insurance reform process, but it's very good news for future college students. Senator Tom Harkin's office summarized some benefits in a March 18 press release, which I've posted after the jump. The most important change is that the government will stop subsidizing banks that currently make big profits on student lending. Instead, the federal government will expand its direct student loans, saving $61 billion over 10 years. Most of the savings will go to increase Pell grants.

Just a couple of months ago, student loan reform appeared endangered because of Republican obstruction and corporate-friendly Democrats who didn't want to cut student loan companies like Sallie Mae out of the equation. In early February, the New York Times reported on the extensive lobbying campaign against this bill. (One of the key lobbyists for the banks was Jamie Gorelick, a familiar name from Bill Clinton's administration.)

Scott Brown's victory in the Massachusetts Senate election made it even less likely that Democrats could round up 60 votes to overcome a filibuster of student loan reform.

Fortunately, Senator Tom Harkin and other strong supporters of this reform were able to get the measure included in the budget reconciliation bill that was primarily a vehicle for passing "fixes" to health insurance reform. Not only is student loan reform a good idea in itself, I agree with Jon Walker that adding it to the health reform improved the political prospects for getting the reconciliation bill through the Senate. Democrats from several states were said to be balking on the student loan reforms, but only three senators who caucus with Democrats were willing to vote no on yesterday's reconciliation bill.

This reform is scaled back somewhat from the original proposal, which would have saved $87 billion over 10 years and passed the House of Representatives last September on a mostly party-line vote. The original proposal would have provided larger increases in Pell grant funding, because it was budget neutral. In order to be included in the budget reconciliation measure (and therefore not subject to a Republican filibuster in the Senate), the student loan reform had to reduce the deficit. But that compromise was well worth making in order to move to direct lending by the government.

Regarding health insurance reform, financial regulation and many other issues, I'm one of those "cynics and naysayers" President Obama decried in yesterday's speech in Iowa City. But this student loan reform is a big step in the right direction, and the Democrats in the White House and Congress who kept pushing for it deserve credit.

There's more...

House passes revised reconciliation bill

It wasn't nearly as suspenseful as Sunday's vote, but the House of Representatives passed the revised budget reconciliation bill tonight by a vote of 220-207 (roll call). The bill contains changes to the health insurance reform President Obama signed into law on Tuesday, as well as a student loan reform that replaces subsidized private loans with direct lending by the government. The Senate had approved the bill earlier today, but minor changes were made in the section regarding Pell grants, which is why the House had to vote on the new version.

Here's your laugh for the day: MSNBC's Chris Matthews still thinks he was right and Representative Alan Grayson was wrong about whether changes to the health care bill could be passed using the budget reconciliation process.

Senate passes reconciliation bill 56-43

Senate Republicans failed to derail passage of the budget reconciliation bill containing changes to the health insurance reform bill and to the student loan program. The vote was 56-43, with all but three Democrats (Blanche Lincoln and Mark Pryor of Arkansas, Ben Nelson of Nebraska) voting yes and all Republicans present voting no. The Democratic strategy was to defeat all proposed amendments, so no Democrat offered an amendment to put a public health insurance option in the bill. However, some changes to the part of the bill dealing with Pell grants were made, which means the amended version of the reconciliation bill will have to go back to the House for another vote.

I assume the House will have the votes to pass the amended reconciliation bill. In theory, House Democrats could try to add a public health insurance option, but that would require another vote in the Senate. I think leadership wants to declare victory on this issue and move on.

Speaking of health insurance reform, it turns out the bill Obama just signed had a loophole that will allow insurers to keep denying coverage to children with pre-existing conditions until 2014. Health and Human Services Secretary Kathleen Sebelius claims this can be fixed through rule-making, but we'll see. I suspect insurance companies will be able to work around most of the supposedly tough regulations in the new law.

The Pulse: House Passes Health Care Reform

By Lindsay Beyerstein, Media Consortium blogger

Last night, the House of Representatives passed comprehensive health care reform after more than a year of fierce debate. The sweeping legislation will extend coverage to 32 million Americans, curb the worst abuses of the private insurance industry, and attempt to contain spiraling health care costs.

There's more...

Another health insurance reform news thread

President Barack Obama gave House Democrats a pep-talk today, and his speech (which wasn't pre-written) got rave reviews from many Democrats. If only the Senate bill were as good as Obama made it sound.

As Nathan mentioned earlier today, House Democratic leaders have decided to ditch the "deem and pass" method for passing health insurance reform with a single vote, even though the legislative procedure isn't as rare or controversial as Republicans would have you believe. Instead, the House will hold an hour of flood debate tomorrow on "the rule to allow reconcilation to get to the floor," then House members will vote on the rule, then they will debate the Senate health insurance reform bill and vote on it. I assume this means that House Speaker Nancy Pelosi is confident she has the 216 votes she needs.

Bart Stupak is now claiming only about half a dozen Democrats are willing to vote against the bill unless it contains major new restrictions on private insurance coverage of abortion. Stupak was supposed to hold a press conference this morning, but he cancelled it, so maybe that means he didn't get the deal he was hoping for from Pelosi. David Dayen speculates on who is still in the Stupak bloc. David Waldman warns about the prospect that Stupak will use a "motion to recommit" to try to get his anti-abortion language into the reconciliation fix package.

Senator Tom Harkin and the three Iowa Democrats in the House "announced a major breakthrough today on the issue of Medicare payment reform in the final health care reform bill," according to a joint press release. Excerpt:

[Representatives Dave] Loebsack, [Senator Tom] Harkin, [Leonard] Boswell and [Bruce] Braley have been outspoken advocates for changing the way Medicare pays health care providers for services, from its current fee-for-service system into a quality and value-based system.

Loebsack, Harkin, Boswell and Braley helped negotiate a compromise adding language to the health care reform bill that provides an immediate $800 million to address geographic disparities for both doctors and hospitals, as well as written guarantees from Health and Human Services Secretary Kathleen Sebelius for further action to reform Medicare reimbursement rates that do not qualify for reconciliation under the Byrd Rule. The Senate bill previously only provided a Medicare reimbursement fix for doctors.

The House reconciliation package maintained automatic implementation of a value index as part of the reimbursement structures for doctors, beginning in 2015. This language was secured in the Senate bill with the help of Harkin and is based on Braley’s Medicare Payment Improvement Act, introduced in June 2009. Under the fixes secured in the Senate bill and the House reconciliation package, Iowa doctors will see five percent increases in current Medicare reimbursement rates in both 2010 and 2011.

I posted the whole press release, containing more details, at Bleeding Heartland. This deal appears to have secured the vote of Peter DeFazio (OR-04) as well. Yesterday he threatened to vote no because of language on the Medicare payments disparity.

Outside the Capitol, tea party protesters shouted racist insults and held signs threatening gun violence if health care reform passes. Congressional Republicans should disavow this reprehensible behavior, but of course they won't.

Share any relevant thoughts in this thread.

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