How Special Interests Crippled Education Reform

When Congress passed the health care bill, with it came a momentous education reform. Signed into law by President Barack Obama, its intention was to help relieve the ever-rising burden imposed by soaring college fees and tuition rates.

This reform was funded by ending a government subsidy to big banks in the business of student loans. Under the previous system, the government ensured that student lenders would always make money; if students defaulted on their loans, the government would pay the money to the student lenders. In a CBS 60 minutes report, think tank expert Michael Dannenberg characterized this as:

a socialist-like system,” he says. “It’s not as if this private entity is assuming any risks. No, no, no. The law makes sure that this so-called private entity has virtually no risk.”

Unfortunately for students, this lucrative government-funded industry did relatively little to benefit them. Take a look at Sallie Mae, perhaps the biggest player in the student loan industry. Sallie Mae’s loans carry a variable interest rate, which right now appears to be 10.55%. In addition it charges a disbursement fee of 3%; other banks have similar fees.

Such practices can make already high student debt astronomical. Take Brit Napoli, who originally borrowed $38,000. According to the CBS report, that loan has ballooned to $71,000. College graduate Lynnae Brown’s $60,000 loan has jumped to an astounding $262,383 after she fell behind in payments.

Education reform was intended to help people like Brit Napoli and Lynnae Brown. Subsidies for big banks and corporations like Sallie Mae were ended. Money for poor people to attend college was expanded. Money was even saved by ending these government subsidies.

The special interests fought every step of the way. They lobbied. They waved cash at Senators. They argued that their jobs were at stake (therefore the bill would “take away jobs”), and that teenagers deserved more choices. In the end, they succeeded in vastly weakening the original ambitions embodied in education reform.

The original bill envisioned a rise in maximum Pell Grants – federal money for low-income students to attend college – from $5,350 today to $6,900 in 2019. Interest on federal student loans was to remain relatively low: 3.4% past 2012 (compare that with Sallie Mae’s 10.55%). Money was to be invested in early childhood education, community colleges (the American Graduation Initiative) and a College Access and Completion Fund. Federal Perkins loans were to be reformed “to reward institutions for their success in graduating low-income students.”

By the time special interests were done with the bill, almost all of this was gone. That increase in Pell Grants – it’s now only up to $5,975, a paltry $62.50 per year. In other news, Harvard College increased its tuition by $1868 for the 2010-2011 year (for a total cost of $50,724).

As for federal student loans: in 2013 the interest rate goes right back up to 6.8%. Investment in community colleges was cut by 80%. Reform of Perkins loans, investment in early childhood education, and the College Access and Completion Fund were scrapped altogether.

This is not to say that education reform has been a miserable failure. Without it, things would be far worse. The maximum Pell Grant would have decreased to $2,150 – or 4.2% the cost of attending Harvard for one year. Community colleges still get some money. Investment in historically black colleges hasn’t been cut. The government will no longer protect lenders who prey on unsophisticated students.

But boy did the special interests succeed in gutting a wonderful bill. The saddest part, moreover, is that their efforts were all pointless. All the lobbying, all the money thrown at Senators like Ben Nelson (Neb.) and Kent Conrad (ND) – it only served to delay the bill. The government subsidies which Sallie Mae so desperately protected are gone. In the end, the only thing the special interests were able to do was make college more unaffordable for millions of poor Americans.



Weekly Mulch: Murkowski Vs. the EPA

By Sarah Laskow, Media Consortium Blogger

On Thursday afternoon, Sen. Lisa Murkowski (R-AK) pulled out a rarely-used Congressional tool in an attempt to keep the Environmental Protection Agency (EPA) from regulating carbon and other greenhouse gasses. Sen. Murkowski offered a “resolution of disapproval” of the EPA’s impending action, which would limit companies’ carbon emissions.

The resolution would overturn the EPA’s finding that carbon dioxide is harmful to the public health. Three Democrats—Sen. Ben Nelson (D-NE), Sen. Blanche Lincoln (D-AR), and Sen. Mary Landrieu (D-LA)—joined Sen. Murkowski and 35 Republicans in sponsoring the resolution.

“Ms. Murkowski’s Mischief‘”

“This command and control approach is our worst option for reducing the gasses associated with climate change,” said Sen. Murkowski on the floor of the Senate yesterday. She called the EPA’s actions “backdoor climate regulations with no input from Congress” and said they would damage the country’s flailing economy.

The EPA first announced in April 2009 that carbon dioxide and other greenhouse gasses posed a threat to the public health. The agency formalized that finding last month, giving itself the power to regulate emissions of greenhouse gasses under the Clean Air Act. In March 2010, for instance, the agency is expected to announce carbon emissions rules for the auto industry that would match California’s higher standards. Sen. Murkowski’s resolution would derail that process.

Sen. Murkowski argued that she wants to give Congress room to come up with a legislative solution to climate change, but her critics see a more dangerous tilt to her resolution. “It’s a radical attempt by the legislative branch to interfere with executive branch scientists,” writes David Roberts at Grist.

Responding to “Ms. Murskowski’s mischief” on the Senate floor yesterday, Sen. Barbara Boxer (D-CA) called the resolution an “unprecedented effort to overturn scientific decision” and “a direct assault on the health of the American people.”

Resolution of disapproval

What is a “resolution of disapproval?” Grist’s Roberts called it “the nuclear option.”

“It would rescind the EPA’s endangerment finding entirely and thereby eliminate its authority over both mobile and stationary sources,” Roberts explains. “Furthermore, the administration would be prohibited from passing a regulation “substantially the same” as the one overruled, so the constraint on the EPA would effectively be permanent.”

This type of resolution was created by the Clinton-era Congressional Reform Act. The resolution has one big advantage: It cannot be filibustered. Passage requires only a majority in both houses of Congress. Members have tried using it in the past to delay the Dubai Ports World deal, derail FCC regulations on new media, and stop the flow of bailout funds.

Kate Sheppard at Mother Jones has been following Sen. Murkowski’s actions closely. She reports that “Senate supporters of climate action say Murkowski could obtain the votes of moderate Democrats from coal, oil, and manufacturing states. However, a resolution would still need to be approved by the House and signed by the president—both long shots, to put it mildly. ‘I think we’re a little worried about [Murkowski’s resolution] winning. I’m not sure we’re worried about it becoming law,’ a Senate Democratic staffer says.”

But Grist’s Roberts argues that passage in the Senate alone would be a problem. “Even if blocked by the House or vetoed by the president, such a public, bipartisan slap at the administration would be highly embarrassing and demoralizing,” Roberts writes. “It would mean at least ten conservative Democrats washing their hands of the administration’s initiative.”

Climate change and Congress

Sen. Murkowski insists that she’s still ready to work with her colleagues on climate change and that it’s better to approach the problem of climate change via legislation, not regulation.

But no one in Washington believes that climate change legislation is going to pass—even come to the Senate floor—any time soon. The issue was already in line behind health care, and the election of Republican candidate Scott Brown to Sen. Ted Kennedy’s Massachusetts seat this week means that none of the bills that the Senate is working on are likely to come to a vote this year.

“There was hope that the [climate] bill would come to the floor in the spring,” writes Steve Benen at Washington Monthly. “Regrettably, a narrow majority of Massachusetts voters have made it significantly more likely that Congress won’t address the problem at all. Proponents focused on solutions have vowed to “persist,” but Massachusetts has made a difficult situation considerably worse.”

The role of special interests

Sen. Murkowski has come under criticism for allowing Bush-era EPA administrators, now lobbyists representing clients on climate change issues, to help her craft an earlier amendment cracking down on the EPA. Yesterday, she said that those criticisms are “categorically false.”

But as JP Leous reports at Care2, Sen. Murkowski does receive substantial backing from energy industries that oppose climate change legislation and regulation.

“According to Sen. Murkowski has received hundreds of thousands of dollars from polluting companies, and some of her biggest campaign contributors in recent years include firms with fossil-fueled motives like Exxon Mobil Corp,” Leous writes “Add those dots into the mix and a different picture emerges — and it starts to look like a person who is poised to introduce legislation next week attacking the Clean Air Act.”

On the Senate floor yesterday, Sen. Boxer charged, “Why would the Senate get in the business of repealing science? Because that’s what the special interests want to have happen now. Because they’re desperate.”

The Democratic Senators who co-sponsored the resolution also come from energy producing states where companies object to the new EPA regulations.

If at first you don’t succeed…

If Sen. Murkowski’s resolution does pass the Senate, there’s little chance it will pass the House as well. But this isn’t the only option that regulation opponents are looking at to fight the EPA. The Chamber of Commerce and other groups are planning to challenge the regulatory action in court, as Mother Jones’ Sheppard reports.

Last week, these opponents met to discuss their strategy. What’s interesting, Sheppard says, is that “the group was apparently divided on the best course of action. The Hill observes that “two camps have emerged.” One wants to challenge whatever rules the EPA issues, while another wants to question the science of global warming itself.”

We’re back to that old saw? With legislation off the table, the fight over climate change, for now, is in the regulatory arena.

This post features links to the best independent, progressive reporting about the environment by members of The Media Consortium. It is free to reprint. Visit the Mulch for a complete list of articles on environmental issues, or follow us on Twitter. And for the best progressive reporting on critical economy, health care and immigration issues, check out The Audit, The Pulse, and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Why the Clinton Library is a Problem

We worry in this country about the undue influence of money in political campaigns. So much so in fact that we set a $2300 limit on how much any individual can donate to a Presidential campaign. The media works its collective fingers to the bone poring over the records to see how much money various donors have given to candidates over the course of their political lives, and rightly so.

But what if there was a Presidential candidate whose spouse received half a billion dollars in unreported contributions for one of their pet projects. What if fully 10% of those contributions were from foreign sources? What if $10 million of that money came from a single foreign entity that not only would be certain to have business before the new President, but who is deeply embroiled in our problems in the Middle East and a huge beneficiary on our dependence upon foreign oil? Would that be important?

Well, that is exactly the case.

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Who's Ready to Make Us Their "Special Interest"?

OK, I know there's been a whole lot of discussion and arguing over "special interests". I keep seeing these accusations fly over who's not "bound by special interests" and who's better apt to "stand up to special interests". But you know what? I'm getting sick of this silly argument. It's time that our next President take special interest in our concerns, and it's time that our next President start considering us to be his/her "special interests".

And you know what? I think I know who that candidate is. Follow me after the flip to find out...

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A Debate Edwards Has to Love

Interesting how races develop. After a thousand rhetorical skirmishes, the defining battle concerns who and how to best effect change. It's actually a good, substantive debate. As summed up by Atrios:

Obama: The system sucks, but I'm so awesome that it'll melt away before me.

Edwards: The system sucks, and we're gonna have to fight like hell to destroy it.

Clinton: The system sucks, and I know how to work within it more than anyone.

Atrios is probably too nasty to Obama--he's not quite that self-aggrandizing--and too kind to Clinton--she doesn't think the system sucks--but, in any case, it's a debate Edwards has to love. Who, in a democratic primary, wouldn't want to be the fighter, as opposed to the compromiser and the corporatist--uh, I mean, hard worker.

Well, everybody on this stage has an idea about how to get change. Some believe you get change by demanding it, some believe you get it by hoping for it. I believe you get it by working hard for change.

It wasn't supposed to be this way, with Edwards still in the thick of the race. Clinton and Obama had planned to out-spend and out-celebrity him into oblivion. The best paid plans.

Many people within the Clinton and Obama campaigns never expected Edwards' support in Iowa to remain this strong. The fact that it has is a testament to the time he has spent in the state and the level of connection that many in the Hawkeye State feel toward him and his message of "the people versus the powerful."

But it's clear now that Edwards will be a serious threat to the end. So Clinton and Obama have to try to tap into his support, which, by most accounts, is increasing.

The Obama camp, for its part, is trying a two-pronged, self-contradicting line of attack. On the one hand, they say JRE's strategy--fighting corporate power--is misguided.

If you put forward a plan that that overlooks insurance companies, it's really hard to understand how you are going to execute it without talking to them. And that's really what Sen. Edwards is saying. We're going to have private insurance companies in my plan but we're not going to talk to them because they are evil and they're bad.

On the other hand, they say Edwards didn't always fight corporate power:

Sen. Edwards, who is a good guy -- he's been talking a lot about, 'I am going to fight the lobbyists and the special interests in Washington.' Well the question you have to ask is: Were you fighting for'em when you were in the Senate. What did you do?

This line of criticism on Edwards has a problem larger even than its inherent contradiction. Obama's chief advisor testified to JRE's toughness on corporate special interests in 2004.

Washington is run by the special interests today ... John Edwards ran headlong into it when he led the fight for the patients bill of rights against the insurance industry in the Senate. He has never taken a dime from lobbyists or PACs. He said, let's ban lobbyist money, so you can't give people a bill to pass in the day and a check at night. And that's how we're going to start changing the culture in Washington.

JRE's reputation for toughness on corporate power was well-established when Obama was still a state senator.

[...I]n the Senate, Edwards was willing to stand up on a number of anti-corporate issues more so than most Democrats. It's the reason that not just Ralph Nader has kind words for him but also people like Ted Kennedy and remember, internally within the Kerry campaign, Ted Kennedy was advocating for Edwards. Because he saw Edwards as a gutsy guy who is willing to take on some bigger issues and to do some rough stuff with it.

And it's worth pointing out, because Edwards himself wisely does, that the kind of politics he's preaching derives directly from his previous profession. This should be easy to understand.  

It is a failure of political reporting that those legal cases are rarely evaluated as anything but potential attack ads. The stories, people, and corporations Edwards came into contact with amounted to a searing, visceral course in old-style populism.

Think of it this way: Hillary Clinton's caution and political savvy are obvious products of an adult life spent entirely in politics, the last 15 years or so on the national stage. Barack Obama's broad appeal and talent for consensus building are not unexpected traits in a former community organizer. So what does spending decades confronting the grievous, heartbreaking damage done to individuals and families by powerful, profit-driven corporations do to a man?

"Every single day," says Edwards' wife, Elizabeth, "what he saw were good people, in great need, who were being mistreated by big corporations -- corporations that knew that they had done wrong, and often insurance companies that were taking a calculated risk going to trial. ... If you took that person, a person who chose that as his life, you would end up with the politics that he's talking about today.


So Edwards is, in short, mighty comfy in this debate, and it shows. In fact, this is the very debate he's long wanted, and it dates back to what I believe to be the turning point of his campaign--the moment he found the perfect way to articulate the fundamental difference between him and his rivals.

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