Harkin’s reconciliation vs. Socialized banking

Back in April the Senate agreed on budget reconciliation rules to move an education measure forward with 50 votes instead of having to break a filibuster with 60. And now Senator Tom Harkin (D-Iowa), the newly appointed chair of the Senate Health, Education, Labor, and Pensions (HELP) Committee, is preparing for just that approach.

Senator Harkin is thought to be risking an intra-party battle by fast-tracking legislation that seeks to cut off federal subsidies to student loan companies. While Harkin had voiced some initial concerns about the President’s proposal, he has historically been a supporter of the program according to the National Association of Student Finacial Aid Administrators [NASFAA].

Harkin said he will attempt to use special budget rules that only require a simple majority vote to advance a bill that would end the Federal Family Education Loan program, which would free up money for other education programs.

But some Democrats may be resisting Harkin’s move to use the reconciliation process for an education bill that arguably includes major policy reforms, echoing concerns they raised over using those rules for healthcare legislation. The goal of the President’s proposal is to end subsidization of the private student lending market, and direct those funds to an increase for Pell Grants and other awards to make college more affordable. This would redirect approximately $87 billion dollars over 10 years directly to students.

In essence it’s a simple cost-control solution. Reconciliation is supposed to be used purely for budget items, and this specifically saves money in one area of the budget and shifts it to other programs; theoretically there should be no parliamentary constraints precluding reconciliation to enact this reform, but naturally those who wanted that $87 billion to pass through their hands are not happy that Harkin, a long-time advocate for doing the right thing for students at all levels, might cut some fat and pork out of the student loan process.

You’re curious enough to have followed the discussion this far. Are you going to articulate your own thoughts for the benefit of your Senators, or sit back and let the lobbyists use their well-documented, well-funded influence? Part of their pay comes out of that Student Loan subsidy program as overhead, after all — that’s the policy-level reform which has bankers and lobbyists rallying votes against reconciliation in this case.