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SAFRA’s Chances In Reconciliation

As you may know, FDL has launched the Students Not Banks campaign to get the student loan bill passed through reconciliation this year, enabling hundreds of thousands of students to afford college and ending the needless subsidies to the big banks for the privatization of the student loan market.

FDL campaigns get results! Already today, senior Democratic aides have proposed combining the student loan and the health care bills through reconciliation, the only way to pass SAFRA this year:

Senate Democratic leaders have decided to pair an overhaul of federal student lending with healthcare reform, according to a Democratic official familiar with negotiations.

“It’s going in,” said the Democratic source, in reference to the student lending measure.

But leaders may have to reverse themselves if they receive strong pushback from Democratic colleagues who represent states where lenders employ hundreds of constituents.

I’ve been working on this for most of the day, and aides aren’t really talking. But there are risks and rewards to tie in SAFRA with the reconciliation process.

First, some background, although I did go over this yesterday. SAFRA does not currently have 60 votes for passage in the Senate to clear the expected filibuster. Instructions were given last year to move SAFRA through the reconciliation process. However, you can only move one reconciliation bill a year, and the long wait on SAFRA was dictated by Senate leaders waiting to see if they needed reconciliation for health care. Now that reconciliation is the plan, the leadership has a choice: pass SAFRA tied in with health care, or basically wait another year, as higher education costs skyrocket and a major Obama Administration initiative goes by the boards. Adding to this decision is the fact that Democrats would want a tangible success for young voters, those most likely not to vote in the November midterms.

The leadership may see risks in adding student loan reform to the reconciliation bill, however. As The Hill notes, several Democrats who are likely votes for health care, particularly those in states like Delaware and Pennsylvania with a high concentration of the private student loan market, may back away from the reconciliation fixes if SAFRA gets attached. Would that be enough to sink the reconciliation bill entirely? Maybe not in the Senate, where Democrats can afford to lose 9 votes; an industry analyst only sees 7 no votes among the Democratic caucus. But in the House, where the whip count is tight, adding SAFRA could peel off needed votes.

I thought yesterday that, when push came to shove, Democratic leaders would drop SAFRA from their reconciliation plans if it threatened the health care bill. The newfound advocacy and activism around the bill will make that harder to do.

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David Dayen

David Dayen