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Student Loan Bill Inserted To Satisfy Reconciliation Requirements?

I think a lot of us were a bit surprised at the speed with which Democratic leaders appeared to add the student loan bill into the reconciliation sidecar of fixes for the health care bill. The deal isn’t done, but the NYT reports that there’s a “tentative agreement” along those lines.

George Miller claimed yesterday that adding SAFRA would help get wayward House Democrats onto the bill. And perhaps it gives them peace of mind that the sidecar fixes would get taken up in the Senate, because the student loan bill is such a priority. And in addition, it squeezes lawmakers like Ben Nelson, who hates the student loan bill but may want to vote for the reconciliation sidecar to cancel out his “Cornhusker Kickback.”

But the biggest reason to include the student loan bill may be to help with the CBO score, at least according to Kent Conrad:

The Senate parliamentarian notified Democratic leaders that, in order to meet the reconciliation requirements, both the Senate health and finance committees would need to produce $1 billion in deficit savings each over the next 10 years, Conrad said.

With health care alone, the Health, Education, Labor and Pensions Committee would not be able to show the items within its jurisdiction save at least $1 billion. By inserting the education package, the committee would satisfy the reconciliation instructions, Conrad said.

At the same time, Conrad won an internal debate among Democrats to use the most current cost estimates from the Congressional Budget Office, which showed smaller savings from the loan package than the estimates used last fall when the House passed the bill. As a result, Conrad dropped one of his major objections.

These actually resist each other a bit. It seems that the student loan savings will be used to show savings in the overall sidecar bill, which means a small amount of that savings – $1 billion – would get used toward deficit reduction. And Conrad’s win on using different estimates from the CBO means that the amount of money that could get plowed into Pell Grants is smaller. So the student loan bill that would pass will certainly be smaller than what was previously voted on in the House.

But it will have a shot at passing this year, rather than waiting while more banks get needless subsidies.

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David Dayen

David Dayen