By Alexander Bolton - 03/11/10 06:17 PM EST
Rep. George Miller (D-Calif.), a top lieutenant to Speaker Nancy
Pelosi (D-Calif.), said Democratic leaders would pair a student loan bill with
healthcare reform, throwing a new wrinkle into the health debate.
Miller confirmed that leaders would attach a controversial student loan bill, a high priority of President Barack Obama's, to a healthcare "sidecar" bill that will pass under budget reconciliation rules.
Miller, the chairman of the House Education and Labor Committee, crafted the student loan bill as well as elements of the House healthcare bill.
"You can only send one budget reconciliation [package]," Miller said.
The lending legislation would make the federal government the originator of student loans, essentially eliminating the private student loan industry. Under the proposed reform, private banks would still service the loans.
The Congressional Budget Office estimates the bill would save taxpayers $67 billion over 10 years.
But private lenders argue that the legislation would result in the loss of 35,000 jobs.
Miller's office refuted that claim, accusing banks of using a "scare tactic" in a "desperate attempt to save their subsidies."
“The truth is our bill creates and retains jobs," said Miller spokeswoman Rachel Racusen. “It maintains a robust and appropriate role for private banks and lenders in servicing loans. Servicing loans through the Direct Loan program will not only preserve most jobs, it will bring jobs back home that can currently be shipped overseas by lenders. Sallie Mae’s recent decision to bring 2,000 jobs back home in order to win a Direct Loan servicing contract is a perfect example.”
Pairing the student loan legislation and the healthcare sidecar bill, which includes changes demanded by House lawmakers, could make it more difficult to pass a reconciliation package through the Senate.
But Sen. Tom Harkin (D-Iowa), chairman of the Senate Health, Education, Labor and Pensions Committee, said he believes the education provision will help move the healthcare bill.
"I think it is going to enhance it in the Senate when people understand what this is about and get through the misinformation that is out there," Harkin said.
As many as seven Senate Democrats are expected to oppose the student
loan bill. It's unclear how pairing it with healthcare reform would
affect their support of a reconciliation package.
At a noontime press conference, Senate Majority Leader Harry Reid (D-Nev.) said Senate Democrats would discuss linking the student loan bill and other healthcare issues at an afternoon caucus meeting.
This article was updated at 2:18 p.m.