Harkin rattles centrists using special budget rules on education bill

Sen. Tom Harkin (D-Iowa) is risking an intra-party battle by fast-tracking legislation that seeks to cut off federal subsidies to student loan companies.

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.

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But centrist Democrats are blanching at Harkin’s move to use the reconciliation process for an education bill that includes major policy reforms, echoing concerns they raised over using those rules for healthcare legislation.

It's unclear whether the bill has even the 51 votes it would need to advance under reconciliation. While the legislation has strong backing from the Obama administration, which predicts that it could save the government more than $87 billion over 10 years, Republicans oppose it and enough centrist Democrats have yet to get on board. The bill has already passed the House on a largely party-line vote.

Harkin, when asked this week about centrists' worries, said he plans to go ahead with the special procedure because the budget resolution, approved by Democrats in April, tells him he can.

"We've already been instructed by the Budget Committee to do this, so we're going to do it," said Harkin, the chairman of the Senate Health, Education, Labor and Pensions (HELP) Committee.

Senate Democratic leaders have also signaled openness to force the majority vote.

Majority Leader Harry Reid's (D-Nev.) office noted that reconciliation has been used for education bills before, including in 1997 when Congress approved tax incentives for people to pursue higher education.

"[The] budget resolution we passed earlier this year explicitly included reconciliation instructions for education to give us the option of using this vehicle for this purpose and that option remains on the table," said Joel Payne, a Reid spokesman.

But Senate Budget Committee Chairman Kent Conrad (D-N.D.) said enacting policy changes isn't reconciliation's purpose.

"I'm not interested in using reconciliation for any purpose other than deficit reduction," Conrad told The Hill.

Democratic Sens. Blanche Lincoln (Ark.), Mark Begich (Alaska) Ben Nelson (Nebraska) have come out against the bill because they said it would restrict options for loans. New Mexico Democratic Sens. Jeff Bingaman and Sen. Tom Udall have also objected to the proposal. Conrad and seven other Democrats are on the fence, according to a report last month by Height Analytics, a financial firm studying the student loan sector.

"I just don't think we need to turn it all over to the federal government," Nelson said. Instead of ending the program for private lenders, Nelson suggested that lawmakers find savings by adjusting the amount of money given to private lenders.

Several lawmakers who have opposed or questioned the bill have student loan companies in their states that stand to lose out on business if the proposal becomes law. Nelnet is based in Nebraska. Sallie Mae is based in Pennsylvania. Sen. Arlen Specter (D-Pa.) has voiced concern over the effect of the plan on the 2,200 people in his state who work for the loan company.

Sen. Bob Casey (D-Pa.) said he's mostly worried about whether the bill will save the $87 billion anticipated by the administration. A Congressional Budget Office report, which was requested by Sen. Judd Gregg (R-N.H.) and takes into account the market risk of having the government administer the loans, found the program may save only $33 billion over the next decade.

"There's still a gap there," Casey said.

Casey said he's working with Sen. Tom Carper (D-Del.) on changes to the legislation that could make up for the savings.

The bill won't move in the Senate until lawmakers make more progress on healthcare legislation, Harkin said. If Democratic leaders decide to use reconciliation rules for the healthcare bill, they would have to package it with the education reforms, since Senate rules allow for consideration of only one reconciliation bill each year.