Sen. Ben Nelson (D-Neb.) said Monday he would vote against a reconciliation package that included changes to healthcare reform and student lending legislation.

Nelson said he opposed the package because the student lending bill would make the federal government the originator of student loans, replacing private lending institutions. Nelson said that would cost 30,000 jobs.

{mosads}Nelnet, a major student lending company, is based in Nebraska.

Nelson said he also opposed the reconciliation package because of higher payroll taxes it would place on unearned income.

The revenue would go into general health funds and Nelson said he would prefer to reserve that source to shore up potential Medicare shortfalls in the future.

Nelson, who supported the Senate healthcare bill in December, was criticized for a $100 million in Medicaid funding for Nebraska that was included in the bill to win his support. The “Cornhusker Kickback” would be removed with the passage of the reconciliation package.

Conservative critics attacked the Medicaid provision and it became a political football in the healthcare debate. House Democrats balked at passing the Senate healthcare bill because it included the provision.
 
Nelson later asked Democratic leaders to remove the controversial language, explaining that he asked for it to serve as a legislative placeholder to help other states win extra Medicaid funding.
 
The reconciliation bill provides additional federal funding of Medicaid for all states compared to the Senate bill.
 
“I am pleased to see the Nebraska Medicaid provision is extended to all states,” Nelson said after learning of the decision in February. “I have said all along that the federal government needs to either fully fund the new Medicaid costs for states, or to un-mandate the requirement on state budgets.”