Student Loans Make Health-Care Bill Even More Complicated

In another twist in the health-care-reform saga, the Democrats announced Thursday a plan to include the contested Student Aid and Fiscal Responsibility Act (SAFRA) as a part of the final reconciliation bill sent to the Senate.

The student aid bill passed the House in September and has been struggling in the Senate, with several Democrats opposing it. These senators—Bill Nelson (Fla.), Tom Carper (Del.), Blanche Lincoln (Ark.), Jim Webb (Va.), Mark Warner (Va.) and Ben Nelson (Neb.)—say SAFRA will cost their states major money and jobs. The bill would cut subsidies for large banks that supply student-loan funds and would lend directly to students.

Sallie Mae, one of the largest private student lenders, estimates 2,300 jobs would be lost by this move. But Rep. George Miller (D-Calif.), chairman of the House Education and Labor Committee, and SAFRA supporters argue the bill would create jobs while making higher education more affordable for families.

The trick is whether grouping student-aid legislation with health-care reform would “kill the bills” or bolster both. Sen. Thomas Harkin (D-Iowa), chairman of the Senate Health, Education, Labor, and Pensions Committee, suggested by linking the two bills that health-care reform would be more likely to pass.

Miller and the gang seem to think Democrats (and maybe a couple Republicans) opposed to health-care reform but in favor of student-loan legislation would change their vote to pass both bills and vice versa. Miller seemed to draw on the growing public anger at corporations and big business in hopes of garnering more support for SAFRA and the plan to link the two bills.

“Families and students who rely on federal student aid need to know that Congress sides with them and not with the big banks,” Harkin said. “The federal government has been subsidizing these banks and wasting taxpayer money for far too long. It’s time to end it.”

It’s a tricky strategy because even using reconciliation, 51 votes are needed to pass either bill. The six senators who have voiced concern about the tactic say they won’t vote for the student-loan package—meaning that if SAFRA doesn’t win enough support, it could reasonably bring health-care reform down with it. (Most Republicans have spoken out against any proposal that would take away subsidies from private lenders.)

If SAFRA isn’t grouped with the health-care reform, it would remain in the Senate, where it has been since September and isn’t likely to pass with the filibuster-proof 60 votes. Congress is restricted to pass only one bill using reconciliation until it approves a budget. With Democrats unsure of when a budget would pass this year, SAFRA might not get passed at all without being linked to the health-care package. And Miller’s group seems to be banking on that motivating other Democrats into pushing both bills through.