Washington Report

House Ousts Private Lenders From Student Loan Business

The House of Representatives on Thursday voted 253-171 for the Student Aid and Fiscal Responsibility Act, for the biggest overhaul of the student aid program to take place in 35 years.

Passed largely along party lines, the bill ousts Sallie Mae, the biggest student lender, and private lenders from the college student loan business, gives the federal government control of the process, and uses the savings from eliminating the middle man to increase Pell Grants. Colleges have until July 1, 2010, to switch to the federal direct lending program. According to the Congressional Budget Office, this will save taxpayers an estimated $87 billion, $40 billion of which is to be spent on Pell Grants.

Rep. Donald Payne (D-New Jersey), who sits on the House education committee, said that in addition to increasing the maximum amount of a Pell Grant to $6,900 over the next decade, the bill reduces loan interest rates and bill simplifies the application process.

“This will reach tens of thousands of students over the life of the bill and will open up doors for many more black students who previously found it difficult or impossible to get a higher education,” said Payne.

Minnesota Rep. John Kline, the ranking Republican on the House Education and Labor Committee, released a statement saying that the vote “vote was about expanding the size and scope of the federal government through tens of billions of dollars in new entitlement spending and the elimination of choice, competition, and the innovation of the private sector. This job killing legislation is rife with hidden costs that will be passed on to future generations.”

According to a Senate Democratic aide, a companion bill is currently making its way through committee.

What to Look for at the CBCF’s Annual Legislative Conference

The Congressional Black Caucus Foundation’s Annual Legislative Conference next week offers prime opportunities for attendees to get up close and engaged with legislators and other government officials on a broad range of issues. It also doesn’t hurt that so many CBC members also chair some of the most powerful committees and subcommittees in the House.

On the agenda is an economic security and small business track that will be of particular interest to experienced entrepreneurs and those just starting to think about striking out on their own.

Braintrust forums, which are led by lawmakers, will cover such topics as doing business with the Department of Homeland Security; how the Rothe ruling,  in which the U.S. Court of Appeals struck down a Department of Defense minority preference contracting program, affects minority contracting; tapping into the stimulus; barriers to wealth creation in the black community; and preparing for and obtaining small business financing. The national town hall meeting will cover economic recovery and opportunity.

The emerging leaders track includes a roundtable with young elected officials, policy experts and members of the Obama administration. It also features a session on higher education funding in the current economic climate, which is right on time since the House just passed a bill on that very topic that aims make paying for college a lot easier.

The conference runs Sept. 23-26 at the Walter E. Washington Convention Center in Washington, D.C. On-site registration is available for $100.

Baucus Presents Health Bill

Senate Finance Chairman Max Baucus (D-Mont.) released his l0ng-awaited healthcare legislation and was rewarded for his efforts with criticism from Democrats and Republicans. After months spent trying to create a bipartisan bill, the three Republicans and three Democrats on the committee known as the “Gang of Six” couldn’t reach an agreement, so the chair stood alone when he presented his draft.

The 220-page document calls for individual mandates, but doesn’t mandate that employers provide coverage. However, employers with more than 50 workers that don’t offer insurance would pay a penalty of up to $400 per full-time to reimburse the government for the employee’s healthcare affordability tax credit. The bill expands Medicaid to cover low-income adults; and would impose a fee on insurers that offer “Cadillac” health insurance plans. It does not create a public, or government health plan, option to compete with private insurers but does call for health insurance cooperatives.

Some Senate Democrats have balked at the individual mandate, which would require individuals and families that don’t get coverage to pay respective penalties of up to $950 and $3,800 per year.

Many Republicans have said they won’t support the bill. Sen. Olympia Snowe, one of the gang members, says she’ll keep working on the bipartisan effort, “but a number

of issues still need to be addressed — including cost assumptions and ultimate affordability to both consumers and the government as well as ensuring appropriate competition in the health insurance exchange.”

Shut Up and Let It Go?

President Barack Obama faces a quandary. During interviews scheduled to air Sunday on ABC, CBS, NBC, CNN, and Univision, and also an appearance on the “Late Show With David Letterman” on Monday, Obama will undoubtedly be asked five variations of question he wants to avoid like the swine flu: “Are the teabag and other conservative protests against his political agenda steeped in racism?”

Despite Obama’s desire to put to rest the matter of Rep. Joe Wilson, the South Carolina Republican lawmaker received a slap on the wrist this week when the House passed a “resolution of disapproval” of his “You lie!” outburst during Obama’s joint address to Congress last week. Minority leader John Boehner and other Republicans called the reprimand a “partisan stunt” to distract the public from more important issues.

But many Democrats–particularly Majority Whip James Clyburn–felt they couldn’t rest until Wilson publically apologized to his colleagues or was sanctioned. After the vote they were ready to move on, but then former President Jimmy Carter weighed in reviving the issue.

“I think an overwhelming portion of the intensely demonstrated animosity toward [Obama] is based on the fact that he is a black man,” Carter told NBC News.

Boehner and the Republican National Committee say voters are merely expressing their anger over the president’s proposals and the nation is experiencing a major political rebellion.

Civil rights icon Rep. John Lewis of Georgia said Carter is right. “This reminds me of the 60s and is a very sad moment in our history. Gov. George Wallace didn’t throw the bomb or pull the trigger, but he created an environment in which others could. Words are harmful and can lead to violence.”

Senate Small Business Panel Approves SBA Advocacy Nominee

The Senate Committee on Small Business and Entrepreneurship has given a thumbs up to Winslow Lorenzo Sargeant, Obama’s nominee to become the Small Business Administration’s chief counsel for advocacy.

Sargeant, who is African American, is managing director of Venture Investors, a Midwest venture capital company that focuses on healthcare and technology company start-ups. Prior to that he co-founded Aanetcom, a technology company now owned by the publically owned PMC Sierra and served as a program manager for the Small Business Innovation Research program in electronics at the National Science Foundation.

During an August confirmation hearing, committee Chair Sen. Mary Landrieu (R-Louisiana) pointed out that Sargeant does not have a legal background, but has apparently decided that doesn’t matter.

“There is no statutory requirement that the chief counsel be an attorney, rather the chief counsel is an advocate for small businesses in the regulatory process and an important source of research on small business and that is exactly what Dr. Sargeant will be,” Landrieu said in a release announcing the committee’s approval of the nomination.