Democrats weigh twinning health, student loan measures

Mar 10, 2010 — Washington Post

Post Editor

By Shailagh Murray

As Democratic leaders push to finish health care this month, they are weighing whether to add a separate measure that would overhaul the student loan system and expand Pell Grants.

Pairing the health care and education bills could allow President Obama to claim victory on two of his top domestic priorities in a single signing ceremony. The education legislation would diminish the role of private lenders in the student-loan system, converting federal subsidies now paid to firms like Sallie Mae, into additional Pell Grant funding for students struggling to keep up with rising college costs.

The Congressional Budget Office estimates the savings could reach about $67 billion over 10 years, although that sum has declined in recent months as colleges switch from private lending to direct federal loans, in anticipation that the overhaul would eventually pass.

Anticipating problems in the Senate, where a handful of Democrats are eager to protect lenders in their home states, congressional leaders included the student loan overhaul in budget reconciliation instructions for the current fiscal year. That would provide the bill with the same protections from a Senate filibuster that are also being extended to health care. But under reconciliation rules, the two measures must move in tandem.

House and Senate Democratic leaders debated whether to add the education language during a meeting Tuesday evening in the office of House Speaker Nancy Pelosi (Calif.). Democrats who participated in the strategy session said no decisions were made. The group -- which also includes White House Chief of Staff Rahm Emanuel -- is expected to resume the discussion when it reconvenes late Wednesday afternoon.

Six Senate Democrats signed a March 9 letter to Senate Majority Leader Harry Reid urging him to consider alternatives to the student loan overhaul that would put fewer jobs at risk, while still increasing education aid.

Signatories include Sen. Ben Nelson (D-Neb.), whose state is home to Nelnet, a major private lender, and Sens. Bill Nelson (D-Fla.) and Blanche Lincoln (D-Ark.), all of whom have expressed serious concerns about the health-care bill. Others on the list are Sens. Tom Carper (D-Del.), Mark Warner (D-Va.), and Jim Webb (D-Va.). The two Virginia senators represent hundreds of employees of Reston-based Sallie Mae.

Democratic aides said a major opponent of merging the two bills is Senate Budget Committee chairman Kent Conrad (D-N.D.), who fears procedural complications. The reconciliation package, now expected to be unveiled next week, would amend the Senate health-care bill to address concerns of House members , who are refusing to vote for the Senate bill without an ironclad assurance that the fixes also will clear both chambers. Conrad, among others, is wary about adding any language that could cost votes and lead to GOP parliamentary challenges, thus jeopardizing passage of health care