Thursday, March 11, 2010

Not A Good Sign

I should say I'm shocked and horrified, but I suppose I'm really just kind of numb at this point:

WASHINGTON — With Democratic Congressional leaders and the White House struggling on Wednesday to finalize the details of major health care legislation, House Democrats were desperately trying to prevent another of President Obama’s top legislative priorities – an ambitious overhaul of student loan programs – from becoming a casualty of the health care battle.
Some Democrats said that such a move would stall the student loan changes at a minimum for several months, and perhaps kill the overhaul altogether.
Mr. Obama’s plan would end a program in which the government pays private, for-profit student lending companies to make risk-free loans using taxpayer money. Instead, the proposed overhaul would broaden the government’s existing direct-lending program, saving billions of dollars that the president had proposed using to expand Pell grant scholarships for low-income students.

The current program is literally a huge, multi-billion dollar giveaway to banks at the expense of taxpayers and broke college students. Gail Collins explained it best several months ago:

Let us stop here and recall how the current loan system works:
1) Federal government provides private banks with capital.
2) Federal government pays private banks a subsidy to lend that capital to students.
3) Federal government guarantees said loans so the banks don’t have any risk.
And now, the proposed reform:
1) The federal government makes the loans.
Wow. You really do wonder why nobody came up with this idea before.
I wrote more about it here. The current system is such a ludicrous, egregious handover of taxpayer money to banks that it is simply impossible to defend. And yet the reform of this system will probably fail because enough Democrats will join every single Republican in voting against it.

If this can't be reformed, how can we every expect to do anything to slow the rising cost of health care or reduce the military or keep the banks from finishing off the US economy.

Some days, I just see no future for this country.

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