Morning Action: Harry Reid Pushes for Student Loan Deal
STUDENT LOANS. Senate Majority Leader Harry Reid (D-NV) is pushing a plan to reset student loan interest rates. The Senate will consider both a House-passed bill and a Senate proposal crafted as an amendment to the House bill (sub. req’d):
Senate Majority Leader Harry Reid is forging ahead with a plan to pass this week a bipartisan compromise to reset student loan rates, as the Obama administration vigorously campaigned to tamp down disagreement among Democrats.
Reid received permission Tuesday to consider a House-passed bill (HR 1911) that would link student loan interest rates to the 10-year Treasury note, plus 2.5 percent for the subsidized and unsubsidized portions of the loan and 4.5 percent for graduate loans. Those rates would float from year-to-year with the market rate, instead of being fixed for the life of the loan, but the rates would be capped at 8.5 percent and 10.5 percent, respectively.
Under Tuesday’s agreement, senators will also consider the proposal Senate negotiators crafted last week as an amendment to the bill. That plan that would still peg interest rates on the 10-year Treasury note, but add 2.05 percentage points for both the subsidized and unsubsidized portions of the undergraduate loans, 3.6 points for graduate loans and 4.6 points for PLUS loans.
FARM BILL. Sen. Debbie Stabenow (D-MI) said Tuesday that Senate farm bill conferees are ready and waiting on the House (sub. req’d):
Chairwoman Debbie Stabenow said Tuesday that seven Democrats and five Republicans would act as negotiators.
“We are ready to appoint conferees. We at this point are waiting for them to take a step, I assume to reject the Senate bill, and then ask for a conference,” Stabenow, D-Mich., said Tuesday. Stabenow substituted the Senate farm bill (S 954) for the House-passed agriculture-only bill (HR 2642) on July 18 and sent it to the House with a request to go to conference.
House Majority Leader Eric Cantor has indicated his chamber will not respond until Republican members either rework the nutrition title that was removed from the House Agriculture Committee-passed measure (HR 1947), which later was rejected on the floor, or decide the GOP cannot reach a consensus. Conservative House Republicans wanted larger reductions to the Supplemental Nutrition Assistance Program than the $20.5 billion over 10 years the committee-passed bill proposed.
Stabenow said any final farm bill must have a nutrition title and noted that the Democrat-controlled Senate backed $4 billion in SNAP cuts over 10 years in her committee’s bill and rejected amendments that called for larger cuts to the program.
We have explained the dangers of going to a farm bill conference because a conference will certainly not result in conservative legislation.
OBAMA. President Obama will give a speech today focusing on the economy. Heritage explains that there are three important he might address that matter for Americans’ ability to “get ahead,” namely jobs, Obamacare, and America’s crushing debt:
Obama told supporters earlier this week that his speech today will focus on the economy. He said: “There is no more important question for this country than how do we create an economy in which everybody who works hard feels like they can get ahead?”
For liberals, that usually means that one person’s “getting ahead” is going to come at the expense of a hard-working taxpayer.
As Heritage President Jim DeMint has pointed out, “In poll after poll, Americans continue to make their concerns known loud and clear. They are worried about the lack of jobs, rising healthcare costs and out of control federal spending and deficits.”
THUD. The Transportation-HUD spending bill would provide $15 million for a project to build twin rail tunnels connecting New Jersey and Midtown Manhattan (sub. req’d):
A project to build twin rail tunnels connecting New Jersey and Midtown Manhattan championed by the late Sen. Frank R. Lautenberg would get $15 million if Senate appropriators get their way.
The Transportation-HUD spending bill (S 1243) now before the Senate would provide $1.45 billion in federal grants to Amtrak, compared with a total of $950 million in the House bill. In the committee report accompanying their bill, Senate appropriators directed that “no less” than $15 million of the amount allocated for capital improvements shall be spent on the Gateway project.
The project was unveiled in 2011 after New Jersey’s Republican Gov. Chris Christie canceled a planned rail tunnel project. Two rail tunnels beneath the Hudson River would link New Jersey to Manhattan’s new Moynihan Station adjacent to the existing Pennsylvania Station. The tunnels are projected to accommodate an additional 13 NJ Transit commuter trains per peak hour and an extra eight Amtrak trains per hour.
Amtrak President Joseph H. Boardman has called the project critical to the strategy of bringing 220-mile-per-hour passenger trains to the Northeast Corridor.
Heritage explains that Amtrak should be privatized through the THUD legislation, which would save taxpayers $950 million:
Losses on Amtrak’s state-supported and long-distance routes overshadow its profitable routes and services (including the Northeast Corridor), resulting in annual net losses and the need for massive federal subsidies. Congress should require Amtrak to subject the operation of its lines to competitive contracting, which would improve service and lower its operating costs. Privatization would occur over the course of several years, at which point full savings would be realized. When compared to FY 2014 spending, savings are $350 million in operating grants and $600 million in capital and debt service grants.
FANNIE and FREDDIE. The House is discussing the measure designed to phase Fannie and Freddie out over a five year period (sub. req’d):
A House panel on Tuesday began consideration of an overhaul of the federal housing finance system.
For nearly nine hours, the House Financial Services Committee debated a measure (HR 2767) that would phase out Fannie Mae and Freddie Mac over five years and overhaul the Federal Housing Administration. The committee will reconvene at 9 a.m. Wednesday morning to take roll call votes on amendments and report the bill to the full House.
The House GOP proposal, which spans nearly 300 pages, would not establish any government guarantee for mortgages. Loans insured by the FHA, however, would receive government support. Chairman Jeb Hensarling, R-Texas, argued that it would make the U.S. economy less vulnerable to risk from the mortgage finance industry — particularly Fannie and Freddie.
Hensarling said that the legislation “will change a system where government controls 90 percent of the housing finance market, where Washington elites decide who can qualify for a mortgage, and where hardworking taxpayers who struggle to pay their own mortgages are forced to pay for somebody else’s while they are continually on the hook for $5 trillion in mortgage guarantees.”
We support this legislation as it would protect both homeowners and taxpayers.