The Great Secret Student Loan Reform

One of the bizarrely under-hyped benefits of the passage of health care reform (the reconciliation bill, to be exact) was the much-needed student loan reform package attached to it.

Basically, since the 1960s the federal government has been subsidizing and guaranteeing student loans made by private insurers like Sallie Mae. (The government also makes its own loans to students.) The risk on these private loans was borne entirely by the government; private insurers reaped all the profits. This is exactly as wasteful as it sounds, and reform will save us $61 billion over the next 10 years. Everyone wins.

Of course, the ideological champions of private industry (i.e. the affected banks and their stooges in Congress) are now crowing that these reforms will destroy higher education. Surprise surprise – they’re completely wrong.

Department of Untruths: “By definition, this is not middle of the road.”

You’re going to hear a lot of this in the next few weeks. Among the many, many disingenuous Republican talking points about the health care bill, perhaps the most facially absurd is that it’s some extreme leftist fantasy version of reform. The arguments in favor of this view — that a majority of Americans and zero Republican legislators support the bill – are misleading and tautological. Chait provides the ultimate debunking. His bottom line:

Obama is signing what was, until recently, a moderate Republican health care plan by every substantive comparison or definition. The unanimity of Republican opposition says more about Republicans than it does about the plan itself.

OH NO: Socialism Has Come To America

Or rather: Yay, it happened!

I’m not going to wade into the actual politics that led to health care reform’s passage — Yglesias and Chait do a fine job of that, and Bart Stupak is just so tiresome to think about, and really, Peggy Noonan, is “demon pass” the best you could come up with?

The noise is just noise, especially when there are practical consequences to think about. Soon everyone will have health insurance! And yes, while it is true that the whole nightmare debate isn’t quite over — the reconciliation bill, which, don’t let’s forget, improves the package, still has to tumble through the Senate — it is also true that the bill passed by the Senate in December will, with the President’s signature this week, become law. A huge part of American life will be improved by the stroke of a pen.

What I think is interesting is what can happen next. Can, not will. There are so many predictions and opinions, and all the pundits are so convinced of their right(eous)ness:

It’ll kill the Democrats in November! Think again! Major reforms always become popular over time! It’s poisoned our politics! We’ll repeal it! Good luck with that! Baby killer!

Shut up, all of you. (Especially the last.)

If there’s any advice I would give to a casual observer of this mess, it would be to turn off the TV, click “close tab” on everything except cat videos and your Netflix Instant Player, and reflect on the fact that half a century of work by progressives has finally paid off. That’s a long time, and anyone who thinks they can untangle the meaning of it in less than 24 hours is fooling themselves. 99% of what the pundits are saying today will be meaningless by tomorrow. They have no idea what they’re talking about! Remember when everyone was saying reform was dead after a moderate Republican beat a terrible Democratic party hack in a special election by a few hundred thousand people in a state that already had universal health insurance? Yeah, exactly.

So let’s all do ourselves a favor, take a step back, and if like me you think health care reform was a moral and historical imperative, gloat softly, to ourselves. Of course it’s difficult not to enjoy the hilarity of the Right’s meltdown. Feel free to do that too. (I mean, come on. You can’t make this stuff up.) But there’s still plenty of work to be done — on jobs, on the environment, on gay rights, on any number of problems America faces today. But we can cross this one off the list, for now, and that’s something.

One last point: if for some weird reason you’re interested in what the reform package actually does (and when), check out here, here and here. You’ll be surprised how banal socialism is when you get down to the details.

Paul Ryan Will Not Balance The Budget

Not only will Republican budget guru Paul Ryan’s proposed budget raise taxes on almost everyone, it will also not balance the budget — the one thing it was designed to do!

Here’s the problem. That Congressional Budget Office score that Ryan cites as proof? It doesn’t estimate how much revenue his plan would bring in based on his new tax regime. Because the CBO never scores changes to tax policy — that’s the job of the Joint Committee on Taxation — its score was based on a revenue number (19% of GDP) that came from…where? Oh, right: Paul Ryan. Where did he get that number? He made it up.

The Tax Policy Center, on the other hand, did score Ryan’s tax proposals. Would you be surprised if I told you Ryan’s figures are a steaming pile of bullshit? I didn’t think so:

Just for kicks, here’s the relevant portion of the Center for Budget and Policy Priorities’ takedown of the whole ugly thing:

Assertions that the Ryan plan is fiscally responsible rest on a serious misunderstanding of a Congressional Budget Office (CBO) analysis of the plan. CBO only partially analyzed the Ryan plan. Contrary to some media reports, CBO has not prepared an actual cost estimate of it. CBO generally does not produce estimates of the effects of proposed changes in tax policies; that is the responsibility of the Joint Committee on Taxation. In its analysis of the Ryan plan, CBO did not attempt to measure the revenue losses that Rep. Ryan’s proposals would generate.

Instead, as its report states, CBO simply used an assumption specified by Rep. Ryan’s staff that the overall level of revenues would remain unchanged from what the federal government would collect through 2030 under current policies, and would equal 19 percent of GDP in later years. CBO did not find that the Ryan plan actually would achieve these assumed revenue levels. (For commentary by Howard Gleckman of the Tax Policy Center on the widespread misunderstanding of the CBO analysis, see here.)

The reality is different; TPC finds that the Ryan plan would result in very large revenue losses relative to current policies. TPC estimates that even with its middle-class tax increases, the plan would reduce federal revenues to 16 percent of GDP in 2014. Because the tax cuts for the wealthy would dwarf the tax increases for the middle class, the Ryan plan would allow the federal debt to continue growing for a number of decades to come, despite its steep cuts in Medicare, Medicaid, and Social Security.

Disappointing, but not surprising. Honest Republicans are, after all, an endangered species.

Truth and Reconciliation

Following up on my last post, I’d just like to point out an excellent graphic the Times ran yesterday showing that, despite what the GOP would have you believe, use of budget reconciliation for major legislation is not even remotely uncommon.

Irreconcilable Differences

One of the more annoying tropes of the past few weeks, as it has become more and more likely that the Democrats will finally get their act together and inch past the goal line on health care reform, is the idea that budget reconciliation is somehow ”unprecedented” and “extreme” and ”jamming it through.”

This is bullshit, plain and simple. A few points:

First, it is, without question, not unprecedented. Even that dastardly Mainstream Media know this:

Second and more imporantly, the Democrats have already passed health care reform. All that’s left to do is find a way to reconcile (not exactly what “budget reconciliation” means, but we’ll get to that) the House and Senate bills. The difficulty is that since the Second Boston Massacre — WHICH CHANGED EVERYTHING DIDN’T YOU KNOW – the Democrats no longer have 60 votes in the Senate to pass an amended bill.

With the Senate GOP voting in lockstep against everything, the only way to get anything close to the (again, already-)passed bills to the President’s desk is for the House to pass the Senate’s bill. There are significant differences between the two, but the foundation is largely the same. What matters now is whether Pelosi and co. can get enough “no” votes to switch to “yes.” (And at least fewer “yes” votes to switch to “no.”) That is literally all that matters for health care to pass. Reconciliation is only a small part of the bargain between the House and the Senate to get that done.

If you watch CNN, however, you’ll see Mary Matalin, who is about as pleasant as bedbugs, drone on about how reconciliation is a travesty of democracy and will destroy the Democrats’ majority come November. Every other cable news network will carry another loathesome version of the same drivel. You’ll read more of this in the Washington Post and the Wall Street Journal and in a thousand witless posts on the Corner.

It’s all a big red herring.

Budget reconciliation, as I understand it, is just a patch for legislation that has already been approved. Because budget-related legislation is so complicated, involving so many committees, the budget reconciliation process allows policy changes to entitlements (such as MEDICARE) and tax laws to be passed in a streamlined, unfilibusterable way, to avoid total gridlock. After all, the federal government’s gotta have a budget, one way or another. If you’re really interested in the procedure, the House Rules Committee has a nicely dense summary.

In the case of health care reform, reconciliation will allow the Senate to appease House members’ concerns about things like affordability and the Medicare Part D “donut hole,” but not, since it’s not budget-related, things like the Stupak abortion language and the structure of the insurance exchanges. Still, still, still: all that matters is that the House pass the Senate bill.

The point is that reconciliation is the icing, not the cake. It doesn’t even actually have to happen for reform to pass. The worst fears of conservatives arrive earlier – health care reform is a few House votes away from becoming law. (I suspect the rumors of a smaller compromise bill are a political feint. Obama said as much yesterday.) The furor over reconciliation is merely a last-ditch effort on the part of Republicans to squeeze a little more political blood from the fight. They aim to tar Obama as a partisan, so they can run against him and his “socialized medicine” in the fall. Let them. Health care reform is too important, and too close, to be sacrificed on the altar of politics. The ineptitude of the Democrats over the past year has already guaranteed a bloody midterms. And the hubristic failure of Rove’s “permanent majority” should have Democrats realizing that huge majorities are unsustainable anyway.

Besides, if they don’t get health care reform passed, the Democrats are really screwed in November. They couldn’t be that stupid, could they?

The Road Ahead On HCR

I hope to have more original analysis in the next few days (before the Blair House summit), but in the meantime Jonathan Chait has a great, great post countering all the claims that health care reform is dead.

Update: More.

Quote of the Day

Here’s the President making a timely point on health care reform (emphasis mine):

At the Republican caucus, they held up—they said, we’ve got a plan; it’s going to provide everybody coverage at no cost. And I said, well, if that were true, why wouldn’t I take it? My wife Michelle thinks I’m stubborn sometimes, but I’m not that stubborn. Okay, let me think. I could have everybody get health care coverage that’s high quality, and it’s free, which I’ll bet is really popular. But I’m not going to do that. I’m going to go through the pain of really working through this hard process in Congress, getting yelled at and called a socialist, because I just — that’s how I roll. I’m a glutton for punishment. (Laughter.)

No, look, if this were easy and simple, first of all, somebody would have done it before. Seven Presidents have failed at this; seven Congresses have failed at this. If this was simple, it would have already been done. It’s not.

This much I know to be true: Americans don’t like complication. Which is part of why Obama, the former law professor, loathe to dumb things down, has trouble explaining policy to the American people in terms they can understand. Which is why I thought the State of the Union was mostly successful.

Mark Blumenthal, meanwhile, published a column this week that I think goes a long way towards explaining why Americans are generally against health care reform, until they know anything about it.

Why I Am Not A Conservative

A major topic of this blog since its inception has been the vacuous, uninformed nature of right-wing political discourse. I bemoan this fact because I believe in a robust dialogue, and as a temperament I believe conservatism has much to offer our politics. But what passes for conservatism these days is, in my opinion, a mostly content-free ideology. It’s nice to have this confirmed on my own blog.

A reader named Karl Keller has been commenting, quite passionately, on a few recent posts. I don’t know who Karl Keller is or anything about him, but since I want to take my readers’ dissents seriously, I thought his comments deserve a detailed response, which I try to make after the jump.

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The State of Our Union Is… Sassy!

The State of the Union is so overhyped. The speech rarely has any substantive political effect, and it’s important to remember that Obama’s first-year problem has not, depite the past month, been one of narrative. Matt Yglesias makes a great point today:

[W]hat we’ve learned time and again over the past year is that there’s only so far that great speeches get you. [...] Obama seized the mantle of responsibility, pragmatism, and seriousness while challenging the GOP to show some good faith and willingness to be a constructive partner in government. But what he’s never been able to do is to generate the kind of specific, concrete political pressure on incumbent Republican senators that inspires them to vote “yes” on his bills or confirm his nominees. And nothing in his speech changes that dynamic.

It wasn’t a great speech, but it didn’t need to be. No speech is every going to change Olympia Snowe’s vote, or make Lieberman less of an asshole. But what I saw, and what I think the American people saw, was a pissed-off President not afraid to call out his enemies. He’s angry, and so are we! It was a brilliant piece of performance art. Watching Boehner and Cantor smirk through Obama’s rousing defense of the stimulus and bailouts and tax cuts served as a reminder of the fact that the Republicans are simply refusing to legislate. They’re not doing their jobs, and they’re incredibly unpopular because of it! There’s a reason Obama is far more popular than anyone in Congress, and, pace Scott Brown, it’s decidedly not because Americans are against health care reform. The triumph of last night was the return of 2008 Obama, just when we need him.

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