Tying student aid to health care

TYING STUDENT AID TO HEALTH CARE…. It didn’t come into play in earnest until this week, but a move is underway to tie together two of the Democrats’ top legislative priorities into one reform package.

Health care reform, obviously, is still pending, and policymakers are working on a reconciliation fix to improve the bill and send it to the Senate for an up-or-down vote. But policymakers also began working this week on expanding the scope of the reconciliation measure, and adding the Student Aid and Fiscal Responsibility Act (SAFRA) to the language.

SAFRA, of course, would save tens of billions of dollars, ending government subsidies to the student-loan industry and streamlining the loan process, as well as greatly expanding the Pell grant program for low-income students. The House has already passed the measure, but it faces a bleak future in the Senate.

But, Dems figured, if they’re already working on budget fixes, and they want to make it impossible for Republicans to block a vote on the student-aid bill, why not tie SAFRA to health care and let them both pass by majority-rule?

On Wednesday, the approach was in trouble. Yesterday, things were looking up, and the prospects of bundling the two reform packages were improving.

Democratic Congressional leaders struck a tentative agreement on Thursday that breathes new life into President Obama’s proposed overhaul of federal student loan programs. […]

“Families and students who rely on federal student aid need to know that Congress sides with them and not with the big banks,” Senator Tom Harkin, Democrat of Iowa and chairman of the Education Committee, said at a news conference on Thursday. “The federal government has been subsidizing these banks and wasting taxpayer money for far too long. It’s time to end it.”

This would have considerable ripple effects, all of them good. House Dems, for example, have heartily endorsed SAFRA, and if it’s part of the health care package, they’re more likely to vote for it. Senate Dems would lose several center-right votes — Ben Nelson and others are deeply sympathetic to banks’ opposition to student-loan reform — but since the measure could pass with 51 votes, the majority has a fair amount of wiggle room.

It’s not a done deal, but yesterday offered considerable progress, and the WaPo described the bundle approach as having “new momentum.” Senate Budget Committee Chairman Kent Conrad (D-N.D.), who had initially balked at the idea, conceded, “I’d say yes, we’re leaning toward it.”

White House Chief of Staff Rahm Emanuel, who also supports tying the two measures together, added, “We’re getting close.”

Keep in mind, if Dems continue to move forward on this front, the health care package will now also run into intense opposition from bank lobbyists, on top of the pressure from health insurance lobbyists. But if Democrats can deliver, it would be a tremendous accomplishment.