article | May 08, 2007

For the first time in the post-Newt Gingrich, Tom Delay era of Washington politics, Democrats in Congress have to decide if they want to use their new majority status to play hardball. At stake is roughly $10 billion to $15 billion in student financial aid -- enough to send over 2 million kids to a state university tuition free.

Within the next ten days, Congress will decide whether to use a little understood, two-step parliamentary procedure that allows a simple majority to advance filibuster-proof legislation to the President for signature. There's disagreement within the Democratic Congressional majority as to whether to use it. Some Democratic Senators don't want to pervert the regular order process. Others in Congress are ready to roll the minority.

The Procedural Play

Step 1: Theoretically each year, Congress passes a Budget Resolution that guides future work of spending committees. The Budget Resolution needs only a majority vote in both chambers and is not signed by the President. It's not law; it simply governs Congressional procedures on tax and spending matters.

Step 2: A majority in Congress can include in its Budget Resolution "reconciliation" instructions that enable the United States Senate to advance tax or spending legislation without being subject to a filibuster. Historically, reconciliation has been employed only to reduce the budget deficit. But the reduction need only be a net figure. Spending could increase by $30 billion as long as revenues or offsetting spending cuts increase by at least $30 billion plus one dollar.

The Pros

With reconciliation, Senate Democrats, led by Health and Education Committee Chairman Senator Edward M. Kennedy, more easily could whack taxpayer subsidies to student loan banks like Sallie Mae and Nelnet and shift tens of billions in savings to increased financial aid for kids. They would need only a majority vote. Without reconciliation, Kennedy and his allies would have to compromise in order to pick up at least nine Senate Republican votes and beat a threatened filibuster. (Disclosure: Higher Ed Watch staff used to work for Kennedy) Compromising Senate Republicans will demand smaller cuts in student loan bank subsidies.

We at Higher Ed Watch peg the value of that compromise in the $10 billion to $15 billion range over five years. But it's just an educated guess based on how much President Bush recommended in student loan bank subsidy cuts in his budget, how much in cuts it has been leaked publicly that Kennedy has considered while working with Senate Republicans, and how much more it's possible to cut. No one knows for sure just how much compromising on bank subsidies will be required without reconciliation. No matter, you can be sure that billions and billions for banks and for kids and families are at stake.

The Cons

Originally and until recently, the special fast-track, "reconciliation" procedure was limited only for use in furtherance of reducing the budget deficit. But in 1996, the Republican Congressional majority agressively applied the filibuster-proof, reconciliation process to any legislation affecting the budget even if it would increase the deficit. The Republican Congressional majority sought to use it three times to allow for drilling in the Artic National Wildlife Preserve.

Most notably, the Republican Congressional majority used the reconciliation process to push through the massive Bush 2001 tax cut with a mere 50 votes. In fact, veteran Capitol Hill watchers will recall that in 2001, the Republican Majority went so far as to fire the Senate Parliamentarian, because he wouldn't approve use of the reconciliation process for the first Bush tax cut. He was replaced by the Republican Congressional majority with a new Parliamentarian who blessed the procedure.

In 2001, Democrats vigorously objected to the high-handed tactics. In fact, one dismayed Republican Senator even left the party immediately thereafter, prompting a switch in Senate control for two years. In 2004, Democrats waged an even more vigourous campaign in opposition to Republican majority attempts to end the filibuster for judicial nominations. And throughout the 2006 campaign cycle, in addition to opposition to the Iraq war, Democrats seized on abuse of power and allegation of corruption themes to regain their present, narrow Congressional majority status.

The Politics

Employing reconciliation for student loan reform risks the same 'abuse of power' charges being leveled against the new Congressional majority. On the other hand, not employing it sends a message to student loan banks that they can and should continue to line the campaign coffers of the Republican minority who will have power to protect them.

Regardless, the policy deliverable to pursuing the reconciliation process for student loan reform easily can be understated. Big numbers don't always translate to regular people. So to put $10 billion to $15 billion and the free tuition it could buy for over 2 million state university students into context, think of it this way. Imagine yourself at your favorite Major League Baseball team's stadium. Now imagine the park sold out. Put yourself in the stands looking out at a sea of seats filled and imagine every one of those seats filled by a student. Think of that picture. Now imagine every Major League Baseball stadium in the country with every seat filled with students. Do the same for every NBA stadium in the country and then add all them together. Every stadium, every seat filled. That's how many kids would go to college tuition-free at least for a year. That's over 2 million kids.

What Congressional Democrats generally want to do substantively on student financial aid is pretty clear. The bigger question is who they want to be and what they're willing to compromise.


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