October 2, 2006

• Congressional Update

---

Congressional Update

"Politics is the art of looking for trouble, finding it whether it exists or not, diagnosing it incorrectly, and applying the wrong remedy".
    - Ernest Benn

"The more you read and observe Politics, you got to admit that each party is worse than the other and the one that's out always looks the best."
    - Will Rogers

---

Now that the 109th Congress is in its final throes and has recessed until after the November 7th elections, to return in a ten day lame duck session during the second week of November to wrap up the FY 2007 appropriations process, it might be worthwhile to consider the Congressional landscape generally and specifically on how various factors may impact the HEA reauthorization and student loan programs.

First and foremost, the reauthorization of the HEA has been considered intermittently since 2003 in an environment that is preoccupied with budget issues, increasing annual deficits, increasing federal debt, reductions in domestic spending and entitlement spending, increasing budget demand for national security spending and congressional policy choices that emphasize national security over education, health, and human service spending.

In other words, higher education policy is, unfortunately, now being influenced by congressional budget choices and priorities that are driven more than ever by financial and budgetary concerns. For example, the needs of a budget reconciliation bill, i.e., the House Education and Workforce Committee's directive to achieve a $12 billion savings through the programs under its purview controlled the reauthorization of the student loan programs rather than the opportunity to make improvements in the programs. For discretionary programs, an appropriation increase for a program can only be increased if the increase is offset with a decrease in another program.

The major national polls (Zogby, Rasmussen, Gallup, Cook, Rothenberg) show a much slimmer majority in the U.S. House and Senate in next year's 110th Congress. The majority may be Democratic or Republican, but, in either case, the majorities will most likely be smaller that the current fifteen seat in the House and ten seats in the Senate. Of course, with six weeks left until Election Day, any unexpected occurrence, e.g., invasion of Iran could significantly sway the vote dramatically either way.

If this is the outcome of this fall's elections, this means that it will be difficult for the initial session of the 110th Congress to pass legislation unless the moderate factions of both parties can act together. In other words, forcing legislation through the House based on party-line votes, as has been the case for the past several years, will not be possible.

The 110th Congress will have the familiar issues to consider during its busy and short First Session. The 2008 presidential and congressional elections will make for an even more contentious and partisan environment than the current environment. Immigration reform, budget reform, lobby reform, tax reform, issues related to the "war on terror", and FY 2008 appropriations will roll over to the 110th Congress. A new issue may develop in a Democratic majority House in which the Judiciary Committee proceeds with investigatory hearings into the Iraq war and related issues.

If the Democrats gain the majority of seats in the House, current Democratic Minority Leader Nancy Pelosi will become House Speaker, current Minority Whip Steny Hoyer will probably become Majority Leader, and current Caucus Chair, James Clyburn will probably become Majority Whip. Current committee Ranking Members will, for the most part become committee chairs. Their proposed agenda for the next Congress has been published and is available at www.democraticleader.house.gov.

However, the Republican leadership spots, e.g., Minority Leader, Minority Whip, etc., will, in all likelihood will be filled by Members of the Republican Study Committee (RSC), which consists of the 105 most conservative House Republican House Members who will blame the loss of the House majority on the failure of the current Republican leadership to continue the budget reconciliation process in order to get "entitlement spending under control". Their ideas on ways to achieve further savings are published in the RSC's Contract with America Renewed. This group will push hard for spending reductions in discretionary and mandatory spending.

Keep in mind, no House or Senate Democrat voted for the Deficit Reduction Act/Higher Education Reconciliation Act. All of the changes made to the FFELP and FDLP during the past five years have been made under a Republican Administration and Republican Congress with the backing of the Office of Management and Budget (OMB) and its findings through its Program Assessment Rating Tool (PART) and Congressional Budget Office (CBO).

One slot that is fairly assured under a Democratic majority House is the chairmanship of the Education and Workforce Committee. The new chair would be George Miller from California.

The Republican Ranking Member of the Committee would be Thomas Petri (R-WI), the strongest proponent for the FDLP, and the program's original sponsor in 1992, and STAR Act in the House.

This is significant because included in the planned platform published by the House and Senate Democratic caucuses on which the 110th Congress would focus-lobby reform, homeland security, energy independence, economic prosperity and educational excellence, healthcare reform, and retirement security — S 2573/HR 5150 (Reverse the Raid on Student Aid), S 3255 (The Student Loan Borrower Bill of Rights), and S 3593 (The Student Debt Relief Act) — are included under the Boosting College Opportunity and Affordability plank.

Representative Miller is the House sponsor of HR 5150 which currently has 61 cosponsors and will introduce House companion bills for the other two Senate bills.

These bills propose to:

• repeal changes made to the federal student loan programs enacted and implemented by this year's Higher Education Reconciliation Act;
• increase authorized and actual funding for the Pell Grant program enough to achieve an annual maximum grant of $5,100 in 2007, increasing to $6,300 in 2011;
• enact the Student Aid Reward (STAR) Act;
• reduce the subsidized student loan interest rate to 3.4 percent and the PLUS interest rate to 4.25 percent;
• index monthly student loan repayments to borrower's income level and cap payments at 15 percent of borrower's income;
• increase transparency of the student loan process;
• reduce collection fees on student loans charged to borrowers; and,
• extend and expand the college tuition tax education.

The proposals are paid for by a combination of implementation of the STAR Act and other proposed savings as estimated by the White House's Office of Management and Budget and the Congressional Budget Office.

The findings and recommendations included in the Advisory Committee on Student Financial Assistance's latest study Mortgaging Our Future and the Secretary of Education's Commission on the Future of Higher Education final report A Test of Leadership will also play a role in next year's HEA reauthorization.

Back to Top

For more information, contact:

TG Congressional and Legislative Relations
(512) 219-4503
P.O. Box 83100
Round Rock, TX 78683-3100