TG's Legislative Report
For more information, contact:
TG Congressional and Legislative Relations
(512) 219-4503
P.O. Box 83100
Round Rock, TX 78683-3100
November 14, 2008
Congressional/Legislative Update
With the November 4th general election now history, we can begin to survey the political landscape in which the FFELP will be operating for, at least, the next two years.
The political environment will be very different from that of the past several years with a set of unprecedented challenges that will present new opportunities for "change".
However, what has been a "given" for a considerable time is that the 111th Congress, which convenes on January 3, 2009, was going to continue to have a Democratic majority. And, predictably, when the new Congress convenes, the majority in both the Senate and House of Representatives will have increased by as many as 9 Senators and 22 Representatives who are Democrats (60 and 258 from 51 and 236, respectively).
These are, for all intent and purposes, controlling majorities (when moderate Republicans are considered), which means that parliamentary tools for the minority to use in delaying the majority achieving its agenda will be less effective than in recent congresses.
For the new Administration, its agenda has been summarized in the 600 page Plan For Change: A Progressive Blueprint For the 44th President, largely compiled by John Podesta, the co-chair of the Obama transition team.
"[I]f the president and his administration do not take the time upfront to develop a clear and coherent blueprint for action — and find ways to move this agenda regardless of the environment — then they will quickly find the windows of opportunity shutting before their eyes and will face increased public frustration and disappointment," Podesta writes.
Speaking more broadly about policy priorities, Podesta identifies addressing the economic crisis as the "primary goal" of the new administration. "The new president must deal immediately with the global financial and mortgage crisis and focus long term on enhanced global trade, economic mobility for workers, and innovation and technological advancement."
Of course, as we all know, it is the legislative branch that makes the laws and the executive branch that executes the laws under the oversight of the legislative branch. Therefore, it will be the new Congress that will take the lead in setting the agenda and public priorities for the next two years with respect to the nature and size of the role of the federal government in all aspects of policymaking. And, both Speaker Pelosi and Majority Leader Reid have indicated that, in order to manage expectations raised during the campaign season, the 111th Congress will focus on quickly passing popular legislation to expand the Childrens' Health Insurance Program and provide federal funding for stem cell research (which had been passed and vetoed by the current Administration). Then move to pass economic stimulus, recovery, and job creation legislation, followed, possibly, by legislation to update the Social Security program.
All of this would be taking place against the background of a FY 2009 and FY 2010 budget process. The FY 2009 budget year began on October 1, 2008 and no current year appropriations bills have been passed and signed into law. So, the 111th Congress will have to pass two years' worth of appropriations bills.
The overriding issue that the new Congress will have to address and that will impact every legislative initiative undertaken will be the growth of the national debt ($5.1 trillion in 2001 to a projected $11 trillion by the end of FY2009) and a record annual budget deficit for FY2009 ($162 billion last year to a projected $750 to $1 trillion deficit for 2009), and their impact on a myriad of issues, including the economy, monetary, and fiscal policy, employment, ability to obtain credit, etc. This condition alone will cause policy considerations to be driven by the annual budget debate, probably beyond the 111th Congress.
The budget and worsening condition of the nation's financial and credit investment markets will also impact the congress' ability to engage in any new spending on programs promised during the election campaigns without borrowing even more money, or offsetting the new spending with spending reductions.
Another option, of course, is to identify opportunities to improve existing programs, making them more efficient and effective. And, it is this option that the FFELP will have to work towards.
For the FFELP, next year, there will undoubtedly be legislation introduced which may propose to, for example, require FFELP lenders to serve all eligible borrowers, include rehabilitated loans as eligible loans to be purchased by the Department, or, include further measures to address the FFELP liquidity issue.
There will also be proposals to restructure the federal student financial assistance and loan programs that will be forthcoming from the higher education community.
However, there is no indication that the role of the federal government in insuring access to low cost student loans will not be a continuing one.