Tag Archives: student loan rates

The Crisis Factory goes Dancing With the Debt Fetish

Marathon DancersOne of the little problems with the Politics of Hyperbole is that eventually someone may notice not every minor annoyance constitutes an emergency.  Not even every major issue is an emergency.  However, nothing has prevented the radicals from manufacturing crisis after crisis in order to monopolize the conversation and distract this country from some very real issues we need to address.

The Distractions

Pillar OnePeople are in imminent danger of becoming dependent upon government.   Hogwash. Only the most extreme social libertarian would contend that having police, fire, and emergency medical personnel creates “dependency,” and how foolish does a person have to be to argue that we don’t need public health inspectors?  Further, if we allow for the old saws that two “heads are better than one,” and “many hands make light work,” then we know there are many tasks at which we do much better when we work together: Building roads, dams and bridges; Conducting relations with foreign countries; Protecting our citizens from or responding to natural and man-made disasters; Promoting our national economy.  And the list goes on.  Or, to introduce yet another well known concept:

“No man is an island,
Entire of itself,
Every man is a piece of the continent,
A part of the main.
If a clod be washed away by the sea,
Europe is the less.
As well as if a promontory were.
As well as if a manor of thy friend’s
Or of thine own were:
Any man’s death diminishes me,
Because I am involved in mankind,
And therefore never send to know for whom the bell tolls;
It tolls for thee.” — John Donne (1572-1631)

Pillar Two: People are burdened by an unconscionable level of federal debt.   This argument is extremely convenient for those who have another agenda — cutting spending on domestic programs with which they are in fundamental disagreement.  The proposition requires adopting a variation on the White Queen’s belief in “six impossible things before breakfast.”

The United States is the most powerful nation, with the most powerful economy in the world.  China’s GDP is $8.227 trillion; U.S. GDP is $15.68 trillion.  Therefore, it is necessary to manufacture PERIL in order to substantiate the claims that we are burdened by indebtedness such that we cannot afford to (fill in the blank with the program one wishes to dismantle).   There are some real issues, just not the ones usually cited in the conservative press.  For example:

The Trifflin Dilemma Peril:  “He pointed out that the country whose currency, being the global reserve currency, foreign nations wish to hold, must be willing to supply the world with an extra supply of its currency to fulfill world demand for these foreign exchange reserves, and thus cause a trade deficit.”  Translation – The stronger the nation the more likely other nations are to want to invest in it, and the more other nations invest in it the more vulnerable the nation becomes to foreign influences on its economy.

A variation on the Trifflin Dilemma often shows up in the conservative media in the form of a new version of the old obnoxious  Yellow Peril argument — What if China called in its investments?  They could OWN us.  Instead of rewriting the posts, this topic has been discussed at more length in “The Republican Debt Wish” (2006), “Something to Think About,” (2008) and “When Willful Ignorance Meets Economic Reality,” (2011).

One one of the consequences of paying attention to the debt, as opposed to focusing on the economic growth which facilitates the repayment of those obligations, is dangerous in itself, as explained by Nobel Prize winning economist Joseph Stiglitz:

“The fundamental problem is not government debt. Over the past few years, the budget deficit has been caused by low growth. If we focus on growth, then we get growth, and our deficit will go down. If we just focus on the deficit, we’re not going to get anywhere.

This deficit fetishism is killing our economy. And you know what? This is linked to inequality. If we go into austerity, that will lead to higher unemployment and will increase inequality. Wages go down, aggregate demand goes down, wealth goes down.” [HuffPo]

Pillar Three: The free market will cure all ills.   When pressed to explain why, for example, the Affordable Care Act, is so onerous, the right is often moved to propose that the “free market” could have solved all the problems associated with health care insurance situation in the United States.

The first question we need to ask in regard to this contention is: Are we using the right tool from the box?  Consider your utensil drawer in the kitchen.  Does it contain at least one table knife, bent at the tip because it was pressed into service as a screw driver or as a lever?  Like the trusty table knife, the free market is an excellent tool for delivering the goods and services we require, but there are some tasks for which is it simply not the best implement to apply.

We could apply the free market to our transportation system by privatizing all our now public roads and charging tolls for their maintenance and use — however, we need to calculate the cost to our economy of raising costs for the factors in our transportation sector.  In this instance, the cost to the trucking industry is a negative factor in economic growth, and it is better policy to “subsidize” the industry by providing well maintained roads and functional bridges to secure the benefits of our economy.

Since we accept that corporations should operate for a profit, then in the realm of health care insurance it makes good free market sense for the company to insure only healthy persons (certainly not those with pre-existing medical conditions, or those who are elderly) and to keep those medical loss ratios at the lowest possible level.  In short, if we allow the free market to function in its purest form in the delivery of health care, then we should rationally expect that the least costly services will be provided, to those who need the least service.  Sometimes it’s really not about the money.

We can quantify the economic contribution of a father or mother in the family, but that doesn’t determine his or her value.  We don’t calculate a cost-benefit analysis in order to decide on marriage. We can quantify the economic contribution of roads, bridges, and airports, but that alone doesn’t determine their value to us.  We can quantify the benefits of education in terms of test scores, but we can’t determine how a person will synthesize information accumulated from the arts and from engineering to determine the best design for a marketable household appliance.

Focus Please

There are issues we need to address, most of which have profound implications for our economy. Among these are:

#1. Global climate change.  This isn’t “lib’rul hype;” this is about living on a planet capable of sustaining human life. Yes, if we foul our nest, the planet will probably last another 6 billion years, but WE won’t.   The 2007 University of Maryland study (pdf) projects economic impacts in terms of agriculture, energy, and transportation; in terms of our eco-system; and, in terms of water and infrastructure elements.   The fifth assessment from the IPCC released recently should convince all but the most delusional that WE are the problem.

The conservatives continue dancing with the Debt Fetish

#2. Student Loan Indebtedness.  If we’d really like to have young people start contributing to our economy, especially in regard to consumer spending, then it would be nice if they had more unencumbered income with which to do just that.  The Wall Street Journal calls the current situation the “Student Loan Straitjacket.”

The conservatives continue to dance with the Debt Fetish, but “What of the debt for our grandchildren?”  Flash Dispatch to the conservatives — These ARE our grandchildren.

#3. Infrastructure issues.  It isn’t like the American Society of Civil Engineers haven’t been trying to get our attention.  The National Report Card is not pleasant or reassuring reading — but it should be read, and we should be paying attention.

The conservatives continue to dance with the Debt Fetish.  How do we pay off any portion of the debt if our physical infrastructure is so dilapidated as to impede the progress of our distribution systems?

#4.  Employment. Of all the associated issues this is the most central.  We could be putting people in the construction sector back to work if we could enact funding for infrastructure projects.  We could be putting people to work in alternative energy projects… We could be putting people back to work in new jobs in new manufacturing sectors.  However, we are still dancing with the Debt Fetish…

…and like the marathon dancers of the Depression Era we will proceed having put a great deal of effort into endeavors promising very paltry results.


Filed under Economy, Politics

What can you get for under 6.8%?

What can you get for 6.8%?  That would be the rate for a student loan as of July 1, 2013.

As of July 7, 2013 rates for other kinds of loans are:

30 year fixed rate mortgage     4.40%

15  year fixed rate mortgage     3.45%

5/1 ARM                                             3.55%

30K FICO based home equity loan     5.19%

48 month new car loan                              2.57%

In fact the only thing worse than the student loan rate is the average rate for credit cards, at 15.27%.

Now, here’s some information from the Federal Reserve about what it costs for banks to use the “discount window:”

“Federal Reserve Banks have three main lending programs for depository institutions — primary credit, secondary credit and seasonal credit. Under the program enacted in 2003, Reserve Banks establish the primary credit rate at least every 14 days, subject to review and determination of the Board of Governors.

Primary Credit Rate: 0.75%Primary credit is available to generally sound depository institutions on a very short-term basis as a backup rather than a regular source of funding. Depository institutions are not required to seek alternative sources of funds before requesting advances of primary credit.

Secondary Credit Rate: 1.25%Secondary credit is extended on a very short-term basis to depository institutions not eligible for primary credit. It is available to meet backup liquidity needs when its use is consistent with a timely return to market sources of funding or the orderly resolution of a troubled institution.”

Now, what bank wouldn’t want to borrow at 0.75% to make student loans available at 6.8%?

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Filed under Economy, education, Uncategorized

It’s Friday. Do You Know Where Your Student Loan Rate Is?

Capitol DomeHello, today is Friday, June 28, 2013 and the Congress has shut down for the 4th of July Recess and Fund Raising Season.   What’s still on the picnic table? Student loan interest rates, which will double on Monday from 3.4% to 6.8%.

“Congress has a slim window for action following the July 4 recess, as the majority of student loans are made before the end of the summer. Democratic Sens. Kay Hagan (D-N.C.) and Jack Reed (D-R.I.) pitched a plan Thursday to extend the current rates by one year, giving the HELP committee time to revisit the issue later this year as part of a broader review of the Higher Education Act, which is due for reauthorization. The bill would pay for the reduced rates by closing a tax loophole on inherited individual retirement accounts and 401(k)s.” [Politico]

What happened to the previous plans?

There was S. 1003 sponsored by Senator Tom Coburn (R-OK) which tied student loan rates to the bond market:

“Comprehensive Student Loan Protection Act – Amends title IV (Student Assistance) of the Higher Education Act of 1965 to set the interest rate on Direct Loans, for any 12-month period beginning on July 1 and ending on June 30, at the bond equivalent rate of 10-year Treasury bills auctioned at the final auction held prior to such June 1, plus 3%.

Makes: (1) that formula applicable to Direct Loans first disbursed on or after July 1, 2013, and (2) the rate set on such loans applicable for the life of the loans.”

S. 1003 failed a cloture vote on June 6, 2013.  In fact, the bill which was co-sponsored by Senator Dean Heller (R-Nevada & the American Bankers Association) fell flat, securing only 40 votes in the Senate.

Now, why would five Republican Senators be supporting a bill to reduce the student loan rate? Possibly because it really doesn’t quite do the job.  Coburn’s bill would first change the nature of the interest rate for student loans from a fixed rate to a variable rate.  Remember all the interesting things that happened when mortgage originators shifted their emphasis from fixed rate to variable interest rate loans?

Under Coburn’s formula the fixed rate would become a variable rate which is left UNCAPPED.   Therefore, what banker wouldn’t love a guaranteed loan, which is all but impossible to discharge in bankruptcy, and which is Un-Capped over the life of the loan?  The NEA’s assessment summarizes the problem with Coburn’s “solution.”

“Based on Congressional Budget Office (CBO) estimates, students would be locked into rates above 8 percent by 2018. The additional revenue from higher rates on student loans would be used to reduce the deficit by $16 billion. Instead of protecting students from overcharges and unmanageable debt, the federal government would be balancing the budget on their backs. Low-income students struggling to pay the substantial costs of post-secondary education would be saddled with the greatest costs.”

We can get down into the weeds a bit further in the Congressional Research Services summary of the legislation:

“Under S. 1003, the interest rate in effect for the award year during which the loan is made would remain the same from the time the loan is disbursed until it is paid in full. On an annual basis, a new fixed interest rate would be established for loans to be made during the upcoming award year. The interest rate on Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans would be the 10-year Treasury Note rate, as of the last auction held prior to June 1, plus 3.0 percentage points. There would be no differentiation by loan type. Also, under S. 1003, there would be no cap on the maximum interest rate a borrower could be charged. Under this policy option, borrowers who obtain multiple loans over a period of successive years would typically have different fixed interest rates on loans made during different award years.”

Those who attempted to assert that the Coburn bill really wasn’t a variable rate program conveniently ignored the part in which borrowers who secured loans in successive years would have the interest rates predicated on the Treasury Note rate (plus 3%) as determined in the year the loan was made.  Even nicer for the financial sector — the system was made permanent.  Little wonder, the Big Banker’s Ally Senator Dean Heller found much to love in this proposal.

Senator Jack Reed’s bill from the Democratic side of the aisle, S. 953, also failed a cloture vote, 51-46 [vote 143].   Senator Reed’s bill was a two year extension of the 3.4% fixed rate student loan system, with no 3% add on, and a maximum cap of 6.8%.  A side by side comparison of the two measures brought to the Senate Floor could be shown as follows:

Student Loan bill comparisonAbout the only “good” news concerning the Republican version of the student loan bill is that it would be permanent — permanently favoring the financial sector and those who trade in student loans and their derivatives.

As we can certainly surmise, the Republican controlled House of Representatives has it’s version of a student loan rate bill, H.R. 1911, which includes:  (1) a market based variable rate; (2) based on the 10 year Treasury Note; (3) a 2.5% Add On; (4) and a maximum cap of 8.5%.   The House passed this version on May 23, 2013 on a party line vote, 221 to 198. [roll call 183]  Nevada Representatives Heck and Amodei voted in favor of the bill, Representatives Titus and Horsford voted “no.”

There are things a student loan rate bill should and should not contain if it is to be of benefit to middle and lower income students and their families; let’s concentrate on the positive.

There should be (1) a more or less permanent fix to the problem.  The interest rate should be (2)  fixed.  The only sector which benefits from variable interest rates are the bankers, definitely not the students and their families.  There should be (3) a minimal or zero add on.  These loans are guaranteed! They are all but impossible defaults! There is no logical reason for “adding on” anything except perhaps pure unadulterated greed.

It’s time for the Congress to do something about it’s 10% approval rating, and over-time in the student loan rate legislation debacle.  There is no more time for yet more legislation intended for the benefit of the Big Banks and the money shops which traffic in student loan paper.   We either want an educated workforce and are willing to invest in it or we aren’t.   And, it certainly isn’t time for Congress to take time out for its own fund raising while American families are trying to calculate how to raise the funds for their children’s education.

* For a full explication of all the recent bills related to student loan interest rates go to the Congressional Research Service’s June 5, 2013 report.  (pdf file)

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Filed under education, Heller

You Want A Scandal?

ScandalWhile the Villager Press inside the beltway gets all titillated over the IRS (which only denied the 501(c)4 application of one organization, a liberal group in Maine) and the AP (which might have revealed information about a CIA covert agent) and Benghazi, Benghazi, Benghazi… (oops the full emails show the CIA wanted to limit the amount of information about ops in the area?) there are some scandalous situations about which no one in the Cocktail Party Circuit appears to be getting all flustered…and outraged…and fulminatory about.   Let’s try on a few.


The Federal Reserve Discount Rate right now is 0.75%. [BankRate] So, banks can borrow money at 3/4th of a percent.  The current Stafford Student Loan Rate (in school) is 3.4% and the current Stafford Student Loan Rate (out of school) is 6.8%.  [BankRate]  We know, of course, that the banks don’t keep loans on their own books for the most part, and the student loans are really safe “paper” to package up into bonds, which in turn get sliced and diced into derivatives for the market traders to play with, creating a tidy $1 Trillion in total student indebtedness in this country. [WSJ]

We say we need more scientists, more engineers, more physicians, more nurses, more architects, and more computer engineers — but when it come down to helping students pay for the education necessary to pursue these degrees our next generation finds itself so saddled with student debt that basic life decisions — like finding housing, getting married, and paying the usual bills are swirled into the vortex of loan repayment.  The Federal Reserve Bank of New York posted this conclusion on April 17, 2013:

“Student loans have soared in popularity over the past decade, with the aggregate student loan balance, as measured in the FRBNY Consumer Credit Panel, reaching $966 billion at the end of 2012. Student debt now exceeds aggregate auto loan, credit card, and home-equity debt balances—making student loans the second largest debt of U.S. households, following mortgages. Student loans provide critical access to schooling, given the challenge presented by increasing costs of higher education and rising returns to a degree. Nevertheless, some have questioned how taking on extensive debt early in life has affected young workers’ post-schooling economic activity.”   […]

As seen in the chart below, the share of twenty-five-year-olds with student debt has increased from just 25 percent in 2003 to 43 percent in 2012. Further, the average student loan balance among those twenty-five-year-olds with student debt grew by 91 percent over the period, from $10,649 in 2003 to $20,326 in 2012. Student loan delinquencies have also been growing, as shown in the recent presentations by New York Fed economists Donghoon Lee and Wilbert van der Klaauw.

The number of student in debt has increased, the amount of the debt has increased, and so have the number of delinquencies.  And all the while the profitability of the banks (which we remember were bailed out with tax payer dollars) has continued unabated.  “Banks have been reporting steady growth in earnings since soon after the financial crisis. With the latest reports rolling in, analysts think the banks’ first-quarter profits will be their best ever.” [NYT 4/17/13]

Now isn’t that nice. The banks are getting “best ever” profits and the students are getting more deeply mired in debt.  Does this mean we have a Congress more concerned with the profitability of the banks than with the manageability of student debt, and the prospect of a nation in which fewer young people can afford to seek the educations which would boost their economic circumstances and enhance our national structure?  Meanwhile, it’s seemingly more important to give freshman Congress creatures an opportunity to repeal the Affordable Care Act — for the 37th time — than it is to conduct hearings and draft legislation to address the Student Loan Scandal.   Perhaps if we start calling the situation a “scandal” some attention might be brought to the subject?  Senator Elizabeth Warren (D-MA) has a bill on the Senate side to offer a bit of relief, which by some lights doesn’t go far enough, but at least someone is paying attention.

Military Sexual Assaults

There are approximately 1.4 million people serving in the U.S. Armed Forces, and the Pentagon reports there have been some 26,000 cases of sexual assault.  This isn’t a “women’s problem.” This is a military culture problem.  This is a legal problem.    Even the distribution of a motion picture on the subject (The Invisible War) hasn’t raised the Scandal Flag amongst the Village Media.  A Senate Armed Services Subcommittee has held one hearing — March 13, 2013. [SASC]   On the other side of the building House Armed Services chairman Buck McKeown  “said he was outraged and disgusted by the Fort Hood allegations.” [CNN]  As well he should be — so now where are the umpteen hearings on sexual assaults in the military?  Generally, when the term “sex” is combined with an issue — infidelity, crime, or whatever — the resulting phrase is Sex Scandal.  Why not this time?  Oh, yes, wait — the House is still voting to repeal the Affordable Care Act for the 37th time, and there will be more hearings on Benghazi…

This could go on … isn’t it scandalous we’re reducing the federal budget deficit … “The federal deficit is shrinking more quickly than expected, and the government’s long-term debt has largely stabilized for the next decade, the Congressional Budget Office said Tuesday in a report…” [LAT] BUT there’s a House bill which would further reduce funding for SNAP and nutrition programs, Meals on Wheels is sharply curtailing services to the elderly, and the Mysterious Chargemaster continues to make hospitalization bills inexplicable, opaque, and unfathomable…but these haven’t risen to the level of “Scandal” in the Washington, D.C. media.

And, then there’s the polling indicating that some 91% of the American people thought there ought to be expanded background checks to mitigate the prospects that an insane person, a felon, a fugitive, an undocumented person, or a juvenile could get hold of lethal weapons … and the Senate Republicans filibustered the bill…

For information about these issues we’re better off looking to local reporters who write about local children going hungry, or local seniors unserved, or local hospital rates, or local gun violence tragedies …. Perhaps if a crowd of  senior citizens picketed a military installation (or a couple of banks) clad like the current on-sale portrait of the late great  Bea Arthur, and packed AR-15s for show while waving their empty plates and their grandkids’ student loan papers … could we get some attention here?  And, while we’re at it — Where are the JOBS bills?

Would THAT be a scandal?

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Filed under education, media, Politics

Student Loan Rates Will Double So GOP Can Protect Top 0.5%?

The deadline’s looming and this is what we get from Senator Dean Heller (R-NV):  “Instead of compromising, the Democrats want to raise taxes on small business at a time when we need jobs,” Nevada Sen. Dean Heller said of the Democrats’ plan last month, calling their insistence on their bill “further proof that Washington is broken.”  [LVSun](emphasis added) Note the “small business” insertion.  It’s required in all GOP utterances about taxation.

What’s on the table?  “Take the student loans debate. In the past month, Senate Democrats lost a vote on their bill to offset the $6 billion cost of keeping student loan interest rates at 3.4 percent by closing a tax loophole on hedge funds. Senate Republicans lost a vote on their bill to offset it by stripping money from a health care prevention fund.” [LVSun] (emphasis added)

Now, go back and substitute “hedge funds” for “small business” and you will have the drift of the Republican argument.  It is better to allow student loans rates to double to 6.8% than it is to close a tax loophole on hedge funds.

This raises some questions about the core message of the Republicans, Senator Heller included.

#1.  What is a Small Business?  “… what Congressional Republicans Define as “Small Businesses” are Predominately Millionaires and Billionaires, Corporate Law Partners, Hedge Fund Managers. Congressional Republicans define as small businesses any individual who receives “small business income”.” [Wh]  OK, so what is “Small Business Income?

Back in August 2011 the OTA attempted to define what constitutes a small business for tax purposes (pdf).   The OTA suggests that previous definitions are overly generous:

“Although “small business owners” are often the subject of tax policy debate, a consensus does not exist regarding the specific attributes that distinguish small businesses from other firms. Previously, the Office of Tax Analysis had counted a small business owner as any individual who receives flow-through income from a sole proprietorship, partnership, S corporation, farming operation or miscellaneous rental activity. This overly broad definition was used because, for the majority of flow-through business income (partnerships and S corporations), it was not possible to trace income from the business entity to the respective owner(s). Due to newly accessible tax data, this technical constraint has been overcome.” [OTA pdf]  (emphasis added)

Notice that the old definition classified a small business person as ANYONE receiving flow through income from just about anywhere.  Major money makers took full advantage of this rather loose categorization.

Over half of the 400 Highest Earners in the United States Would Be “Small Businesses”: According to IRS data, in 2009, among the 400 taxpayers with the highest adjusted gross income – group that averages over $200 million each in taxable income – at least 237 would have qualified as “small businesses” under this definition. [Wh]

How nice for them, because these “small business persons” are NOT necessarily the butcher, the baker, the candlestick maker, the auto parts dealer, the retail grocery owner, the furniture store owner, the beauty shop proprietor, the catering service, the garage owner, or the corner bodega shop keeper.

If we count absolutely ANYONE who gets income from S corporations, proprietorships, and partnerships, then each and every member of a law firm’s partnership is categorized as a small business person, including the lobby shops in Washington, D.C.  Each and every partner in a hedge fund is categorized as a small business person. Each and every individual getting passive investment income is a small business person.

The definition of a small business is problematic, but even suggestions that accounting treatments be changed brings howls of “tax increases” to “job creators” from the Republican side of the aisle.  During the last big debate on student loan rate reductions:

“…the Republicans would not accept the Senate Democrats’ proposal to pay for a one-year extension by changing a law that allows some wealthy taxpayers to avoid paying Social Security and Medicare taxes by classifying their pay as dividends, not cash income.”  [NYT]

This is nice work if you can get it.  You are a “small business” if ANY of your income passes through from passive investments, hedge funds, law firms, and lobby shops.  AND for the wealthiest among us you get to avoid paying payroll taxes by classifying earnings as dividends and not cash income.

#2.  Exactly what “small businesses” would have be affected by S. 2343? Here’s the loophole the Democratic leadership was trying to close:

Amends the Internal Revenue Code and title II (Old Age, Survivors and Disability Insurance) of the Social Security Act to require certain shareholders of a subchapter S corporation engaged as a partner in a professional service business to include income or loss attributable to such business in their net earnings from self-employment for employment tax purposes.

Restricts such tax treatment to shareholders whose modified adjusted gross income exceeds a specified amount that varies based on their tax filing status.

Defines a “professional service business” as any trade or business providing services in the fields of health, law, lobbying, engineering, architecture, accounting, actuarial science, performing arts, consulting, athletics, investment advice or management, or brokerage services.  [Thomas]

The loophole would be closed for anyone earning over at least $250,000 AGI from a proprietorship, S corporation, or partnership.  [Thomas]

To get an idea of just how few people would be discomfited by this change in accounting treatment, note that the average annual earnings for a  medical practice is about $158,000.  Average mean annual earnings range from about $154,000 to $199,860.  [BLS]

The Bureau of Labor Statistics reports that the average earnings for members of the legal profession range from $75,350 annually for lawyers working with insurance carriers  to $199,850 for lawyers in the energy sector.  Architects and engineers may expect to see a range of annual earnings from about $73,000 annually up to approximately $105,000. [BLS] Salaries for accountants range from $40,000 to about $110,000 annually. [BLS] For all the brouhaha about over-paid athletes, most professionals can expect to earn about $79,830 annually. [BLS]  The annual mean earnings for farm and ranch operations comes in at approximately $70,000 [BLS]

So, what small businesses are  Senator Heller and his Republican cohorts so diligently protecting?    The average sports agent is taking in about $92,500.  The average personal financial adviser earns $90,900.  The average chief executive officer earns about $176,550.  [BLS] The majority of those people engaged in the specific occupational fields set forth in the terms of S. 2343 would not be affected at all by the changing accounting treatment.

When it all boils out, what’s left is the notion that the top 0.5% must be assuaged, even if the sons and daughters of most health care professionals, most lawyers, most architects, engineers, and accountants, most sports agents, and most management consultants pay double the current rate on their Stafford Student loans.

Thus, to the farmer, the rancher, the architect, the lawyer, the physician, the accountant, the agent, the engineer, the broker, the financial adviser, and the management consultant…. and to the artist, baker, clothing shop owner, computer specialist, landscape company proprietor, right on to the veterinarian and the zoologist…. Senator Heller’s message is clear.

It is more important that the ultra-rich be protected than it is for your son or daughter to find an affordable student loan.

Oh, wait, the Republican did offer another solution — just drop the preventative health care funding from the Affordable Care Act.   Stripping funding for cancer screenings, anti-obesity programs, and health care awareness for youngsters didn’t seem very popular, so now the GOP has come back with “tweaks” to the FY 13 budget for offsets.   These would include requiring federal employees to contribute 1.2% more to their own retirement funds, a revision of Medicaid taxes, auditing Social Security overpayments, and changing the timeline for the accrual of student loan interest.    The Republican wrote to the President, Senator Tom Harkin (D-IA) responded: “…if Republicans were really serious about negotiating a plan to pay for the bill, they would be meeting with Democrats on the Hill, not writing letters to the president.”  [USN]  Harkin also added that there was no way the Tweaks added up to a real solution.

And, what’s really interesting —  is that in the past there was Republican support for closing the very loophole the Democrats are now suggesting. [USN]  How do we spell O b s t r u c t i o n i s m?

You may never know what results come of your action, but if you do nothing there will be no result.”  Gandhi.

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Filed under Heller, Politics, Student Loans