The Last Obscenity: Will the Bank Lobby Succeed in Screwing Poor Kids?

It is, as President Obama stated, a "no-brainer." Cut the $90 billion in subsides that go to banks to make risk-free student loans that are GUARANTEED BY THE GOVERNMENT, go to direct lending, and use the money saved to increase Pell grants and tuition tax credits for working families so more poor kids can afford college. $90 billion over 10 years isn't bubkas.

The banks, of course, mobilized to save their subsidy. Republicans, led by Sarah Palin, denounced the "government takeover." But shoveling out an extra $90 billion to private banks to make risk free loans that the government guarantees isn't exactly the free market. This is the most egregious form of crony predatory capitalism that Adam Smith would condemn.

So the bill passed the House easily. And it was put in reconciliation instructions in the Senate—so it only needs 50 votes. Piece of cake.

So the banks enlisted big-time Democratic lobbyists and spent millions. They mobilized employees to pressure senators, arguing that they would lose their jobs. (Actually most of the jobs would still be there as the loans would continue. It is just the subsidies to bank profits that would eliminated.)

Now six senators—WHO SHOULD HEAR FROM YOU—have announced their opposition to voting on the student loan package in the reconciliation bill:

• Blanche Lincoln of Arkansas (no surprise there)
• Ben Nelson of Nebraska
• Bill Nelson of Florida
• Thomas Carper of Delaware
• Mark Warner of Virginia (so much for New Dems)
• Jim Webb of Virginia

What do six senators matter when we only need 50 votes? Because health care needs every vote it can get to pass the "fix" in reconciliation. If a couple of these folks say they won't vote for reconciliation if student loans are in the bill, the leadership, desperate to get health care done, will drop student loans.

This will be the final obscenity: The bank lobby so strong and the Democrats so weak that even a "no-brainer" taking unearned subsidies from banks and giving them to poor kids can't pass.

Despair for the Republic. This, folks, is simply ugly.

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