Blue Dog Democrats Endorse Balanced Budget Amendment That Would Double Unemployment, Gut Social Safety Net

By Travis Waldron/Think Progress

Congressional Republicans are still trying to persuade Americans that they are focused on job creation, but each time they propose another piece of legislation, it is exposed as a gimmick that will do little, if anything, to create jobs. Such was the case with their anti-regulatory policies, their attempts to repeal health care reform, and virtuallyevery other policy proposal they have brought forth.

Next up in that line, unfortunately, is a rehashed form of a radical Balanced Budget Amendment, a plan that according to recent analyses would actually cost America 15 million jobs. But thanks to the conservative wing of the Democratic Party, the Republicans won’t be alone in their chase for a radical budget amendment that could help push the country back into the throes of recession.

Despite the fact that House Minority Whip Steny Hoyer (D-MD) said yesterday he would encourage his party to vote against the radical plan, Blue Dog Democrats endorsed the amendment on a press call today, Politico’s Marin Cogan reported on Twitter. ThinkProgress confirmed that endorsement with a spokesperson for Rep. Mike Ross (D-AR), the Blue Dog Coalition’s co-chair for communications. According to the Hill, Ross said on the call that Blue Dogs favored such an amendment “before balanced budget amendments were cool”:

“We were advancing a balanced budget amendment when balanced budget amendments weren’t cool,” a co-chairman of the coalition, Rep. Mike Ross (D-Ark.), told reporters on a conference call. [...]

“If any Blue Dog does not vote for it, I’d have to question how much they’re a Blue Dog,” [Blue Dog Rep. Jim] Matheson [D-UT] said.

It’s hard to overestimate the negative effects such an amendment would have on the country’s economy. In addition to destroying millions of jobs, it would force such massive spending cuts that House Republicans’ own budget would be unconstitutional. According to a recent study by Macroeconomic Advisers, enacting a BBA now would double the nation’s unemployment rateand cause the economy to shrink by 17 percent — a far cry from the 2 percent projected growth that would occur with no such amendment.

Unfortunately, according to another analysis by the Center on Budget and Policy Priorities, theconsequences get worse. The draconian budget cuts caused by a Balanced Budget Amendment would forice lawmakers to gut Medicare, Medicaid, Social Security, and the Children’s Health Insurance Program (CHIP), among other programs, the analysis found:

“The constitutional balanced budget amendment that the House is expected to consider this week could force Congress to cut all programs by an average of 17.3 percent by 2018.

“If revenues are not raised (the House-passed budget resolution assumes no increase above current-policy levels) and all programs are cut by the same percentage, Social Security would be cut $184 billion in 2018 alone and almost $1.2 trillion through 2021; Medicare would be cut $117 billion in 2018 and about $750 billion through 2021; and Medicaid and the Children’s Health Insurance Program (CHIP) would be cut $80 billion in 2018 and about $500 billion through 2021.”

In order to preserve those programs, Congress would have to cut ridiculously deep into every other program. Yesterday, economists around the country warned Congress that enacting widespread budget cuts and other austerity measures now would have perilous consequences for the American economy, pushing the country to the brink of a second deep recession. Today, unfortunately, Blue Dog Democrats decided not only to ignore those warnings, but to endorse an even bigger, deeper austerity plan.

Six Democrats Side With Banks, Ask For ‘Alternative’ To Landmark Student Lending Reform

By Zaid Jilani One of the greatest hardships facing America’s college students is student debt; the average student in the class of 2008 graduated with $23,000 of debt, “a figure 25 percent higher than what their older brothers and sisters owed when they graduated from college in 2004.”

To tackle this student debt crisis, last year the House of Representatives passed the Student Aid and Fiscal Responsibility Act (SAFRA), which expands and improves successful student aid programs like the Pell Grant and the Perkins Loan program, and eliminates billions of dollars in subsidies to wasteful private lenders by arranging loans directly with students instead of through bank middlemen.

The Senate is currently deliberating over its own version of the bill, and it is one Senate floor vote away from being signed into law by the President. However, the student lending industry has launched an “aggressive lobbying campaign” of senators representing states where big lenders are based, scaremongering about job losses resulting from passing SAFRA. Now, it appears that their lobbying is paying off, as six Democratic senators have written to Sen. Tom Harkin (D-IA), chairman of the Senate Health, Education, Labor and Pensions Committee, asking him to “consider potential alternative legislative proposals” to SAFRA’s major lending reforms:

Six Democrats signaled deep concerns with their chamber’s student lending reform bill on Tuesday, imploring party leaders to “consider potential alternative legislative proposals” in the coming days.

That could spell trouble for Sen. Tom Harkin (D-Iowa), the chairman of the Senate Health, Education, Labor and Pensions Committee, and other Democratic leaders, who once hoped to advance the Student Aid and Fiscal Responsibility Act to the president’s desk using the chamber’s 50-vote reconciliation process.

In a brief letter dated Tuesday, Democratic Sens. Bill Nelson (Fl.), Tom Carper (Del.), Blanche Lincoln (Ark.), Jim Webb (Va.), Mark Warner (Va.) and Ben Nelson (Neb.) describe reform to the country’s “higher education funding” system as a “priority.” But the group…also express concerns the Senate’s lending bill could ultimately result in local job loss.

While the senators may be claiming that passing SAFRA would result in job losses in their states, the truth is that it would be minimal at worst. The fact is that only 30,000 people at most are employed in the student lending industry. And because the companies would still be in charge of servicing all the government issued loans, servicing jobs could actually increase. For example, “Nelnet (Ben Nelson’s biggest donor) saw their servicing revenues [increase] 13% in 2009 as a result of a contract they won to service student loans for the Department of Education.”

One way to avoid a filibuster by Republicans and lender-friendly Democrats is to pass SAFRA with the health care legislation in one reconciliation bill. The Hill reports that “a Democratic official familiar with negotiations” over the student lending bill has told them that the leadership has already decided to “pair [the] overhaul of student lending with healthcare reform,” although Senate Majority Leader Harry Reid’s (D-NV) office says “no final decision has been made.” Using reconciliation for a major education reform bill would hardly be without precedent. In 2007, the Senate passed the College Cost Reduction Act of 2007 through the reconciliation process by an overwhelmingly bipartisan vote of 79-12.

Why Is Nelson OK With Using Reconciliation For Tax Cuts For Millionaires But Not For Health Care For Americans?

By Zaid Jilani Following the election of Sen. Scott Brown (D-MA) in the Massachussetts special election, Democrats have been discussing ways to pass a comprehensive health care bill that will not be killed by a GOP-led filibuster. One idea that has been floated is for the House to pass the Senate’s health care bill and also immediately amend the bill to make it more progressive and acceptable to members in the House via a reconciliation bill, which requires only a simple majority vote in the Senate to pass.

Sen. Ben Nelson (D-NE) rejected this path, telling the Politico that he does not support the reconciliation process and that the health care bill should be broken up and voted on “a piece at a time, as opposed to a comprehensive approach.” He explained, “We’ve tried a comprehensive approach and it’s clear that it won’t be possible.” While Nelson rules reconciliation out of the question for health care, he was singing a different tune in the past. The Nebraska senator has voted in favor of four of the five bills passed through reconciliation since he came to office in 2001, including Bush’s tax cuts for the super-wealthy:

– Nelson voted to use reconciliation to pass Bush’s 2001 tax cuts for the wealthy. The senator was one of twelve Democrats who voted for the $1.3 trillion in tax cuts contained in the Economic Growth and Tax Relief Reconciliation Act of 2001, which included billions of dollars of tax cuts for the super-wealthy. [5/26/2001]

– Nelson voted to use reconciliation to pass Bush’s follow-up tax cuts for the wealthy in 2003. The senator was one of only two Democrats who voted for the The Jobs and Growth Tax Relief Reconciliation Act of 2003, which contained an additional $330 billion in tax cuts. The tax cuts would not have passed without Nelson’s vote. [5/23/2003]

– Nelson voted to use reconciliation to pass an extension of the reduced tax rates on capital gains. The senator was one of three Democrats to vote to shield wealthy investors from an increase in their capital gains tax with a vote in the affirmative for the Tax Increase Prevention and Reconciliation Act of 2005 . [5/11/2006]

– Nelson voted to use reconciliation to pass a bill helping students afford college tuition. The senator joined the rest of the Democratic caucus to vote for the College Cost Reduction Act of 2007 [9/7/2007]

Given the fact that three out of four of the reconciliation bills Nelson has supported mostly benefited the wealthiest Americans, the logical question to ask is why the reconciliation process he has supported in the past is apparently appropriate for siphoning wealth to the richest Americans but not to get health care for tens of millions of Americans who lack it.

Update Sens. Bayh (D-IN) and Lincoln (D-AR) have also said they are against reconciliation. Lincoln has previously voted for a reconciliation bill that gave massive tax cuts for the wealthy, while Bayh voted for the College Cost Reduction Act of 2007, which was passed via reconciliation. M.C.L. Comment: I've been telling people since the start of this debate while President Obama should have been more vocal on his signature issue health care, you got these corporate Democrats who are looking out for their own best interest.. Remember folks Democrats aren't like the Republicans when it come to loyalty, no matter how crappy and how toxic Bush policies were the Republicans got in front of a camera and carry water for the policy Bush was pushing. Democrats on the other hand think about what ways not to piss off the mythical middle of the road voter, so they run away from their leader and let him to fight off the right wing by himself.