Government to Take-Over Student Loans Too

Summary of the Act: Summary at Thomas

Rep. Steve Kagen voted Aye to support the Student Aid and Fiscal Responsibility Act of 2009
http://www.govtrack.us/congress/bill.xpd?bill=h111-3221

Representative Paul Ryan's comments on the House floor:

Rep. Paul Ryan [R-WI1]: I thank the chairman.

Madam Chairman, I rise in opposition to this bill. Let me be clear: I support education. It's an indispensable component of America's prosperity. I don't find fault with Pell Grants or student loans. What I find fault with is the way that the math doesn't add up in this bill.

This bill includes a sleight of hand in so many ways that it either raises the deficit by $5.7 billion or by as much as $39 billion. It creates 10 new entitlement programs that will dramatically increase spending over the next 10 years, and it adds to our already alarming levels of borrowing. Let me try and explain what's going on with respect to how the budget gimmicks are employed here.

First off, the bill claims to reduce mandatory spending by $7.8 billion and dedicates that savings to deficit reduction; but through this budget gimmick, the bill shifts $13.5 billion in necessary program administrative costs over to the discretionary category where it cannot be counted by the Congressional Budget Office. With this gimmick removed, the bill actually increases the deficit by $5.7 billion. That's the smallest budget gimmick in this bill.

The second largest budget gimmick in this bill is the way that it is scored, not using the kind of scoring that we use for such things like when we scored Fannie and Freddie or the TARP, where we used risk-adjustment scoring under the credit reform rules. If you actually score it under the accurate rules that the CBO says it ought to be scored under, this bill would raise the deficit by $32 billion.

Beyond that, these 10 new entitlement programs that are being created have artificial sunset dates in the law. The most permanent thing in Washington is a temporary government program; and if you repeal these artificial sunset dates, that's $39 billion added to the deficit, which is according to the Congressional Budget Office.

This bill does not save money. This bill raises the deficit. This bill crowds out the private sector; it deprives students of choices; it uses enormous budget gimmicks, and it exploits the budget reconciliation system to try and say that it's saving money and reducing the deficit when, in actuality, using honest budgeting and honest accounting, it does nothing like that.