Obama and Biden - two cats who ate more than one canary - image: Drudge Report
In yet another power grab by the Obama Administration, the $70 plus billion dollar student loan industry is about to be moved into the “owned by the government column”. Written as part of the Reconciliation Bill passed by Congress, which included the Health Care Reform Bill, another Government Owned Industry was thrown in and almost no-one noticed. The media is now just beginning to report, and the AP picked up the story on after the Senate had the bill in Committee, approved and put into the reconciliation bill, any “fixes” added by the House to this new scheme. This occurred while they were busy ramming the Health Care Bill (signed yesterday by Obama) through (He signed the Senate version), either wittingly or unwittingly (the latter being most probable), the House took away from the nations lenders one of the most risk-free segments of the lending business.
Now it’s back to the Senate, with the fact that it had been added to the reconciliation (approved) by the house, it is a given this will be the latest in a series of industries that the Government owns. What it means to the general public: The Senate version reduces the amount of percentage of income allowed to be devoted to student loan repayment by to 10% (now at 15%), Pell Grants are not increased, but remain the same, and if one chooses to attend college in Europe, say, as a U.S. Citizen they would not be allowed to go to a lending institution outside of the U.S. The interest rate the government deems fair is 6.8%, a slightly higher interest rate than is now available.
What happens if someone defaults? They owe the Federal Government, which will fall to the Federal Collection Agency to collect on any outstanding debt – this agency is otherwise known as the I.R.S.
Therefore, not only will those 17,000 new IRS hires pegged to be responsible for overseeing those $25,000 fines on all Americans that choose (or cannot afford) the Government Brand of health care, they will, undoubtedly be tasked with collecting student loans. That’s a lot of revenue expected, according the AP report, somewhere in the neighborhood of $61 billion in 10 years, 19% of which would go to bail out the deficit, which is, when one see deficit projections in the trillions, is a drop in the bucket.
What of the banks and their employees? The banks go under and with them, their employees. Ironically, Ben Nelson, Democrat Senator from Nebraska, is now balking at this portion of the bill. Apparently, Nelnet, one of the largest Student Loan Lenders is based in Nebraska. It doesn’t take a genius to figure out that once an industry loses its basis of operation, more individuals are faced with unemployment. (The total estimate of unemployed in the Student Loan Lending Industry is 30,000. Source - US News). Nebraska, who is also suing the Federal Government over Health Care under the commerce clause, is about to see their unemployment numbers ramped up a tad. Nelson, already on the ropes and most likely unelectable in 2012, especially once the Senate Bill is signed by Obama, and the unemployment rate in Nebraska continues its upward climb.
This leads one to the question; if the President and his like-minded cohorts in the Congress and the Senate, in getting the majority (Democrats) to sign onto a reconciliation bill sight unseen (unread), what else might be lurking in that bill that will affect the lives of millions of American’s and their relationship with the IRS?
As everyone should be aware, by now, the only reason that the Massachusetts version of Health Care for All had managed to go red by only $295 million dollars this year, was because of the massive subsidies given by the Federal Government. With the deals given to the Mass. Democrat Congressional group (that body may face big changes in 2010, despite the national pundits), of Medicare supplements till the cows come home if they towed the line and voted on Reconciliation, one gets the picture rather quickly that in order for a program of this magnitude in a state that, in respect to population and size, is minuscule in comparison to Florida, New York, Michigan and California, how on earth is the Federal government going to sustain a nationalized version without going red, and quick, or raising taxes on the remaining U.S. businesses and every working household in America? Apparently the new tax on Tanning Salons may not cover the entire bill so count on more taxes and more government run previously private industry.
For every good piece of legislation written into either of these bills, they are far outweighed by the bad. Here is another one which might be put in the rescind column when the House, Senate and White House are changed in 2014. For had taken out loans for college – non-traditional students (those returning to the workforce, at a later age), may be faced with over-zealous collection methods, should, in this economy, they somehow manage to be unable to pay their now, government owned, student loans. When one has no wages to garnish besides a home, a car, and social security payments, what does one expect the government to take first? It is no wonder that, in re-writing the bankruptcy rules, the very same Democrat Congress, exempted student loans from bankruptcy filing (See who’s in charge of the House Finance Committee – one online gambling friendly Barney Frank). Therefore, should one be in dire straits, they will be faced by the IRS, who will not be as willing to offer endless loan forbearance for hardship, that the current private lenders now allow.
What’s next? Who knows? The government now owns car companies, the banks, (the mortgage industry), the student lending industry, the health care industry, and with cap and trade on the block, one can bet the utilities will not be far behind. (If said bills are not already being hastily written into a piece of legislation that those who hold sway over the United States can deem and pass without a vote – before November 2010).
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