WASHINGTON — Sen. Ben Nelson could face a particularly thorny vote if Democratic leaders follow through with plans to pair final changes to health care legislation with another bill to overhaul the country's college aid system.
The Nebraska Democrat has serious concerns about the economic impact of that college aid bill, which would affect lenders such as the Lincoln-based Nelnet.
On the other hand, those final health care changes include eliminating Nebraska's specific exemption from extra Medicaid costs — the so-called “Cornhusker Kickback.”
That arrangement would be replaced with additional Medicaid assistance to all states.
Nelson, who provided the crucial 60th vote to advance the Senate bill last year, supports extending the Medicaid assistance to all states and says that was his goal all along.
But Nelson may feel compelled to vote against the bundled legislation because of the student loan provisions. Political opponents could then characterize that “no” vote on the health care changes as a vote to protect the “kickback.”
Nelson said he will simply focus on the substance of the legislation.
“I'll just have to explain my reasons,” Nelson said of potentially opposing the bundled bills. “That's sort of the hazard of being in elective politics.”
It was not clear Wednesday exactly what, if anything, the Senate will be asked to consider. House Democrats were still trying to round up enough votes for passage of the original Senate health care bill, as well as the companion package of changes.
The companion bill would be passed through the budget reconciliation process, which requires only a simple majority in the Senate. That would avoid a GOP filibuster — important because Democrats no longer have the 60 votes needed to break one.
Sen. Tom Harkin, D-Iowa, and other Democrats are looking to bundle the companion health care bill and the college aid bill for several reasons.
The college aid bill would increase Pell grants for low-income students and eliminate federal subsidies to private lenders, saving the government tens of billions of dollars.
Including the college aid bill would improve the health care package's overall budget deficit reduction, which would help in the battle for public opinion. It also would help the package meet rules governing the budget reconciliation process that require bills to have a certain level of deficit reduction.
Also, the college aid bill is popular among Democrats in the House, who passed it by a wide margin last year. The hope is that including it with the health care changes would attract at least a few desperately needed votes.
Lastly, if the college aid bill is not included in the reconciliation package, it would likely be killed off by a filibuster in the Senate.
Still, bundling the bills could cost some Democratic votes in the Senate.
Nelnet and other lenders have been lobbying Capitol Hill intensely over the college aid bill. They say it would result in significant job losses. Nelson has been a key supporter of preserving a private sector role in student lending.
“I think it could have serious economic impact on jobs in Nebraska, and I'm obviously quite interested in seeing that that doesn't happen,” Nelson said Wednesday.
Nelson isn't the only one. Five other Senate Democrats joined Nelson in writing a letter recently to Senate Majority Leader Harry Reid, D-Nev., expressing concern about the economic impact of the student loan bill.
Nelnet spokesman Ben Kiser on Wednesday criticized the idea of bundling the two bills together. He said the Senate has never so much as held a hearing on the bill.
“This legislation is too important to be passed in this manner,” Kiser said. “It will impact students, schools and every American taxpayer.”
Other senators who voted against the health care bill said the student loan provisions wouldn't improve it.
Sen. Chuck Grassley, R-Iowa, said that the provisions would increase unemployment in certain areas and that the American people have been voting with their feet for years in favor of the private sector loan programs.
“They're not running to the government direct loan program, they're running to their local banks,” Grassley said.
Sen. Mike Johanns, R-Neb., said that the legislation represents another “government takeover” and that having the private sector handle the loans creates economic activity.
Nelson made it clear that he wants to see all the details regarding both the student loan provisions and the health care changes before he makes a decision on how he'll vote.
Democrats also could consider an alternative proposal supported by Nelnet that would have private lenders continue to originate loans, then sell them to the Department of Education and collect a fee.
Contact the writer:
202-662-7270, joe.morton@owh.com
