Author: Mike Lillis

By any objective telling, the Democrats have been nothing if not kind to business since Barack Obama’s election. They’ve bailed out the banks with hundreds of billions of dollars. They’ve watered down climate bills with huge subsidies to the coal, oil and electric industries (i.e., the nation’s biggest polluters). They’ve caved to the telecom giants on warrantless wiretapping. They’ve cut deals with pharmaceutical makers that all but solidify their enormous profit margins. They abandoned mortgage bankruptcy reform. There’s been zero appetite for campaign finance reform. They bowed to the banks in delaying credit card reforms. And the list goes on.

No matter. The business community is upset with the Democrats for what it perceives as a heavy-handed approach to new regulation. And, behind the U.S. Chamber of Commerce, it intends to go after the party in November’s elections. The Washington Post’s Dan Eggen reports:

Modeled in part on Barack Obama’s 2008 campaign juggernaut, the [Chamber] has built a grass-roots operation known as Friends of the U.S. Chamber of Commerce. It has a member list of 6 million names, aimed at lobbying on legislation and swaying voters to back preferred candidates, primarily Republicans, in battleground areas, officials said.

The group will target vulnerable Democrats in up to two dozen states with ads, get-out-the-vote operations and other grass-roots efforts. The chamber plans to spend at least $50 million on political races and related activities this year, a 40 percent increase from 2008.

And this is the pickle for reform-minded lawmakers since the dawn of time. How do you protect citizens from the banks that wrecked the global economy, or the food conglomerates that have poisoned their customers with impunity, or the phone companies that tapped lines without a judge’s OK, or the coal companies that ruin entire mountain communities, when your re-election hinges on campaign cash from those same groups?

The answer — you don’t — makes a strong case for campaign finance reform.

Ask any lawmaker on Capitol Hill about the worst part of his job and the answer will usually be the same: They all claim to hate the hours a week they spend attending fundraisers or dialing for dollars to see them through the next election.

That they’re not doing anything to change the way that elections are funded says a great deal about the influence of money and lobbying in Washington (and it’s worth mentioning that they were all elected under the current financing system, meaning that it worked for them even as they claim to despise it).

Still, some lawmakers have made campaign finance reform a priority, pushing a bill — the Fair Elections Now Act — that would allow congressional candidates to access public funds in exchange for disavowing large contributions from individuals and all contributions from lobbyists. And today they got a boost.

Thirty former lawmakers, from both sides of the aisle, are urging Congress to enact campaign finance reforms ASAP, arguing that the current system “impairs” the ability of lawmakers to tackle the grave and numerous problems facing the country.

“From our collective experience, fundraising is one of the worst parts of serving in public office, and it has only gotten worse since we served,” the lawmakers wrote in an open letter appearing in Roll Call.

The current campaign finance system serves no one well, and serves us all as a nation poorly. The hours spent raising money from narrow interests would be better applied to connecting with voters, building relationships across the aisle, seeking ideas from issue experts, and addressing the needs of the nation.

As it stands, many members are forced into a permanent “campaign” mindset. The currency of America’s capital city has become money, not ideas, and that hurts democracy in a fundamental way.

Among the signers were former Reps. Lee Hamilton (D-Ind.), Sherwood Boehlert (R-N.Y.), Pat Schroeder (D-Colo.) and Pete McCloskey (R-Calif.).

Sponsored by Richard Durbin (D-Ill.) and Arlen Specter (D-Pa.) in the Senate, and by Walter Jones (R-N.C.) and John Larson (D-Ct.) in the House, the Fair Elections Now Act aims to attract candidates who otherwise might not have the financial resources to launch a serious campaign for federal office.

Under the bill, candidates wishing to tap public funds would first have to prove viability by raising a minimum amount of cash from in-state donors, who could give no more than $100 each. Candidates meeting that state-specific threshold would then receive a lump sum for the primary election, and could raise additional funds from individual donors, again not to exceed $100. For every $1 raised in-state, the government would chip in $4.

Primary winners would receive another grant for the general election, again with the stipulation that additional donations couldn’t top $100, and again with the enticement of a four-to-one federal match for in-state contributions. The matching funds would stop flowing at a certain point, but candidates could continue to raise unlimited small donations from individuals.

The bill would also prohibit participating candidates from accepting any donations from political action committees, the groups organized by businesses and ideological groups to influence elections.

Still, supporters might not want to hold their breath for passage. Not only does the current political environment require 60 votes for anything at all to move through the Senate, but the recent Supreme Court ruling empowering corporations and unions to spend unlimited sums to influence elections puts even more pressure on incumbents to raise campaign cash. After all, it is an election year.

Don’t say they’re not on message.

A group of Republicans this afternoon will meet with reporters to protest the Democrats’ plans to eliminate tens of billions of dollars in government subsidies to private companies that lend to students. The Democrats’ bill would have students borrow directly from the U.S. Treasury, which makes sense to supporters because it’s the Treasury that currently assumes all the risk for those loans anyway — a boon to private companies that assume no risk. The Congressional Budget Office estimates that eliminating the private middleman will save $67 billion over the next decade, most of which will go toward expanding college scholarships to low-income students.

No matter. “Such a move,” the Republicans’ release claims, “is an abuse of the legislative process that will eliminate borrower choice and competition, destroy tens of thousands of jobs, and add to the country’s long-term debt.”

The group includes Sen. Lamar Alexander (Tenn.), chairman of the Senate Republican Conference; Rep. John Kline (Minn.), the senior Republican on the House Education and Labor Committee; and Rep. Brett Guthrie (Ky.), the top Republican on the higher education subpanel.

It’s worth noting that not all conservatives agree. In fact, President George W. Bush proposed similar reforms as part of his annual budget proposal during three years of his tenure. More recently, The Weekly Standard blasted the current system of guaranteed loans as “a textbook example of crony capitalism or (if you prefer) corporate socialism.”

The government assumes all the risk while doling out contracts to favored businesses, who then reap the profits. With student loans, the lender gets preening rights in the bargain, marketing itself as a Merchant of Dreams, a benefactor of America’s youth, a sweet-tempered Mr. Jaggers to a nation of eager Pips.

In truth, the only people who like the system of guaranteed loans are the student loan industry — now handling more than $90 billion a year — and the congressmen whose districts contain large numbers of people who work in the student loan industry.

Earlier this month, Rep. Thomas Petri (Wis.), a senior Republican on the Education and Labor Committee, also condemned the current lending framework as a boondoggle enriching private lenders at the expense of taxpayers and students.

“Private loans are much more expensive for borrowers — and much more profitable for lenders,” Petri wrote in Roll Call. “We’ve seen how this plays out — and it isn’t in the form of true choice or competition for students.”

Perhaps GOP leaders knew where Petri stood when they skipped over the 16-term Wisconsin Republican to install Kline — a more conservative four-termer — atop the GOP team on the Education and Labor panel.

The Senate this evening took a long stride toward (finally) passing an $18 billion proposal designed to tackle the nation’s jobs crisis, voting to end debate on a bill granting tax credits to businesses that hire unemployed workers. The vote was 61 to 30 to block a GOP filibuster. Six Republican senators — Kit Bond (Mo.), Scott Brown (Mass.), Richard Burr (N.C.), Susan Collins (Maine), James Inhofe (Okla.) and Olympia Snowe (Maine) — voted for cloture, while just one Democrat — Ben Nelson (Neb.) — voted against it.

It marks the second time around for the so-called HIRE Act. The Senate last month passed a similar measure, only to have moderate House Democrats balk because the entire cost wasn’t offset elsewhere in the budget. House lawmakers tweaked the proposal to include that pay-for, and the new version is what the Senate is considering now.

Today’s cloture vote blocks a GOP filibuster by limiting debate on the bill to 30 hours. Republicans, though, are threatening not to allow Democrats to count the hours after adjournment tonight toward the 30-hour clock, setting the stage for a possible all-night session. That would put the final vote somewhere near midnight Tuesday, though Democratic leaders are hoping that a deal can be worked out beforehand to stage the vote sooner.

The House Budget Committee this afternoon approved a budget reconciliation bill that jumpstarts the process that Democrats hope will end in the Senate passing sweeping health care reforms by a simple majority.

The reconciliation bill, which will be the vehicle for the health care “fixes” the Democrats will add later this week, passed through the panel on a 21-16 vote. Two Democrats, Reps. Allen Boyd (Fla.) and Chet Edwards (Tex.), joined every Republican in opposing the measure. The process is starting in the House because, by law, any legislation that raises revenues (i.e., imposes taxes) must originate in the lower chamber.

The proposal now moves to the House Rules Committee, where Democrats are expected to attach the health reform language later this week before moving the package to the chamber floor. Democratic leaders have been mostly tight-lipped about the specifics of the health reform fixes, largely because they’re still waiting for the official cost estimates to come back from the Congressional Budget Office.

At least as controversial as the Democrats’ plan to go the reconciliation route has been their strategy, announced today, to pass the reconciliation bill alone, and then use an obscure rule to “deem” the larger Senate bill to be passed as well. Still, even Rep. David Dreier (Calif.), senior Republican on the Rules panel, conceded today that, if the Democrats can rally the votes behind the reconciliation bill, there’s nothing that GOP leaders can do to block the deeming strategy.

For all the criticisms Republicans are lobbing at the House Democrats’ plan to pass the Senate health care reform bill without actually passing the Senate reform bill, even the senior Republican on the House Rules Committee conceded today that there’s nothing the GOP can do to block the move, Roll Call reported:

“There is nothing that can prevent it,” said Rep. David Dreier (R-Calif.), the ranking member of the Rules Committee. “It’s something they can clearly do if they have the votes.”

House Speaker Nancy Pelosi (D-Calif.) indicated earlier today that she hopes to use a procedural move allowing House Democrats to pass a series of health reform “fixes” as part of a reconciliation bill, and in doing so “deem” the much larger Senate bill to be passed simultaneously. The strategy allows the Democrats to usher the Senate bill through the lower chamber without forcing votes from moderate Democrats, many of whom are balking at various provisions in the Senate bill.

The Washington Post’s Ezra Klein has a nice breakdown of how this process would work.

John Patrick Bedell, who shot and wounded two police officers near the Pentagon earlier this month, bought at least one of his 9 mm guns at a Nevada gun show, The Associated Press reported yesterday.

Law enforcement officials say Bedell, a man with a history of severe psychiatric problems, had been sent a letter by California authorities Jan. 10 telling him he was prohibited from buying a gun because of his mental history.

Less than three weeks later, Bedell bought a 9 mm Ruger at a Las Vegas gun show by exploiting one of the largest loopholes in the nation’s gun control laws: While federal law requires licensed gun dealers to perform background checks on all prospective gun buyers, unlicensed sellers — like those who often set up shop at roaming gun shows — are exempt. The background checks are designed to prevent sales to those legally ineligible to own guns, including felons, illegal immigrants and, like Bedell, the severely mentally ill.

Several bills floating around Congress would subject unlicensed vendors to the same background check rules as licensed sellers. Considering the political environment on Capitol Hill in recent years, however, even sponsors of those proposals concede that they’ve got no chance of passing anytime soon.

There were few surprises this morning from President Obama, who was in Strongsville, Ohio, to promote the health reform proposals the Democrats hope to move through the House this week. The president pointed out that (1) health costs, both public and private, are on an unsustainable path north; (2) most folks would see the cost of their insurance premiums fall under the reform bill, even as their coverage improves; and (3) an overwhelming majority of the reforms contained in the Democrats’ package are supported by Republicans as well.

I know many people view this as a partisan issue, but both parties have found plenty of areas where we agree. And what we’ve ended up with is a proposal that’s somewhere in the middle — one that incorporates the best ideas from Democrats and Republicans.

Also consistent in Obama’s speech was the argument — grown louder from the White House in the last week — that the private insurance industry is responsible for much of what’s wrong with the nation’s health care delivery system. What’s not to like, Obama asked, about a reform bill that would prohibit companies from denying coverage for pre-existing conditions? Or dropping coverage when patients get sick? Or hiking premiums for no reason outside of profit motive? He invoked memories of his mother, “in the last six months of her life, on the phone in her hospital room arguing with insurance companies when she should have been spending time with her family.”

We cannot have a system that works better for the insurance companies than it does for the American people. We know what will happen if we fail to act. We know our government will be plunged deeper into debt. We know millions more people will lose coverage. And we know that rising costs will saddle millions more families with unaffordable expenses — and will force many small businesses to drop coverage altogether.

House Speaker Nancy Pelosi (D-Calif.) this morning outlined the Democrats’ strategy for passing the Senate bill by not passing it. The question remains whether she can rally 216 Democrats behind the reconciliation bill said to “fix” the upper-chamber’s proposal. Should be quite a week.

Among the myriad criticisms that opponents of the Democrats’ health reform bills have leveled at the legislation, perhaps none resonates as strongly as the emotionally charged claims about how the proposals approach abortion coverage. For almost 35 years, federal law has prohibited the federal funding of abortions, and the critics of this year’s reform proposals contend that the Senate bill would loosen that decades-old restriction.

Never mind, for a moment, that the Senate bill would force women to write separate premium checks each month — one for abortion coverage and one for all other health care services — and that insurers would be required to segregate those funds to ensure that no federal subsidies dribbled into the abortion pot. One longtime health care reporter yesterday pointed out another reason that the critics have missed the mark by citing abortion as the reason to oppose health reform: Expanded coverage reduces abortion rates.

“Increasing health-care coverage is one of the most powerful tools for reducing the number of abortions — a fact proved by years of experience in other industrialized nations,” T.R. Reid, veteran reporter for The Washington Post and author of The Healing of America: A Global Quest for Better, Cheaper and Fairer Health Care, wrote in the Post Sunday.

“All the other advanced, free-market democracies provide health-care coverage for everybody. And all of them have lower rates of abortion than does the United States. This is not a coincidence.”

Reid cites figures compiled by the United Nations to make his point. In places where the government has steeped in to guarantee coverage for everyone, abortion rates are much lower than those in the United States.

Canada, for example, has 15.2 abortions per 1,000 women; Denmark, 14.3; Germany, 7.8; Japan, 12.3; Britain, 17.0; and the United States, 20.8.

“When it comes to abortion rates in the developed world,” Reid notes dryly, “we’re No. 1.”

To understand why, look no further than the explanation provided to Reid by the late Cardinal Basil Hume, a senior official of England’s Catholic Church during Reid’s tenure in London some time back.

“If that frightened, unemployed 19-year-old knows that she and her child will have access to medical care whenever it’s needed,” Hume explained, “she’s more likely to carry the baby to term. Isn’t it obvious?”

Transportation Secretary Ray LaHood, who previously represented Illinois in the House for 14 years, also recently blasted the anti-abortion crowd for citing the hot-button issue as a reason to oppose health reform. Writing in the Chicago Tribune Sunday, LaHood said he feels “compelled to remind my former colleagues that contrary to what many people have been saying, the bill explicitly prevents federal dollars from being used to fund abortion.”

It ensures not only that those seeking abortion coverage will be required to pay for it with their own money, but also that their personal money will never be commingled with federal funds. As a former congressman with a 100 percent pro-life voting record, I’m comfortable supporting this bill.

David M. Herszenhorn at The New York Times points out a curious thing happening in the midst of the debate over student lending reform: Although the plan to eliminate billions of dollars in taxpayer subsidies to private lenders originated, by some accounts, with President Bill Clinton, it’s now former Clinton aides who are leading the well-heeled push to kill the Democrats’ reform proposal.

The Glover Park Group, a DC-based political consulting firm founded by former Clinton staffers, blasted the lending legislation yesterday, just about the same time that the bill’s Democratic sponsors — Sen. Tom Harkin (Iowa) and Rep. George Miller (Calif.) — were promoting it on Capitol Hill.

“Miller and Harkin Push a Bill Doomed to Fail while Rejecting Bipartisan Solutions,” a Glover Park operative, Tim Miller, wrote in an unsolicited e-mail message to reporters. “While Miller and Harkin misguidedly storm forward with a bill that is doomed to fail, colleges and students are being denied the immediate benefits that would result from bipartisan, comprehensive student loan reform that could be passed with a few enhancements to the legislation.”

The “enhancements” the Glover Park crew is endorsing are found in a separate proposal that would allow private lenders to keep making student loans — and to keep profiting from those loans. So is it just a coincidence that the nation’s largest student lenders are pushing the very same proposal?

“We don’t comment on our clients,” Miller of Glover Park wrote to Herszenhorn.

With black lung disease on the rise in Appalachia, West Virginia Sen. Robert Byrd (D) last year took action. As Democratic leaders were piecing together their sweeping health reform proposal, the nine-term Byrd attached language that would expand black lung benefits for coal miners and their families.

It hasn’t been well received by the business community.

The U.S. Chamber of Commerce is attacking the provision (again), Politico reported yesterday, and their strategy for killing it is clear: They want to put it in the same category as the special Medicaid deal carved out to win the support of Nebraska Sen. Ben Nelson (D) — a deal so unpopular that even Nelson doesn’t support it any longer.

“This had to be another one of those backrooms deals that was put into the larger bill to cobble votes together,” Bruce Josten, the Chamber’s top lobbyist, told Politico.

Never mind that that wasn’t the case. Byrd’s office has been quick to point out that the language was a part of the Senate HELP Committee bill that passed that panel last July.

“This is nothing new coming from the chamber,” Byrd’s office said today in an email. “They were opposed to this provision before it passed the Senate in December, as they were with the entire health care reform bill.”

Under current law, miners have to prove that they’ve got black lung disease before they become eligible for benefits through the Black Lung Disability Trust, a 32-year-old program funded largely with an excise tax on coal companies. The Byrd amendments would (1) extend benefits to spouses of miners who’ve died from black lung, and (2) install the legal presumption that sick miners with at least 15 years experience are suffering from black lung, thereby allowing them to tap the benefits unless insurers can prove that the illness is something else.

In a January statement, Byrd said that the changes are only fair to the workers of Appalachia.

These black lung benefits have been promised to coal miners who come down with totally disabling black lung disease. But too often the coal companies and the insurers have chosen to elude their responsibility to these ailing miners by out-lawyering and literally out-lasting them.

Who will stand up for these families who have lost a loved one or the ability to earn a living because of the years they spent toiling inside a coal mine?

Not, it would seem, the Chamber of Commerce.

Just hours after Sen. Dick Durbin (D-Ill.) announced that he’d whip “aggressively” for the public option if the House includes it in its reconciliation bill, Speaker Nancy Pelosi (D-Calif.) killed the idea. The Washington Post quotes Pelosi saying today that the public option won’t be a part of the health reform legislation the lower chamber plans to take up shortly:

“I’m quite sad that a public option isn’t in there,” Pelosi added. “But it isn’t a case of it’s not in there because the Senate is whipping against it. It’s not in there because they don’t have the votes to have it in there.”

It didn’t take long for liberal groups to go on the attack. “When the Senate Whip says he will aggressively whip the House reconciliation bill through the Senate unamended and onto the President’s desk, the Speaker doesn’t get to say the Senate lacks the votes,” Adam Green, co-founder of the Progressive Change Campaign Committee, said in a just-released statement. Green has been drumming up support for the pubic option, getting 41 senators in the Democratic caucus to commit to the proposal.

We have 41 yes votes on the record — and it’s ridiculous to think Tom Harkin, Jay Rockefeller, Herb Kohl, Claire McCaskill, Kay Hagan, Robert Byrd, and other undeclared senators are going to vote against the president’s top domestic priority on the final vote. If Speaker Pelosi refuses to even allow a vote on the public option, than she killed the public option. It’s time for her to step up.

Sen. Dick Durbin (D-Ill.) caused quite a stir this week when he suggested that he’d urge liberal Democrats to vote against any amendments to the health care reform bill sent over from the House — even provisions like the public option that a vast majority of the Democratic caucus supports.

Last night, in a statement to liberal groups, the office of the Illinois Democrat clarified: “Sen. Durbin and the rest of the Senate Leadership will be aggressively whipping FOR the public option if it is included in the reconciliation bill the House sends over.”

That, according to those same liberal groups, puts “the fate of the public option … in Nancy Pelosi’s hands.” From the statement issued this morning by the Progressive Change Campaign Committee, Democracy for America and Credo Action:

The votes and the leadership are there in the Senate, and the public option will live or die based on Nancy Pelosi’s next moves. She’s been a hero on this issue in the past, and we hope that she steps up at this historic moment.

This creates a fascinating new dynamic, not least of all because Pelosi has never wavered in her support for the public option. Indeed, unlike the Senate health reform proposal, the House-passed bill would create one.

We’ll know the outcome soon enough. The Democrats say they want to pass health care reform before the end of the month.

On Tuesday, a group of moderate Senate Democrats — wary that a proposal to scrap billions of dollars of subsidies to private student lenders would cost jobs in their states – urged party leaders to consider alternatives to the student lending reforms moving their way through Congress.

Yesterday, Democratic leaders responded with a resounding, “Nah.” Instead of scrapping loan reform, leaders are moving forward with a plan to attach the lending bill to the health care legislation the Democrats hope to pass in the coming weeks. The New York Times reports:

The deal would bundle the bill into an expedited budget package along with the Democratic health care legislation, which would allow for both measures to be passed by the Senate on a simple majority vote. Without the deal, the student loan bill would have been unlikely to pass because it lacked the 60 votes needed to overcome a filibuster.

The reason it lacked the 60 votes, though, is itself informative. And here’s a hint: It’s not because lawmakers think that the current system — under which the government subsidizes private lenders to make loans to students — is the best use of taxpayer dollars. Indeed, the six Democrats expressing their concerns about the lending bill were quick to indicate that they “support reforming the federal student loan programs to generate historic budget savings.” What they haven’t suggested is how it’s possible to cut out those subsidies — estimated to save the government $67 billion over 10 years — without stripping jobs at the companies that currently make those loans.

As we wrote today, that dilemma isn’t limited to the realm of student lending. It’s a question plaguing every lawmaker who has in mind to rein in the same deficit spending that’s sustaining jobs in countless sectors of the economy.

And you thought your job was tough…

As Capitol Hill Democrats consider proposals to pull the country out of its huge deficit hole, they’re repeatedly running into a formidable impediment: themselves.

On issues as diverse as health care and student lending, provisions designed to rein in deficit spending have all run smack into the ubiquitous inclination of lawmakers to protect their home turf from the scalpel of budget cuts. Their message is familiar: Congress must do something to get its fiscal house in order, just don’t do it in my back yard. And party affiliation is largely irrelevant.

The most recent case surrounds a popular proposal to eliminate government subsidies to private companies that lend to students. The legislation, which has already passed the House and enjoys enthusiastic support from President Obama, would save the government tens of billions of dollars over the next decade — most of which would go toward expanding scholarships for low-income college students. Never an overly partisan issue, it was proposed by President Bush several times during his tenure. Senate Democrats are hoping to attach the legislation to their sweeping health care reform proposal.

Not so fast.

Those billions of dollars don’t go nowhere. And six Senate Democrats — Bill Nelson (Fla.), Blanche Lincoln (Ark.), Ben Nelson (Neb.), Mark Warner (Va.), Jim Webb (Va.) and Tom Carper (Del.) — voiced their objections to the proposal on Tuesday. The lawmakers — most representing hubs of large, private lenders — say they support student loan reform “to generate historic budget savings,” but have concerns that the White House proposal “could put jobs at risk.” They’re asking Senate Majority Leader Harry Reid (D-Nev.) to approach any action “in a thoughtful manner that considers potential alternative legislative proposals.”

Though short on specifics, the message is clear: The lawmakers want to rein in spending, but not if it threatens jobs in their states.

It’s an argument that’s applicable to almost every budget reform lawmakers tackle. That is, even if some industry, or project, or siphon of federal spending is utterly wasteful — even if it’s utterly pernicious — it’s still likely that somebody’s livelihood depends on it, and therefore someone in Congress is going to defend it. (Some examples include the fights over dropping the F-22 fighter jet; canceling the presidential helicopter; and forcing the automakers to keep dealerships around even if they weren’t selling cars).

In a more recent case, the Senate, as part of its health care bill, included creation of an independent commission empowered to recommend Medicare pay reforms if Congress didn’t do enough to control program costs. The recommendations would take effect unless Congress voted them down. Yet House Democrats are balking at the idea. Rep. Mike Capuano (D-Mass.), for example, sent a letter to supporters Thursday, saying he’s worried that the panel’s recommendations “would quickly and inevitably result in Massachusetts losing tens of thousands of jobs and would seriously undermine one of our region’s economic engines.”

“Other regions with heavy concentrations of health care would feel a similar impact,” he wrote.

Such resistance highlights the question facing leaders on Capitol Hill as they try to rein in federal deficits: How does Congress “generate historic budget savings” when thousands of jobs likely hinge on the spending?

The question is timely — and not only because the country is in the middle of a jobs crisis. The nation’s budget deficit hit $1.4 trillion last fiscal year and is on pace to top that figure this year. Much of that spending represents emergency measures enacted to address the recent economic downturn, the worst the country has suffered since the Great Depression. Yet even absent those temporary measures, federal spending remains on an unsustainable course, with Medicare and Medicaid alone threatening to swamp the federal budget in a few short decades.

Aiming to maximize tax dollars, the House passed a bill in September that would eliminate the Federal Family Education Loan program, or FFEL, under which the government subsidizes private lenders that cater to students. Instead, all loans would originate directly from the U.S. Treasury, though private lenders would still compete to service those loans. The Congressional Budget Office has estimated that the provision to eliminate the for-profit middle man would alone save the federal government $67 billion over the next decade. The bill’s sponsor, Education and Labor Committee Chairman George Miller (D-Calif.), told reporters at the Capitol Thursday that the current system represents “a titanic boondoggle in excess subsidies to some of the nation’s rich and most powerful banks.”

Banks, he could have added, that employ large numbers of folks in a large number of states.

The regional protectionism is hardly limited to Democrats. When the White House last month proposed to cut an expensive defense contract in Alabama, for example, GOP Sen. Richard Shelby (Ala.) was quick to retaliate, placing a hold on every Obama nominee before the Senate. When President Bush vetoed a $300 billion farm bill in 2008 — citing taxpayer subsidies to wealthy farmers — it was Sen. Saxby Chambliss (R-Ga.), among other farm-state Republicans, to rally the successful override. The list goes on.

Joshua Gordon, policy director for the Concord Coalition, a budget watchdog group, said the FFEL debate mirrors that over Medicare Advantage, the program under which private companies cater to Medicare patients. Each program represents “a system that everyone knows is inefficient,” Gordon said, but reforms have gone nowhere in Congress, largely due to the local interests of some members.

The reluctance of Congress to make difficult budget decisions, Gordon added, only bolsters the argument for an independent deficit commission “empowered to think of the country on the whole and not just individual districts.”

Then again, in bipartisan fashion, the Senate shot down such a proposal last month.

“There is one thing that often unifies Congress,” Gordon said, “and that is irresponsibility.”

The head of the Senate Banking Committee, Connecticut Democrat Chris Dodd, announced this morning that a long-awaited proposal to install sweeping new oversight of the finance industry will be unveiled Monday.

Okay, maybe it’s not so sweeping.

To entice the support of a few Republicans — notably Sen. Bob Corker (Tenn.), the lead negotiator for the GOP — the bill won’t include a separate consumer financial protection agency, which both the White House and countless consumer advocates say is the best strategy for reining in the most abusive practices of the banks and other financial institutions.

On top of that, Corker is reportedly insisting that any consumer protection unit included in the bill not have the power to regulate pawnbrokers, payday lenders and car dealers — among the most abusive branches of the finance industry, according to consumer advocates, who are already blasting the plan as insufficient.

“The point of the agency is to provide a cop on the beat that focuses where the problems are, not a cop that’s fenced off from some of the worst actors,” Elizabeth Warren, Harvard law professor and a longtime champion of a separate, robust consumer protection agency, told The Washington Post.

Still, Dodd says he’s pleased with the compromise on which he’s been focused for most of the year, even while he’s conceding that sticking points remain.

“Our talks will continue,” he said in a statement, “and it is still our hope to come to agreement on a strong bill all of the Senate can be proud to support very soon.”

Dodd said he hopes to hold a hearing to mark up the bill on March 22.

Just two days after President Obama whacked the insurance industry for being an impediment to much-needed health care reform, Kathleen Sebelius took a second swing.

Speaking Wednesday at a national health insurance conference, the White House Health and Human Services secretary blasted the nation’s insurers for a laundry list of recent trends, including skyrocketing premiums that threaten to leave patients uncovered, industry consolidation that has squeezed patient choice, and leaping profits reported by the same companies now hiking costs on their customers.

A year after Obama entered the White House with a promise to tackle those very issues, “the cracks in the health care system have opened even wider,” Sebelius told hundreds of members of America’s Health Insurance Plans gathered at the Ritz-Carlton in Washington. “We’ve got to figure out a new strategy.”

The new strategy Sebelius has in mind, of course, revolves around the health reform bills currently bouncing through Congress. While both the House and Senate have passed versions of those sweeping proposals, the surprise victory of GOP Sen. Scott Brown (Mass.) in January has left the Democrats without the 60 votes they need to push a united bill through the Senate under normal rules. Democratic leaders are now hoping to tap the budget reconciliation process to move the legislation with a simple 50-member majority. Meanwhile, the process remains stalled indefinitely.

The lobbying power of the influential insurance industry would surely help get those reforms over the finish line, and Sebelius, switching gears from attack dog to lobbyist, implored AHIP members Wednesday to put their considerable weight behind the bills.

“It’s not too late to work on this together,” Sebelius said.

To win AHIP’s support, however, Democrats would have to tweak their proposals considerably. Karen Ignagni, president and CEO of AHIP, which lobbies for the nation’s largest health insurance companies, insisted that the group is behind the general concept of health care reform, but rejects the Democrats’ plans out of concern that they would “make the system more expensive, not more affordable.”

“We are very disturbed about what is happening with … underlying costs,” she said.

Ignagni said the industry wants a more sweeping individual mandate — meaning the guarantee of more customers — before it’ll sign on to the rest of the reform package, which would prohibit insurers from denying coverage for preexisting conditions or arbitrarily hiking premiums.

In one important sense, Ignagni is exactly right: The cost of delivering health care has historically grown at a rate much faster than either wages or inflation, and ever-improving medical technologies have only accelerated that trend. Indeed, the Centers for Medicare and Medicaid services reported last month that Americans spent $2.5 trillion on health care in 2009, a figure representing 17.3 percent of the nation’s economy and a jump of 1.1 percentage points from 2008 — the largest single-year leap since 1960 when the government began keeping such records. And if the cost of medical care is increasing faster than the rest of the economy, then the costs to insure that care will necessarily do the same.

“We should put affordability at the top of the agenda,” Ignagni said.

Still, the industry has done little to explain why insurance companies continue to consolidate their operations, leaving patients with fewer and fewer options in most markets. Indeed, the American Medical Association recently found that, in 24 states, just two companies control 70 percent or more of the market share. “The near total collapse of competitive and dynamic health insurance markets has not helped patients,” AMA President J. James Rohack said in a recent statement.

Nor have insurers had much luck justifying why industry profits are skyrocketing (up an average of 56 percent in 2009, by Sebelius’ math) at the same time that companies are hiking premiums in the double digits. Ignagni’s explanation that insurers “must be solvent to pay claims” likely won’t meet the approval of Sebelius, who warned that the cost hikes would only throw patients off the rolls.

“Americans are willing to pay a fair price … as long as it gives real security when someone gets sick,” Sebelius said.

The saga isn’t over. Sebelius has asked for AHIP to come to the table with changes in the Democrats’ reform proposals, and Ignagni has accepted.

The ball is now in the court of the insurers.

The bill would extend the filing deadline for the existing tiers of unemployment insurance (retroactively from March 1) through Dec. 31 of this year.

The vote was 62 to 36, with six Republicans voting in favor and Sen. Ben Nelson (Neb.) the only Democrat to vote against.

The bill now moves to the House , where it remains unclear how leaders intend to sneak the bill, which is unfunded, past the fiscally conservative Democrats who are sure to insist that the new costs be offset.

Ezra Klein at The Washington Post reports:

“The filibuster has been abused,” Sen. Harry Reid said at a reporter’s briefing this afternoon. “But next Congress, we are going to take a look at it. And we’re going to make some changes in it.”

Reid didn’t say precisely what he’s got in mind for a fix, Klein reports, nor has the Senate majority leader said how he plans to get such a controversial measure through the upper chamber. (Ironically, it’s sure to be filibustered.) But there’s a growing sense that something has to change if Congress hopes to tackle the most pressing problems of the day, which currently include a health coverage crisis, a jobs crisis, a climate change crisis, a debt crisis, a deficit spending crisis and a housing crisis, to name just a few.

There are bills out there addressing all of these things, but when it requires a full month to pass a bill that literally every member of the Senate supports, as was the case last fall surrounding unemployment insurance, then there’s no way for the chamber to enact the more controversial reforms with anywhere near the urgency that these things demand. (The House has passed 290 bills in the last 14 months that are now sitting idle in the Senate.)

There are those who argue that the snail’s pace of the Senate was the conscious design of the founding fathers. (George Will penned such an argument just a few weeks ago.) And they have a point. You wouldn’t want Congress passing reactionary legislation to every emotional event that ever befell the country.

But again, when even bills with unanimous support are tied up for weeks on end simply to make a political statement, then the chamber has lost its ability to govern. It’ll be interesting to see what Reid and the Democrats intend to offer by way of reform.

The Senate this afternoon hopped the procedural hurdle to end debate on a $150 billion package that would renew a number of expiring tax breaks and extend access to emergency unemployment benefits.

The vote was 66 to 34, with eight Republicans voting in favor of the measure and one Democrat, Nebraska Sen. Ben Nelson, voting against.

Of note, the UI provision extends only the filing deadline (through December 2010) for existing jobless benefits, which can run up to 99 weeks in some states. It does not create another tier of federal help beyond the existing four-tier structure (though it does provide benefits retroactive to March 1, when the filing deadline came and went).

Today’s cloture vote means that debate before the final vote is limited to 30 hours, although the office of Senate Majority Leader Harry Reid (D-Nev.) said today that that vote could happen sooner (likely Wednesday).

After the bill passes the upper chamber, it moves to the House, where a number of Democrats are sure to object to the fact that the package isn’t offset by spending cuts elsewhere. It’s unclear how House leaders plan to approach the bill.