U.S. Senators Chuck Grassley and Tom Harkin both voted for a bill to ban insider trading by members of Congress, which overwhelmingly passed the U.S. Senate today. Follow me after the jump for details on how the Iowans voted on significant amendments to the bill, including one backing term limits for members of Congress.  

A new report underscores how badly Iowa lawmakers screwed up when they missed the chance in 2010 to enact reasonable regulations on “legalized usury,” more commonly known as payday lending.

In his latest e-mail blast to constituents, Senator Tom Harkin touches on his priorities as the new chairman of the Senate Committee on Health, Education, Labor and Pensions. One point he mentioned hasn’t been on my radar screen this year:

The full agenda of the Committee will focus on reforming federal student loan programs so that we can stop subsidizing private banks and instead focus on loans that the federal government can make more cheaply.  We can save $87 billion over 10 years in that effort, and use that money to increase Pell grants for low- and middle- income college bound students, and to fund other important education initiatives.  

I had forgotten about President Barack Obama’s effort to reform the student loan system:

His plan is to do away with a system in which the Federal Government subsidizes banks and other private finance companies like Sallie Mae to lend money to students. The Administration essentially wants to cut such companies out of the game and run the system itself. Democrats claim the move will save $87 billion over 10 years, which can be used for a laundry list of education priorities, including increasing the maximum amount of Pell Grants, expanding Perkins Loans and investing in community colleges and other programs. […]

Educational institutions currently have two ways to offer federal loans to students. In the Federal Family Education Loan (FFEL, pronounced “fell”) program, the government pays subsidies to banks and lenders to dole out money to borrowers and reimburses companies up to 97% of the cost of any loan that is not paid back. The second way is the direct-loan program, created in 1993 as an alternate option, in which the government cuts out the middle man, lends money directly and gets all the profits. If the Student Aid and Fiscal Responsibility Act (SAFRA) passes both houses of Congress, the approximately 4,500 colleges and universities that are currently signed up for FFEL will have to abandon the program and start using the direct-loan option by July 1, 2010.

Directing federal money toward programs that help needy students, such as Pell Grants, makes a lot more sense than subsidizing private banks to make student loans.

Finding 60 votes in the Senate for this proposal will be challenging, however. This is one banking bailout Republicans will fight hard to protect, and according to Time magazine, at least one Democrat (Ben Nelson of Nebraska) opposes the plan too. If this bill passes, it will probably be through the budget reconciliation process, which requires only 51 votes in the Senate.

Health care reform is sure to take up a lot of Harkin’s time this fall, but I’m glad the HELP chairman will also focus on other bills that could change many lives for the better. Even if the health care project falls apart in the Senate, Harkin could accomplish a lot this year if he gets the student loan bill through and brokers a good compromise on the Employee Free Choice Act.

I see only one downside to Harkin becoming the HELP chairman, and that’s Senator Blanche Lincoln of Arkansas taking over the Agriculture Committee. Jill Richardson has been on this case at La Vida Locavore. I recommend reading her posts on industry lobbyists who used to work for Lincoln, Lincoln’s strong support for corporate ag interests such as Arkansas-based Tyson Foods, and Lincoln’s positions on trade, the climate change bill, and the Clean Water Act.