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.

Senator Tom Harkin told a crowd of nearly 2,000 people today that health care reform including a public health insurance option will pass before this Christmas. Speaking at his 32nd Annual Steak Fry in Indianola, Harkin joked,

“This is my kind of town-hall meeting,” […] because he didn’t see any Republicans standing up to say, “Keep your government hands off my Medicare.”

Harkin and event headliner Al Franken predicted that health care reform would pass with some Republican votes, which seems unlikely if the final version of the bill contains a public option. Republican Senator Olympia Snowe of Maine has been the focus of White House courting on health care, but she opposes a public option, apparently because it has the potential to provide lower-cost health insurance.

The Senate Committee on Health, Education, Labor and Pensions passed a bill this summer containing a public option, but according to one critic, the HELP bill’s public option is anything but robust:

the actual provisions in the HELP Committee bill call for numerous “community health insurance options,” not the single “Medicare-like” plan promised by “public option” advocates. That means the individual “options” will probably be as small and weak as the co-ops now under discussion in the Senate Finance Committee. More importantly, these “community options” will almost certainly be run by insurance companies.

The public option in the bill that cleared the House Energy and Commerce Committee, HR 3200, is also weak in several respects.

President Barack Obama met with 17 relatively conservative Democratic senators on Thursday, reinforcing many people’s fears that he was ready to discard the public option. The same day, Harkin assured the Progressive Populist blog that 51 votes can be found in the Senate for a bill with a public option.

So what about all the hubub about the Blue Dogs and/or Progressives opting out if the bill doesn’t meet their liking? Harkin said don’t put too much stock in those statements.

“Look, around here people are always jockeying for power. That’s all this is,” Harkin said.

The only chance of making this bill stronger, in my opinion, is getting a large bloc of House Democrats to draw a line in the sand. If you live in Iowa’s first, second or third Congressional districts, please contact Bruce Braley, Dave Loebsack or Leonard Boswell to urge them not to accept any bill containing a “trigger” (which is guaranteed to fail) or some other fake public health insurance option. Organizing for America has a new petition out if you prefer that method of generating an e-mail to your member of Congress.

UPDATE: Don’t miss John Deeth’s entertaining liveblog from this event, with lots of photos. Braley and Loebsack praised Boswell for standing up for a public option (unlike many Blue Dogs).

From Chase Martyn’s write-up at Iowa Independent:

Boswell and fellow Democratic U.S. Reps. Bruce Braley and Dave Loebsack also expressed optimism that a final bill would include measures to reform medicare reimbursement rates. Medicare currently pays doctors in rural states like Iowa less than what doctors in densely populated states receive for the same procedures.