Congress passed a sweeping budget bill Wednesday that reduces
federal spending by $39 billion and includes a $11.9 billion cut to
the federal student loan program, the largest cut in the history of
federal financial aid programs.
The bill, titled the Deficit Reduction Act, passed narrowly by a
vote of 216-214, mostly along partly lines, and President Bush is
expected to sign it into law.
Republican supporters of the bill said the budget cuts will
begin to restore discipline in spending and is a necessary step to
control Medicare expenditures, which will become more burdensome as
baby boomers start retiring.
“The Deficit Reduction Act seeks to curb the unsustainable
growth rate of mandatory programs that are set to consume 62
percent of our total federal budget in the next decade if left
unchecked,” said Rep. Adam Putnam, R-Fla.
Democrats largely opposed the measure, saying it protected
special interest groups such as health insurance companies at the
expense of Medicaid beneficiaries and students.
“This is a product of special interest lobbying and the
stench of special interests hangs over the chamber,” said
Rep. John Dingell, D-Mich.
Political science Professor Barbara Sinclair said the student
loan component of the bill may be the most politically costly cut
for the Republicans in the upcoming midterm elections.
“If you cut really poor people’s programs you tend
to get away with it because they don’t have a lobby,”
Sinclair said. “With students, it’s a little
different.”
The University of California Students Association made an effort
to defeat the bill, running a UC-wide campaign on Tuesday that
called and e-mailed representatives to urge them to vote no on the
bill.
Jeannie Biniek, external vice president of the Undergraduate
Students Association Council and member of the UCSA board, said the
bill will make education less affordable for students and may be a
possible deterrent to attending college.
“At a time when student fees have increased 79 percent in
the last five years, (legislators) should be taking steps to make
education more affordable, not less,” Biniek said.
Supporters of the bill counter that most of the savings comes
from lender subsidies, not from students paying off loans.
In addition to cutting federal spending on student loans, the
bill also cuts aid to social welfare programs like Medicaid and
Medicare.
Though the cuts to these programs are small ““ a 0.4
percent cut in Medicaid funding and a 0.3 percent cut in Medicare
““ it allows states to reduce Medicaid coverage and charge
increased fees to Medicare beneficiaries.
“The bill will have detrimental impacts on working
families,” said Ruth Obel-Jorgensen, organizing director of
UCSA.
Some Democrats in the California State Assembly lobbied to stop
cuts in federal aid for student loans.
Assemblyman John Laird, D-Boulder Creek, sent a letter to U.S.
Speaker of the House Dennis Hastert asking for the $12.7 billion
cut in aid for student loans to be removed from the bill.
The House of Representatives first approved the bill in
mid-December by a vote of 212-206, but it was sent back when
Democrats in the Senate made technical changes to force another
vote in the House after the winter recess.
During the break, some members of congress changed their minds
about the bill.
“Over the intervening month, people that I know and
respect have gone through the details of this legislation … and
they’ve said, “˜This is really a disaster,'”
said Rep. Rob Simmons, R-Conn., who changed his vote to no.
With reports from Bruin wire services.