# Pell Grants

Stimulus bill anniversary thread

It’s been a year since President Barack Obama signed the American Recovery and Reinvestment Act (better known as the stimulus bill) into law. I didn’t like the early concessions Obama made to Republicans in a fruitless effort to win their support for the stimulus. I was even more upset with later compromises made to appease Senate conservadems and Republican moderates. They reduced spending in several areas that had real stimulative value (school construction funds, extra money for the Low Income Home Energy Assistance Program, aid to state governments) in order to include tax cuts that have much less stimulus “bang for the buck.” Senator Tom Harkin was right to question why 9 percent of the stimulus bill’s cost went toward fixing the alternative minimum tax, for instance.

Still, I supported passage of the stimulus bill. In late 2008 and early 2009 the U.S. economy was losing 600,000 to 700,000 jobs per month. Something had to be done. On balance, the stimulus did much more good than bad. Economists agree it has saved or created a lot of jobs:

Just look at the outside evaluations of the stimulus. Perhaps the best-known economic research firms are IHS Global Insight, Macroeconomic Advisers and Moody’s Economy.com. They all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs. The Congressional Budget Office, an independent agency, considers these estimates to be conservative.

Two and a half million jobs isn’t enough to compensate for the 8 million jobs lost since this recession began, but it’s a start.

Not only did the stimulus create jobs, it greatly increased spending on programs that will have collateral benefits. Incentives to make homes more energy efficient will reduce greenhouse gas emissions and save consumers money that they can spend elsewhere. Money for sewer improvements will provide lasting gains in water quality (inadequate sewers and septic systems are a huge problem in Iowa). The stimulus included $8 billion for high-speed rail. It wasn’t nearly enough, of course; we could have spent ten or twenty times that amount on improving our rail networks. But that $8 billion pot drew $102 billion in grant applications from 40 states and Washington, DC. The massive demand for high-speed rail stimulus funding increases the chance that Congress will allocate more funds for rail transportation in the future.

Unfortunately, most Americans don’t believe the stimulus bill created jobs. That’s largely because unemployment remains at a historically high level of 10 percent nationwide. Also, inflation-adjusted average weekly earnings have gone down during the past year. In addition, Republicans have stayed on message about the worthlessness of the stimulus bill, even though scores of them have hailed stimulus spending in their own states and districts.

Democrats on the House Labor and Education Committee released an ad that lists various popular stimulus bill provisions, such as increasing Pell Grants and teacher pay. The ad uses the tag line, “There’s an act for that,” naming the American Recovery and Reinvestment Act at the end. I don’t think it’s effective, because the ad doesn’t include the word “stimulus.” Few people will realize that the ARRA refers to the stimulus bill.

Bleeding Heartland readers, how do you view the stimulus one year later?

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Latham, King vote against student loan reform

The House of Representatives passed the Student Aid and Fiscal Responsibility Act on Thursday on a mostly party-line vote of 253 to 171 (roll call here). Iowa Democrats Bruce Braley, Dave Loebsack and Leonard Boswell all voted for the bill, while Republicans Tom Latham and Steve King voted against it.

Click here to download a pdf file containing the House Education and Labor Committee’s estimates on how many students in each Congressional district will be able to receive Pell Grants during the 2010/2011 academic year under this reform. The estimate is 16,355 students in Iowa’s fourth district (Latham) and 16,301 students in Iowa’s fifth district (King).

Overall, just four Democrats voted against the bill: Allen Boyd (FL-02), Paul Kanjorski (PA-11), Stephanie Herseth-Sandlin (SD-AL), and Mike McMahon (NY-13). Six Republicans voted for the bill: Vern Buchanan (FL-13), Joseph Cao (LA-02), Timothy Johnson (IL-15), Tom Petri (WI-06), Todd Platts (PA-19), and Ileana Ros-Lehtinen (FL-18). At Congress Matters, David Waldman posted details about the amendments proposed to this bill and which ones passed yesterday.

A press release from the Democratic Congressional Campaign Committee included these bullet points about the bill:

*The Student Aid and Fiscal Responsibility Act is the largest single federal investment in higher education in American history and will also be used to pay down the national debt (H.R. 3221, #719, 9/17/09)

*The measure will make federal student lending more efficient through a variety of reforms that will save the federal government $87 billion. Of those savings, $77 billion will be invested toward making college more affordable and $10 billion will be used to pay down the national debt.

*These savings will be achieved through a number of reforms including:

*Converting federal lending to the Direct Loan Program.

*Establishing a competitive bidding process, allowing the U.S. Department of Education to select lenders based on how well they serve borrowers.

*Allowing non-profit organizations to continue servicing student loans.

*This measure will increase the amount of Pell Grants in 2010 and 2011, lower the interest rates of federally subsidized student loans, expand the Perkins Loan program, and streamline the application form for financial aid.

Senate HELP Committee Chairman Tom Harkin is committed to passing student loan reforms this year.

UPDATE: Like Latham and King, all the House Republicans from Kentucky voted against this bill, and I agree with RDemocrat’s assessment at the Hillbilly Report:

I think this once again properly demonstrates the hypocrisy of Kentucky Republicans and the Republican Party as a whole. They constantly lecture us on spending, but they care little about money being wasted as long as it is being wasted on corporate welfare. When presented with a chance to both save money, and help working poor children afford college, they would rather waste that $80 billion.

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