Yesterday, Senate Banking Committee Chairman Chris Dodd (D-CT) released the latest version of his financial regulatory reform legislation, after he decided last week that negotiations with Republican members of the committee were taking far too long. Of course, one of the biggest issues that the bill is meant to address is that of financial firms that are “too big to fail.” And already, Senate Republicans are claiming that Dodd’s bill doesn’t do away with them:

“This bill does nothing to change the expectations in the market that some firms are too big to fail,” said Senator David Vitter, a Louisiana Republican who serves on the Banking Committee. “I’m disappointed that Senator Dodd has decided to abandon any sort of bipartisan approach in favor of political posturing on behalf of the Obama administration.”

This hews closely to the advice that GOP pollster Frank Luntz gave to Republicans earlier this year, which was to portray financial reform as inevitably leading to more big bank bailouts, no matter what the legislation actually says. House Republicans also used this tactic incessantly during the regulatory reform debate last year, falsely claiming that Rep. Barney Frank’s (D-MA) bill created a “permanent bailout fund.”

However, Dodd’s actual legislation tells a very different story. For one thing, it bars financial firms from owning more than 10 percent of the assets in the financial system, while creating a Financial Stability Oversight Council (formed by the Treasury Secretary and the heads of the regulators) that will recommend stricter capital and leverage standards for firms as they grow. It also includes the option for regulators to implement bans on proprietary trading (although it doesn’t mandate such bans). These provisions will discourage excessive growth and make it more expensive for companies to expand to an outlandish size.

Under the bill, financial firms would also have to craft a plan for “rapid and orderly resolution in the event of material financial distress or failure.” Basically, firms will have to write living wills, laying out their interconnectedness and liabilities in the event that they fail. It also envisions using the bankruptcy court for all but the biggest firms, with the Treasury, FDIC and Federal Reserve needing to act affirmatively to use resolution authority on a failing firm, instead of simply letting it go into bankruptcy court.

Plus, just like the House version, Dodd’s bill would levy a fee on big financial institutions (those with more than $50 billion in assets, as well as those deemed systemically risky) to build up a fund that will be tapped in the event that resolution needs to occur. The Senate bill also explicitly states that the fund can only be used to liquidate a firm, and “not for the purpose of preserving the covered financial company.” Even CNBC’s Larry Kudlow — who thinks that everything Congress does preserves too-big-to-fail — is impressed by Dodd’s work.

Now, at the end of the day, all of this is meaningless if regulators aren’t willing to pull the trigger and actually use resolution authority when faced with the impending failure of a big firm. But that’s going to be true no matter what the bill says. Dodd’s legislation isn’t perfect, but on this piece, he does seem to have thought through a workable way to ensure that firms have a hard time becoming gigantic, and have no expectation of a taxpayer funded bailout, regardless of their size.

The Hill reported today that student loan companies are “mounting a final push to keep an overhaul of the industry embraced by the Obama administration and congressional Democrats out of the larger healthcare reform package.” The Student Aid and Fiscal Responsibility Act (SAFRA) was passed by the House last year, and is currently included in the reconciliation package that both chambers are crafting to get health care reform across the finish line.

SAFRA would cut billions of dollars in corporate welfare by ending the subsidies that private loan companies currently receive to originate student loans. Instead, origination would be done directly by the government, with the loans serviced by private companies. But the current setup is a sweet deal for the lenders — as they receive taxpayer dollars to act as middlemen between the government and students — so they are fighting hard to keep it in place, led by the lobbying machine of Sallie Mae.

One of their main arguments is that ending subsidies will be a job killer. (In fact, Sallie Mae CFO John Remondi has said that the Center for American Progress team inappropriately scoffs at the job loss that will occur if SAFRA passes). Yesterday, in the House Budget Committee’s markup of the reconciliation bill, opponents of SAFRA in both parties seized on this line of reasoning:

Rep. Greg Harper (R-MS): I think schools would prefer to have private companies provide guaranteed loans…If we eliminate the current guaranteed lending program, you will see tens of thousands of jobs lost in the private sector.

Rep. Allen Boyd (D-FL): The implementation of this switch to direct lending could prove detrimental to thousands of employees that serve in the current student loan industry throughout the country. I’ll have to confess that about 700 of those are in the district that I happen to represent, employed by Sallie Mae.

Watch it:

A spokesman for House Minority Leader John Boehner (R-OH) jumped on the bandwagon today as well, writing that the “government takeover” of student lending would “eliminate choice, competition, and innovation from student lending – while killing jobs (up to 35,000 in all 50 states).”

This is all fearmongering that has little basis in reality. For starters, Boehner’s 35,000 number represents literally every student lending job in the country. For that much job loss to occur, every single position at every single company would have to vanish. No one seriously thinks that will happen.

In fact, under SAFRA, student loan companies will have to build up the servicing portion of their business, to meet growing loan demand. Sallie Mae has already brought servicing jobs back to the United States from overseas in anticipation of this. So while it’s possible that some jobs at these companies may disappear, it won’t be nearly as many as SAFRA opponents claim. Plus, as Pedro de la Torre pointed out, outside of the lenders, “SAFRA will probably be a net job creator”:

In addition to providing more financial aid to students, the bill invests billions in school construction and modernization, grants for programs to increase college access and completion, early learning programs, community colleges, minority-serving institutions and more. These investments will save and create jobs across the country.

In light of all this, let’s recognize the congressmen’s statements for what they are: a defense of wasting taxpayer money on loan companies that add no value to the educational experience.