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Incoming Education Chairman On Regulating Higher Education Profiteers: ‘I Don’t Think So’

Rep. John Kline (R-MN)

One of the Obama administration’s higher education initiatives has been to take a hard look at for-profit colleges like Strayer University and the University of Phoenix. This scrutiny is well-founded, as for-profit colleges are taking in a growing number of students and an ever increasing amount of federal student aid, while also accounting for a disproportionate amount of student loan defaults.

Sen. Tom Harkin (D-IA) — who chairs the Senate Education Committee — has said that he is going to try and implement stricter regulations against these schools. But the incoming GOP chairman of the House Education and Labor Committee, Rep. John Kline (R-MN), told Reuters that “he would oppose such an effort”:

“I would push back really hard against a bill that might come out of Chairman Harkin’s committee.” Asked if such a bill could succeed, Kline said: “I don’t think so.”

For a sense of what kind of an industry Kline is protecting, consider that, currently, “eleven percent of all higher-education students are enrolled in for-profits, but they receive 26 percent of federal student loans and account for 43 percent of defaulters.” The graduation rate for first-time, full-time candidates at for-profit colleges is 22 percent; it’s 55 percent at state colleges and 65 percent at private non-profit universities.

As McClatchy reported, for-profit schools have been accused of “recruiting students with inflated promises, fudging financial-aid applications and leaving graduates with crushing debt and bleak job prospects.” According to the Pew Research Center, “one-quarter (24%) of 2008 bachelor’s degree graduates at for-profit schools borrowed more than $40,000, compared with 5% of graduates at public institutions and 14% at not-for-profit schools.”

Not only are some for-profit colleges leaving students crippled with debt and unemployed, but they’re doing it while lining their executives’ pockets with taxpayer dollars. Harkin put together a report finding that for-profit colleges even scammed $521 million from the U.S. taxpayer “by recruiting armed-services members and veterans through misleading marketing.”

For the record, before he’s even picked up the Education and Labor Committee gavel, Kline has expressed a desire to deny unemployed workers jobless benefits, punt on new mine safety regulations, and cut student loans. Ignoring abuses in the for-profit college industry would just be icing on the cake.

Update

At College Guide, Daniel Luzer notes that Kline “was a little unclear on what he thought was wrong with regulations that would limit the ability of for-profit colleges to take advantage of federal financial aid if they saddle their students with too much debt.”

Congressional GOP Seeks To Kill Successful Stimulus Program, As GOP Governors Take Majority Of Its Funds

Today, the Senate will begin voting on the tax deal that President Obama negotiated with Congressional Republicans. Since it was first announced, the legislation has become loaded down with a variety of other tax initiatives that were not part of the original talks, such as ethanol tax credits and commuter subsidies.

Missing from the package, however, is an extension of the soon-to-expire Build America Bonds (BABs) program, a stimulus program enabling states to initiate infrastructure projects (and create jobs) that they otherwise wouldn’t have, given their budget woes. A BABs extension was not included in the deal due to the staunch opposition of Republicans. “We have a very firm line on BABs — we are not going to allow them to be included,” a congressional Republican aide told Reuters.

But before they complete their quest to kill the program, Republicans might want to check in on who it’s helping. According to a new report from the Center on Law and Public Finance, 53 percent of the money issued under the program has gone to finance projects in states with Republican governors:

The report also shows that “70 percent of Build America Bonds financed bipartisan projects that are physically located in more than one jurisdiction, uniting the [Congressional] districts of both Republicans and Democrats”:

Build America Bonds have been used across the country to carry out projects like the Seismic retrofit of the San Francisco-Oakland Bay Bridge, the extension of the Dallas Area Rapid Transit System, and the creation of affordable convenient options for higher education in New Jersey.

Besides helping states finance construction projects, and thus create jobs, BABs make the government more efficient and are “far more transparent than tax-exempt municipal bonds.” Allowing the program to die will not only kill funding for important investments, but as CAP’s Seth Hanlon and Jordan Eizenga noted, will provide a backdoor tax cut to wealthy investors.

Of course, as I reported back in November, Republican governors have had no qualms about benefiting from the BABs program while bad-mouthing the stimulus as a whole. But as Congressional Republicans try to kill it, it’s conservative darlings like Govs. Mitch Daniels (R-IN), Chris Christie (R-NJ), and Rick Perry (R-TX) who are tapping into it the most.

Pawlenty: ‘The Moral Case For Unions…Does Not Apply To Public Employment’

Last week, Gov.-elect John Kasich (R-OH) said that his “personal philosophy” entails no public employee ever having the right to strike. “If they want to strike, they should be fired,” Kasich said.

As Tanya Somanader pointed out, Ohio public safety employees are not allowed to strike, but Kasich also wants to eliminate alternatives to striking that those workers were afforded by a 1983 collective bargaining law, so “not only would Kasich like to fire any police officer or firefighter for a right they are not given, he wants to eliminate the only remaining tool they have as a viable alternative.”

But Kasich is not the only Republican governor who casually dismisses the notion that public employees should be afforded worker’s rights. In a Wall Street Journal op-ed today, Gov. Tim Pawlenty (R-MN) wrote that the moral case for unions “does not apply to public employment”:

The moral case for unions — protecting working families from exploitation — does not apply to public employment. Government employees today are among the most protected, well-paid employees in the country. Ironically, public-sector unions have become the exploiters, and working families once again need someone to stand up for them.

Throughout the op-ed, Pawlenty also perpetuates the myth that government employees are being paid significantly more than their private-sector counterparts. According to data from the U.S. Office of Personnel Management, federal workers actually earn 22 percent less than comparable private sector workers. Research by Harvard economist George Borjas shows that, at the top-end, private sector pay is so much better that the public sector has “found it increasingly more difficult to attract and retain high-skill workers.”

Pawlenty’s simplistic view of unions is really the focus of the piece, though. First, it’s folly to think, as Pawlenty seems to, that government employees can’t be exploited on the job. Just last month, In These Times released a report showing that The Department of Veterans Affairs “is paying some of its employees — including veterans — close to poverty wages.”

But unions are about much more than simply protecting workers from exploitation. Workers unionize so that they have a voice on the job, can collectively bargain for better wages and benefits, and to push for policies that will ensure that they and their families share in the fruits of their labor. It’s no surprise that as unionization has declined, wages have stagnated, even as productivity soared.

It’s become the meme of the moment to bash public employees — with Gov. Mitch Daniels (R-IN) disparaging them as a “new privileged class” — and even President Obama bought into it with his misguided federal pay freeze. But to say that these workers shouldn’t be afforded the rights to organize for better pay, benefits, and work conditions simply because they work for the government is another step altogether, as Pawlenty plays for the support of the far-right.

Incoming Financial Services Chairman: Washington’s Role Is ‘To Serve The Banks’

Rep. Spencer Bachus (R-AL)

During the financial reform debate, Rep. Spencer Bachus (R-AL) — who will become chairman of the House Financial Services Committee in the 112th Congress — continually criticized the reform effort. He falsely characterized the legislation that ultimately became the Dodd-Frank financial reform law as creating “permanent bailout authority,” and he staunchly opposed the creation of the new Consumer Financial Protection Bureau.

Now that he’ll be taking the Financial Services committee gavel, Bachus has telegraphed his intention to weaken some of the bill’s most important sections, including derivatives reform and rules meant to prevent banks from making risky trades with federally insured dollars.

In an interview with The Birmingham News, Bachus made it clear why he opposed stricter regulations for banks in the wake of a huge financial crisis largely caused by Wall Street excess and a lack of prudent regulation. In Bachus’ estimation, the government’s role is not to protect consumers and the wider economy through regulating financial activity, but to simply “serve the banks”:

Bachus, in an interview Wednesday night, said he brings a “main street” perspective to the committee, as opposed to Wall Street. “In Washington, the view is that the banks are to be regulated, and my view is that Washington and the regulators are there to serve the banks,” he said.

According to the article, Bachus later tried to clarify that what he meant was “regulators should set the parameters in which banks operate but not micromanage them.”

Bachus is far from the only Republican on the Financial Services Committee who feels that consumers and regulators should be subservient to the banks. Rep. Jeb Hensarling (R-TX), for instance, has said that bank profits should always trump consumer protections. But rarely has a Republican lawmaker laid out so starkly just whose interests he believes Washington is supposed to be protecting.

Back in October, Bachus told a crowd of 100 financial services industry lobbyists that banks should really be making campaign contributions to Republicans, because Democrats “hammered” the banks by enacting the Dodd-Frank financial regulatory reform law. The banks responded by giving more heavily to Republicans than Democrats in the home stretch to November’s election. And it seems that Bachus is now fully prepared to give them what they paid for.

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