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House Education Chairman Takes Big Donation From For-Profit Colleges, Vows To Undo Proposed Regulations

The for-profit college industry — which is composed of schools like the University of Phoenix and Kaplan University — has been going all out to prevent new regulation proposed by the Department of Education from ever coming online. They have bought a phalanx of high-profile lobbyists and have been running a slew of ads.

But no public policy offensive is complete without some allies in the halls of Congress. And as the Minneapolis Star-Tribune reported, for-profit schools have found a friend in House Education Committee Chairman John Kline (R-MN):

In the 2009-2010 election cycle the industry donated millions of dollars to the campaigns and political action committees of nearly 100 Democratic and Republican congressional candidates. More than $100,000 went to Rep. John Kline of Minnesota’s Second District, the new Republican chairman of the House Education Committee. “Congressman Kline is deeply involved in these issues,” said Kent Jenkins, communications chief of Corinthian Colleges Inc., a publicly traded for-profit college group that gave $15,750 to Kline’s political action committee. [...]

Kline vows to pass legislation with bipartisan support to undo or neuter gainful employment regulations if the U.S. Department of Education implements them. “We’ve looked at the regulations, and they’re not just aimed at bad actors,” he said. “They’re aimed at everyone.”

The proposed regulations would cause for-profit schools to lose their access to public money if their graduates fail to meet a certain debt-to-income ratio or have high rates of student loan default. The proposals arose because students who attend for-profits are using an increasing amount of federal student aid, while accounting for a disproportionate amount of student loan defaults (even as the schools reap profit margins of 30 percent and pay their executives huge salaries).

Evidence suggests that the schools mislead students with outsized promises of future earnings, while actually leaving them buried in debt and with bleak job prospects. Sen. Tom Harkin (D-IA) even put together a report finding that for-profit colleges scammed $521 million from U.S. taxpayers “by recruiting armed-services members and veterans through misleading marketing.”

A new report released this week by the National Consumer Law Center also notes that for-profit schools are making in-house loans to students, even though the schools know will never be repaid, as a gambit to keep federal funding flowing:

Many for-profit (or proprietary) schools have begun making costly private student loans knowing in many cases that more than half of these loans will never be repaid...The schools seem to view these “institutional loans” as loss leaders to keep the federal dollars flowing. Among other reasons, proprietary schools must show that at least 10% of revenues come from sources other than Department of Education federal student assistance. Schools make unaffordable loans as a way of filling up the 10% category with vapor revenues derived from loans that will never be repaid.

The NCLC said that these in-house loans are essentially predatory. The regulations propose by the Department of Education would require this industry to clean up its act, but instead of simply complying, they’re attempting to push the levers of power in the Capitol to prevent the regulations from being enacted.

House Budget Committee Chairman Ryan Announces Phantom Spending Cuts

Today, House Budget Committee Chairman Paul Ryan (R-WI) — who was endowed by the House Republican majority with the power to unilaterally set spending limits that are binding on the House — released his envisioned spending level for the remainder of the fiscal year. House Republicans have been torn internally over how much Ryan should cut, with the leadership pushing for something in the realm of $50 billion, while others wanted the GOP to stick to its initial “Pledge to America” total of $100 billion in cuts.

Ryan, seeming to think that splitting the difference would suffice, proudly announced that his chosen budget level amounts to $74 billion in cuts:

Pursuant to House Rules H.Res. 5 and spending reduction resolution H.Res. 38, the Budget Committee Chairman will file an allocation to set 2011 discretionary budget authority (BA) at $1,055 billion, which will produce savings of $74 billion compared to the President’s request.

However, there’s much less to this than meets the eye. Notice that Ryan is comparing his chosen budget baseline “to the President’s request.” However, President Obama’s 2011 budget request was never acted upon by Congress, which instead chose to enact a continuing resolution funding the government at the 2010 level. So Ryan’s $74 billion in cuts are, in reality, closer to $30-35 billion, since part of his savings come from cutting spending increases that were never made:

After deliberating for weeks, Ryan said today he and other Republican leaders will propose cutting the portion of the fiscal 2011 budget funding non-security-related discretionary programs by $43 billion from 2010 levels. At the same time, they plan to boost spending this year on defense, homeland security and veterans programs by $8 billion…Compared to what Obama requested, the savings outlined today by Ryan would amount to $74 billion.

Ultimately, “the new cap on appropriations to be filed next week will set a 2011 ceiling of $1.055 trillion — $32 billion less than the latest CBO score of $1.087 trillion.” Ryan is evidently a little touchy about people pointing out his phantom budget reductions:

Even these cuts, if they’re focused on key investments or programs that promote economic competitiveness or education, could do real economic damage. The Economic Policy Institute has found that Ryan’s original plan to reduce non-defense discretionary spending to the 2008 level would cause the loss of 600,000 jobs.

Wicker Uses Bogus Arguments To Justify Amendment Preventing TSA Employees From Unionizing

Sen. Roger Wicker (R-MS)

The Senate is in the process of putting together a bill reauthorizing the Federal Aviation Administration, but it’s become a catch-all for a series of non-related amendments that Senate Republicans are using to score political points. For instance, an amendment repealing the Affordable Care Act was proposed, as was an amendment with Sen. Pat Toomey’s (R-PA) cockamamie “default by a different name” plan.

Yet another amendment, proposed by Sen. Roger Wicker (R-MS), would prevent the Transportation Security Administration (TSA) from unionizing. Here’s the text. Wicker claims that unionizing would somehow prevent TSA officials from doing their jobs:

“Safeguarding America’s transportation requires both vigilance and flexibility,” Wicker said. “Burdensome and costly union demands could limit the ability of those responsible for security at some of the most high-risk targets to do their job.

Wicker didn’t explain how allowing TSA employees to collectively bargain for better wages and benefits would limit their ability to effectively man their posts. But this is nothing new for the GOP, which has turned whacking TSA unionization into a sort of sport. In fact, Sen. Jim DeMint (R-SC) single-handedly scuttled one of the Obama administration’s nominees for the TSA director because he may have been sympathetic to the agency unionizing.

As Art Levine pointed out at Truthout, the Republican claim that unionization necessarily impairs those dealing with security doesn’t hold water:

Indeed, the Homeland Security Department’s customs and border patrol officers who regularly face criminals are already unionized, with no sign of the common right-wing mythology about union members: there are no goldbrickers loafing back at the union hall while drug smugglers and border-crossing terrorists are being ignored.

Remember, it was unionized pilots and flight attendants that successfully landed and evacuated a jet in the Hudson river without any loss of life, and it was unionized sailors who helped successfully fend off an attack on an American ship by Somali pirates. These examples would seem to refute Wicker’s point that union members can’t function in a crisis.

TSA employees have tentatively scheduled a vote to join the American Federation of Government Employees for March, so Wicker’s amendment would prevent these workers from making their own decision about whether or not the join a union. If its accepted, the amendment would also be a double-whammy for working people, as a provision in last year’s FAA reauthorization that would have ended unfair treatment of FedEx drivers was dropped in this year’s version.

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