Back when Obama was trolling for illusory savings to manipulate Congressional Budget Office scorekeepers into decreeing that Obamacare would be revenue-neutral, he proposed the ingenious scheme whereby the federal government would subsume 100 percent of the student loan industry and eliminate evil private-sector profits going to "middlemen."
The plan was a smorgasbord for big-government enthusiasts because it envisioned whacking private business, legislative trickery and growing the government in numerous ways. It wouldn't just allow the government to seize financial business in grand fascist style; it also gave Obama an excuse to expand the existing loan program.
By calculating $60 billion in savings over the next decade, Obama gleefully inflated student loans by $40 billion and boasted that he still had $20 billion left over to count toward reconciling the balance sheet on his grossly over-budgeted national health care bill.
Obama smuggled this student loan legislation into the Obamacare bill because it probably never would have otherwise attracted the 60 needed votes to pass on its own. Such relatively small-potatoes legislation, by itself, wouldn't have supported the bribes Obama used to cram through Obamacare.
One such Obamacare bribe, included in the student loan section of the bill, was a hidden payoff to North Dakota Democrat Kent Conrad, chairman of the Senate Budget Committee. The bill established, in the words of the CBO, "a new program for lenders who were chartered before July 1, 2009, and are owned by a state under the control of a board including the governor and offered guaranteed loans prior to June 30, 2010." This was crafted to apply to just one lender: the Bank of North Dakota. So much for open, honest government.
If all this weren't offensive enough, the Obama administration initiated the process to transition toward the new student loan program some six months before the bill passed. Education Secretary Arne Duncan sent letters pressuring colleges and universities to prepare for the transition, even though many were reluctant and had chosen private lenders over the government option for a reason.
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