After a marathon, overnight session of Democrats handily defeating dozens of GOP amendments one after the other, the Senate passed the reconciliation bill. However, the Senate parliamentarian ruled that a couple of very minor provisions related to Pell Grants (remember this bill covers student loan reform as well) had to be stricken, so the House must pass it again. But this is will be easily done later today so it is no big deal. After that, President Obama will sign it into law as he did the main bill on Tuesday.

After a long debate (and I’m not just talking about today’s crazy floor proceedings given how long this has gone on!), the House of Representatives has passed both the Senate’s health care reform bill, which goes immediately to President Obama to be signed into law, and a reconciliation bill full of fixes that the House wanted. You can read a good summary of the details here. The reconciliation bill would also drastically reform student loan programs by completely removing private lender middlemen from the process. Special kudos go to Speaker Pelosi for getting her caucus together, though the White House also had to promise an executive order to get pro-life Dems in line.

The Senate will take up the reconciliation bill on Tuesday and hopefully pass it this week. If that happens, it will be a historic victory for President Obama and Democrats, and, well, all Americans who desperately needed a change from the status quo of our current health care system.

Congress is actually passing stuff again! Though still not health care.

The House of Representatives voted for the biggest overhaul of federal student loan programs since their creation; the measure ends subsidies for private lenders, boosts Pell Grants for needy students and creates grant programs to improve community colleges and college graduation rates. The House also passed a resolution of disapproval for Rep. Joe Wilson’s “You lie!” outburst during President Obama’s speech to Congress.

The Senate passed a big boost in spending for housing and transportation projects, and to allow guns on Amtrak.

And, yeah, both houses voted to defund ACORN to appease paranoid conservatives.

The House of Representatives passed funding for high-speed rail projects, lifted a stupid ban on using taxpayer dollars for needle exchange programs for intravenous drug users, and passed a measure to require PAYGO, or “pay-as-you-go” budget rules. House committees approved bills to Puerto Ricans decide their island’s political status and to shift student loan lending from FFELP to the Department of Education’s Direct Loan program instead per President Obama’s request.

The Senate approved a defense spending bill that includes the F-22 and alternate F-35 engine cuts that President Obama and the Pentagon wanted. The Senate also rejected an amendment to would have let people carry hidden guns in 48 states if they have a concealed weapon permit in any one of them. Differences now need to be resolved with the House.

As for health care, Senate Majority Leader Harry Reid says the Senate will miss the August deadline for a vote on legislation and it will be postponed until September. The House may vote next week (or not), but work is still ongoing. The White House isn’t happy, of course, but still hopeful.

1. Gay marriage activists hope the Vermont legislature’s decision to legalize gay marriage will provide impetus to other states to do the same. This is true at least in D.C., which voted to recognize gay marriages in other states. On the other side of the world though in Iraq, gays and lesbians find that their lives are endangered because of their sexuality.

2. Small towns, suckered by investment bankers who sold them risky municipal bond derivatives.

3. Peru’s Ex-President Alberto Fujimora is convicted and sentenced to twenty-five years in prison for human rights abuses that occurred during the war against Maoist rebels Shining Path.

4. More details on the prosecutorial misconduct that undid the Ted Stevens prosecution. And McClatchy has another article on Judge Emmett Sullivan, who has “declared war” on what he sees to be a rising tide of government prosecutorial secrecy, incompetence and malfeasance.

5. Texas Republican lawmakers find themselves at odds with Gov. Rick Perry over a number of issues beyond stimulus funding. Texas Republicans are apparently not as receptive to marching orders as Congressional Republicans were during the Bush administration.

6. Former Australian government officials and academics applaud Obama’s commitment to rid the world of nuclear weapons.
Anne Applebaum says there are other more important priorities that Obama should focus on, but it seems to me that getting rid of nuclear weapons never seems to be worthwhile until somebody’s threatening to use one. Why wait until we reach that point?

7. Michael Gerson, being a moron again, characterizes Obama as “the most polarizing President” in history. In fact, Obama is a broadly popular President among Americans, and is most vociferously opposed by a loud minority contingent of right-wing lunatics and Republicans who think the key to electoral victory is saying no to everything Obama proposes.

8. Al Franken emerges victorious in the re-count, but Coleman signals further appeals are on the way.

9. Student loan defaults are surging, which may increase calls for a student loan “bailout.”

10. American intelligence officials warn that the United States’ electrical grid has been infiltrated by hackers from China and Russia who may be looking to launch cyber attacks against the United States infrastructure in the event of military conflict. I remember a 2003 Frontline special warning of this very thing, a warning that appears to be coming true.

A little bit older, but Xanthippas and I were talking about this and he said I should blog it (which advice I take about 10% of the time or less).

From Kevin Drum:

The student loan market is a mess, and it’s mainly a mess because the federal student loan program is woefully inadequate.

Follow the link to read the rest, it’s worth it. The fact that higher education is too expensive for some people is ridiculous, as is the fact that it leaves most of us in debt that it takes years or decades to pay off.

Here’s Xanthippas’ and my thoughts on the subject:

X: Milton Friedman was a huge proponent of allowing people to borrow to attend college. He thought we should loosen restrictions on how much people can borrow to attend school, and make it easier to borrow. I read one of his books back in college and that idea has stuck with me ever since. But like a lot of people who seem to think that we can privatize everything, including personal funding for a college education, he failed to recognize that banks and corporations are full of assholes who will rip people off, and colleges will continuously raise tuition even as our economy shrinks and degrees become less valuable.

N: You know, many people make the argument that public institutions are more expensive and less successful than private ones, but I’d like to point out that we have the finest military in the world, which is completely publicly finananced and not for profit. For some reason, free-marketers think that making an institution for-profit will somehow garner better results, when in reality what happens is that you get a system that serves the elites well while the poor take what little public help is left. People should at least be able to take the number of hours it takes to get one degree without going into debt. Is our concern that somehow these people would be “cheating” the rest of us by taking tax money? I don’t see how it would be any different from public primary education. Does every kid steal from us because we spend taxes educating them for twelve years? Well, not if you consider that every person is an investment in the future of this nation.

I’m not advocating that we just pour money into our existing education system. Colleges are over-priced for what they actually deliver and associated fees and textbooks significantly inflate an already painful tuition. But just because it may not be the best system it could be does not mean that it’s time to scrap public subsidies of education. We need to get some of the smart college graduates to figure out how to fix this problem.

The Senate passed legislation to let the State Department settle all remaining lawsuits against Libya by U.S. terror victims but remained deadlocked over legislation to rein in excessive energy speculation (which also failed in the House).

The House passed several bills including one to help protect college students against lending abuses, enforce pay equity, require the FDA regulate tobacco, and boost veterans spending. The House Judiciary Committee also voted to cite Karl Rove for contempt of Congress.

Of course as readers of TWM know, we believe in a healthy skepticism of anything the federal government has to say which contradicts obvious reality. This includes such memes as “The war in Iraq is actually going well”, “Afghanistan is actually under control”, “The President is a firm believer in the Constitution”, etc. But when they give you solid numbers you can trust them, right? When they tell you that unemployment is up to 5.5% from a historic low of 4.5%, you think “Well, maybe that 1% isn’t that bad.” Or that the CPI (consumer price index) is 2.8, only marginally above its average historic level. Well, not quite. Not exactly. See, the government has all the numbers, and you can indeed get all the numbers. But what the government does first is transform them. Now transforming numbers is not necessarily an evil thing. I work with data quite a bit myself and I can tell you that raw numbers don’t mean an awful lot by themselves. You have to turn it into some quantity that’s both useful and understandable. Of course, numbers sometimes say things you don’t want them to. That’s when you use statistics to cover up the truth. As the saying goes, “there are lies, damned lies, and statistics.” As this article from Harper’s discusses, that’s all too true.

If Washington’s harping on weapons of mass destruction was essential to buoy public support for the invasion of Iraq, the use of deceptive statistics has played its own vital role in convincing many Americans that the U.S. economy is stronger, fairer, more productive, more dominant, and richer with opportunity than it actually is.

Let me excerpt some examples:

The story starts after the inauguration of John F. Kennedy in 1961, when high jobless numbers marred the image of Camelot-on-the-Potomac and the new administration appointed a committee to weigh changes. The result, implemented a few years later, was that out-of-work Americans who had stopped looking for jobs—even if this was because none could be found—were labeled “discouraged workers” and excluded from the ranks of the unemployed, where many, if not most, of them had been previously classified.

Richard Nixon, besides continuing the unified budget, developed his own taste for statistical improvement. He proposed—albeit unsuccessfully—that the Labor Department, which prepared both seasonally adjusted and non-adjusted unemployment numbers, should just publish whichever number was lower. In a more consequential move, he asked his second Federal Reserve chairman, Arthur Burns, to develop what became an ultimately famous division between “core” inflation and headline inflation. If the Consumer Price Index was calculated by tracking a bundle of prices, so-called core inflation would simply exclude, because of “volatility,” categories that happened to be troublesome: at that time, food and energy.

In 1983, under the Reagan Administration, inflation was further finagled when the Bureau of Labor Statistics decided that housing, too, was overstating the Consumer Price Index; the BLS substituted an entirely different “Owner Equivalent Rent” measurement, based on what a homeowner might get for renting his or her house. This methodology, controversial at the time but still in place today, simply sidestepped what was happening in the real world of homeowner costs. Because low inflation encourages low interest rates, which in turn make it much easier to borrow money, the BLS’s decision no doubt encouraged, during the late 1980s, the large and often speculative expansion in private debt—much of which involved real estate, and some of which went spectacularly bad between 1989 and 1992 in the savings-and-loan, real estate, and junk-bond scandals. Also, on the unemployment front, as Austan Goolsbee pointed out in his New York Times op-ed, the Reagan Administration further trimmed the number by reclassifying members of the military as “employed” instead of outside the labor force.

And the result of these distortions are thus:

Most of the people tired of looking for work, as mentioned above, are no longer counted in the workforce, though they do still show up in one of the auxiliary unemployment numbers. The BLS has six different regular jobless measurements—U-1, U-2, U-3 (the one routinely cited), U-4, U-5, and U-6. In January 2008, the U-4 to U-6 series produced unemployment numbers ranging from 5.2 percent to 9.0 percent, all above the “official” number.

“All in all,” Williams points out, “if you were to peel back changes that were made in the CPI going back to the Carter years, you’d see that the CPI would now be 3.5 percent to 4 percent higher”—meaning that, because of lost CPI increases, Social Security checks would be 70 percent greater than they currently are.

To sum it up:

The real numbers, to most economically minded Americans, would be a face full of cold water. Based on the criteria in place a quarter century ago, today’s U.S. unemployment rate is somewhere between 9 percent and 12 percent; the inflation rate is as high as 7 or even 10 percent; economic growth since the recession of 2001 has been mediocre, despite a huge surge in the wealth and incomes of the superrich, and we are falling back into recession.

What would change if these statistics were cited instead of the whitewashed ones our government puts out? Well, there’d certainly be an even greater demand for change. There’s quite a focus on the economy right now, but even now most proposed policies don’t address our fundamental problems. A proposed bailout of Fanny Mae and Freddie Mac won’t actually bring any more liquidity to an economy that was only still growing because of the massive debt we allowed to rack up. An economy pegged to consumer spending requires the kind of steady purchasing power that the average American doesn’t have, but has been convinced they have through the easy availability of credit. It’s a self-feeding cycle, as Americans are both required to have credit to make large purchases and convinced that taking out large lines of credit is safe. Which it is…until somebody realizes that the whole structure of the economy is actually built on sand.

Our economy is, in reality, a very, very complex maze of interactions and money. It is possible, however, to understand some points about it without difficulty. Believe it or not, there was once a time when people bought homes and cars for straight cash. That’s not even possible for the average American now, when home prices are at least 4 times the amount we make in a year. And certainly nobody’s entire yearly income is disposable, which is why it takes some 20 years to pay off a house depending on the loan terms you get. Or 5 years for a car, or 2 years for a washer and dryer, etc, etc. We can’t actually afford the luxury we live in. If credit wasn’t available (either through a store or credit card), how many of those large-screen lcd tvs would have sold by now? The question is why can’t we afford these things? What’s the root of the problem?

One part is that Americans’ average earnings have not kept up with inflation. This may be due somewhat to the fact that inflation is under-reported. Wages are not really pegged to an actual cost of living, except in that businesses should pay enough to keep personnel from jumping ship. Minimum wage is supposed to be, of course, but it’s obvious that whatever calculation they used to come up with the figure for minimum wage, it did not come up with an actual living wage. This also reflects the continuing growth of the gap between the top earners in America and everybody else. I’d have to say that concentration of wealth at the top is a natural occurrence at least in our capitalist society, if not an attribute of capitalism itself. Obviously we need to redirect this money from on high to down low. Before anybody starts labeling me a commie, let me state that this doesn’t need to be literally taking money from the rich and giving to the poor. I’d say that taking money from the rich is fine since they get it off the backs of the working class, but putting money itself in the hands of the poorest probably isn’t very effective.

Another problem is our reliance on credit. That seems to be undergoing a “correction” as economists call it, i.e. the subprime mortgage housing crisis. Ripples from that collapse are still spreading out. It has reached all the way into student loans. How can we end this dependency? It’s easy for your credit counselors to tell you “cut up those cards!” and that is a good beginning…but what if you absolutely need a car now? What if you can’t even come up with $3,000 to buy a car outright? It may be called an auto loan, but it’s credit just the same. And even more so housing. I’m not very happy about the idea that I’ll either pay too much in rent to live in a decent area or owe for 20 years to live in a house which has no safety net. I think we have to make it so that no matter what, as long as you’re willing to work you never slip through the cracks. Mass transit in the case of cars, and perhaps mass housing in the case of houses.

I don’t think there’s any obvious, easy answer. I can’t tell you what to tax to move the most money from those that don’t need it to those that do, but I do believe we can do more than we have been. It’s not supposed to be our burden to provide all the answers anyway. Progressives have always believed that the government can be used as a tool to solve these kinds of social problems anyway. This is certainly a problem that needs to be presented to the government.

Both chambers of Congress and President Bush gave approval to legislation this week aimed at ensuring the problems in the credit markets don’t prevent students from getting college loans by, for one, increasing the limit on how much borrowers can receive in federally subsidized student loans.

Congress also approved a bill, which Bush will sign, that bans employers and insurance companies from using genetic tests showing people are at risk of developing cancer, heart disease or other ailments to reject their job applications, promotions or health care coverage, or in setting premiums.

The House of Representatives passed the Jubilee Act, 285-132, which expands by some 25 countries the list of those poorest states eligible for debt relief, allowing them to divert scarce resources from loan repayment to health and education programs. The White House opposes the bill, but has not issues a veto threat. The House also overwhelmingly approved, 383-27, a bill calling for federal intervention to stabilize the student loan market amid turmoil brought on by the mortgage crisis. A bill similar to the House’s is pending in the Senate, and the White House has voiced support for many of the provisions.

The Senate, meanwhile, voted 63-29 to direct the Justice Department to probe how a Florida road project made its way into a 2005 highway spending bill after the House and Senate voted on what lawmakers thought was the final version of the bill.