New Programs, More Spending in Student Aid 'Deficit Reduction' Bill
On the same day the Federal Reserve Chairman was warning Congress about Federal spending and deficits, the Education and Labor Committee reported legislation that:
As reported on 21 July 2009, the Student Aid and Financial Responsibility Act (H.R. 3221) results in a net increase of $5.7 billion in spending, when its full costs are taken into account. The official estimate by the Congressional Budget Office [CBO] shows the bill yields net mandatory savings of $7.8 billion. But the measure also requires $13.5 billion in additional discretionary spending to administer the new government-run direct lending program, thereby resulting in the $5.7-billion net spending increase.1 But the real costs of the legislation are likely to be even higher, because the measure assumes its new entitlements will sunset at various dates. If these sunsets do not occur, CBO estimates the bill will increase the deficit by $39 billion.