Marketplace

Michael Dannenberg in APM's Marketplace | Student Loans Are Getting Whacked

Communications — Thu, 17 Apr 2008 11:50:00 -0400

New America in the News:

APM's Marketplace | Student Loans Are Getting Whacked

Bank of America and a unit of Citigroup have joined a growing list of lenders cutting back on student loan programs. At the same time, the House passed an emergency bill that would enable lenders to have more cash to keep making loans. John Dimsdale reports.

TESS VIGELAND: OK, here's another side-effect of the credit crunch: Student loans are getting whacked. Today Bank of America and a unit of Citigroup joined a growing list of lenders cutting back on student loan programs. Also today the House passed an emergency bill to give the Education Department more authority to buy up student loans. That way, presumably, lenders would have more cash to keep making them. John Dimsdale reports from Washington.

JOHN DIMSDALE: Today the Bank of America joined the dozens of lenders who've recently withdrawn from the federally-guaranteed student loan business. Yesterday, the nation's largest student lender, Sallie Mae, announced a $133 million loss in the first quarter of this year. That compares to more than $100 million in profits last year. But the editor of HigherEdWatch.Org, Michael Dannenberg, isn't worried yet.

MICHAEL DANNENBERG (Director of the Education Policy Program at the New America Foundation): There are a couple thousand student loan providers -- federal student loan providers. There are two fail-safe systems in place. There's definitely a crisis for some individual lenders, but that's different from actual students. Theoretically, something very bad could happen down the road, but we're not there yet. . .

Marketplace Interviews Maya MacGuineas on 2008 Budget

Communications — Wed, 16 May 2007 13:54:00 -0400

New America in the News:

KAI RYSSDAL: The actual dollar amount's $2.9 trillion, give or take a couple of million. An 11 percent boost for the Pentagon next year. About 5 percent on average for some of the other cabinet agencies. Congressional Democrats are also promising a budget surplus by 2012.

We've called Maya MacGuineas at the Center for a Responsible Federal Budget to help explain the details. Maya, where do the Democrats figure they're going to get all that money?

MAYA MACGUINEAS: On the revenue side, sort of the biggest issue is that they're also going to attempt to extend some of the tax cuts. And the plan there is that they're going to extend the so-called middle-class tax cuts — those for people with children, a child credit; people who are married; and the lowest tax bracket, that's been brought down to 10 percent. And the real question is how they're going to be able to offset those costs. It's going to be quite costly to make those tax cuts permanent.

RYSSDAL: Right, and what they're talking about is something called pay as you go. It's been a big thing for them since the election. How's it gonna work?

MACGUINEAS: Pay as you go has really been the main point of fiscal discipline the Democrats have rallied around. And what pay as you go means is that anytime you cut taxes or you raise spending on certain programs — and those are entitlement programs, things like Social Security and Medicare and Veterans' health care programs . . . But any increases in those areas of spending have to be offset so they won't increase the deficit. That means that any tax cut has to be offset either by other tax increases or spending reductions. So, the point that pay-go brings us to is, it doesn't fix our deficit mess, but it means that you're not allowed to make it worse...

For the complete interview, please visit the Marketplace website.

Marketplace Interviews Rick Wartzman on Health Care Reform

Communications — Mon, 07 May 2007 11:16:00 -0400

New America in the News:

KAI RYSSDAL: Health care costs are high. We all know that. But it seems they've gotten to a point where more businesses are ready to do something.

Today, a group of Fortune 500 CEOs announced their support for health care reform, as Janet Babin reports from North Carolina Public Radio.

JANET BABIN: Safeway CEO Steve Burd created the business coalition...He says that by next year, the average Fortune 500 company will face employee health care bills that exceed its net income...

STEVE BURD:The Coalition mission: mandatory market-based health insurance with no exclusions for pre-existing conditions, financial assistance for low income people...

But while Burd and his coalition try to reinvent health care, many of his own company's hourly employees have to wait months before they can get coverage...

Rick Wartzman is a senior fellow at the New America Foundation, a public policy think tank:

RICK WARTZMAN: It's a little disingenuous on his part to be calling for universal coverage on the one hand, and then on the other hand, to have his employees wait 18 months and their families 30 months to get health coverage.

Still, Wartzman says Burd and the coalition are at least trying to find a way to extend coverage to thousands of uninsured workers...

For the complete transcript, please visit the Marketplace website.

Marketplace interviews Rajan Menon on Boris Yeltsin, Russia

Communications — Mon, 23 Apr 2007 18:27:00 -0400

New America in the News:

KAI RYSSDAL: Boris Yeltsin first truly got the West's attention in August of 1991, when he jumped up on that tank in front of the Russian Parliament building. But it wasn't until January of the following year that he really turned communism upside-down — when he lifted 75 years of Soviet price controls.

Yeltsin died today at the age of 76. And that shove that he gave Russians toward a market economy is still shaking itself out.

Rajan Menon teaches international affairs at Lehigh University. Professor, good to have you with us.

RAJAN MENON: Thank you.

RYSSDAL: A lot of the headlines today, sir, have pointed out that President Yeltsin introduced free-market reforms to the Russian economy. But if you look around the Russian economy today — with increasing state control over a number of key enterprises, and the oligarchs in the Kremlin and in Moscow — what would your vote be on how things have turned out?

MENON: Well, Yeltsin, no doubt, laid the foundation in many ways for a market economy and a democratic system. But many of the ills that we see in the Russian economic and political system today — the increasing control by the state, corruption, cronyism — all of this can be traced back to Yeltsin. Now the one difference, of course, is that whereas the Russian economy contracted severely under Yeltsin — especially after the currency crisis — under Putin, as you know, there have been year-upon-year of solid economic growth.

RYSSDAL: Why was it, then, that President Yeltsin wasn't able to do more for the Russian economy? Did he just go too fast with his reforms?

MENON: Yes, I think that was part of it. He believed that unleashing market forces would bring stability and prosperity. And when you have a system like the Soviet system, in which prices were set by the state — in which there was virtually no private property — and suddenly transform it, I think you have the foundations for a great deal of chaos. Especially when the institutional requirements for a capitalist system — sanctity of contracts, transparency and the like — were not yet in place...

For the complete interview, please visit the Marketplace website.

Marketplace Interviews Stephen Burd on Student Loan Deals

Communications — Tue, 10 Apr 2007 17:18:00 -0400

New America in the News:

KAI RYSSDAL: It's not a Wall Street scandal, but it's got the hallmarks of one. Kickbacks in return for market access. Shady dealings between marketers and banks. And no real regulations covering most of what's been going on.

Investigations into the student loan industry continue to widen. Schools and lenders are putting people on paid leave while everybody sorts things out. Today, New York Attorney General Andrew Cuomo compared his probe to the peeling of an onion. He said he's discovering layer after layer of wrong-doing.

Stephen Burd follows education policy at the New America Foundation. Mr. Burd, good to have you with us.

STEPHEN BURD: Thank you for having me.

RYSSDAL: You know, the first thing that came to my mind when this story broke was what are the rules about this? Is anything of what's been happening illegal?

BURD: Not necessarily. Particularly from the federal standpoint. Now I know that the attorney general of New York state, Andrew Cuomo, is looking at this as it applies to New York state law. But what I'm familiar with is the Federal Higher Education Act. And that act includes a very general statement barring lenders in the student loan programs from offering inducements to colleges to get student loan business. The problem is that language in the law is very general. And it's not clear that any of the allegations actually are illegal, but they do appear to raise serious questions in terms of conflicts of interest.

RYSSDAL: What does this say about the state of competition in this market? It must be reasonably cut-throat out there if banks and lenders are offering all these inducements to these college staff people to get them to sort of go behind students' backs.

BURD: It is extremely competitive right now. The dirty little secret of the federal loan program is just how concentrated it is. Only 32 lenders currently hold 90 percent of the student loan volume. And what's more, the Education Department has found that at about 300 colleges, one lender controls 99 percent of the loan volume — essentially giving those lenders monopolies on those campuses. So what's happened is new companies trying to break into the market have had to rely on unconventional means. The attorney general of New York has been questioning some of them, including revenue-sharing arrangements in which colleges get a cut of each loan that they provide to their students...

For the complete interview, please visit the Marketplace website.

Marketplace Interviews Maya MacGuineas on 2008 Budget Resolution

Communications — Thu, 29 Mar 2007 19:25:00 -0400

New America in the News:

KAI RYSSDAL: The House passed its 2008 budget resolution today. It's the first full spending package the Democrats have had a chance to build from the ground up since they took over. And it promises boosts in spending for education, health care and national security.

But Marketplace's Hillary Wicai reports from Washington, there's a $50 billion dollar question mark the majority party's trying very hard not to talk about.

HILLARY WICAI: The Democrats tout their budget as a responsible plan that puts children and family first. Speaker of the House Nancy Pelosi was emphatic in her support...

Maya MacGuineas is with the Committee for a Responsible Federal Budget. She predicts that'll be a tough one.

MAYA MACGUINEAS: I think the likely solution will have the pieces of increasing taxes on the well-off, and using that new revenue to offset lifting the alternative mimnum tax off of the backs of many of those in the middle class. Still, it's going to be hard to rejigger a tax package in a way that all of the costs are offset.

And truth be told, pay-as-you-go has a loophole...

For the complete story, please visit the Marketplace website.

'Marketplace' Interviews Maya MacGuineas on Bipartisan Budget Commission

Communications — Mon, 05 Mar 2007 16:35:00 -0500

New America in the News:

BOB MOON: A couple of senators have come up with a plan for turning back the tide of debt — a bipartisan commission with some special clout. Nancy Marshall Genzer reports.

NANCY MARSHALL GENZER: Nobody on Capitol Hill has been able to come up with a way to let the air out of ballooning budget deficits...

The chairman and ranking member of the Senate Budget Committee have agreed on the framework for a bill that would create a bi-partisan budget commission. If the legislation is approved, the new panel would be chaired by Treasury Secretary Henry Paulson, and include the heads of congressional finance and budget committees. They'd have the equivalent of congressional superpowers — so-called "fast-track" authority.

Maya MacGuineas, of the Committee for a Responsible Federal Budget, says that means limited debate, no time-consuming amendments and a straight up-or-down vote on the commission's proposals.

MAYA MACGUINEAS: The focus is to get people to say we've come up with a package that is kind of the best of all the solutions, and you have to vote yay or nay.

MacGuineas says the commission's "star power" could help it force Congress to make tough choices, such as . . . raising taxes.

MACGUINEAS: We're going to have to slow the growth in spending on both retirement benefits and health care benefits. And we're going to have to increase the revenues that support these programs. There's no real free lunches here to fixing these programs...

For the complete transcript and to listen to the interview, please visit the Marketplace website.

Marketplace Interviews Maya MacGuineas on the Fiscal 2008 Budget

Communications — Tue, 30 Jan 2007 21:50:00 -0500

New America in the News:

KAI RYSSDAL: It's called the power of the purse. The Constitution says Congress has it. Of course, the White House is free to submit its own budget request. And the president said today he'll do just that on Monday. He's promising his fiscal 2008 budget will be a big step on the way to balancing the government's books. But before that can happen lawmakers need to take care of their fiscal '07 accounting. They're hoping to do that by tomorrow. It'll be about $463 billion worth of budgetary horsetrading...

Still, Congress could be opening a Pandora's box by giving any agency more money. Maya MacGuineas of the Committee for a Responsible Federal Budget predicts the process will now bog down. She says it would have been easier to have frozen everybody's budget.

MAYA MACGUINEAS: They're really going to make this a negotiation where every involved congressman and senator has their own opinion about how much we should spend...

For the complete transcript, please visit the Marketplace website.

Marketplace Interviews Peter Harbage on State of Health Insurance

Communications — Fri, 26 Jan 2007 23:59:00 -0500

New America in the News:

This week, President Bush offered tax deductions for individuals buying health care insurance. Who does this help? Lisa Napoli does the math.

KAI RYSSDAL: There was lots of coverage this week of the president's State of the Union address. We thought today we'd zero in on one slice of what he offered up--health care. You've probably heard by now that Mr. Bush wants to change the way health benefits are taxed. The president says that ultimately it'll help more Americans afford insurance. We asked Marketplace's Lisa NAPOLI: to look into who'll actually, well, benefit.

LISA NAPOLI: Michael Saltzman knows he's a lucky guy. He not only works for himself, he's able to pay for health insurance for his family. We sat down at the Starbucks near his office to talk about it. And how much does it cost you?

MICHAEL SALTZMAN: It costs us approximately $550 a month, but that's really with a very high deductible.

NAPOLI: And has it gotten more expensive, I would imagine, over the last five years?

MICHAEL SALTZMAN: Yeah, and we've done two things. We've cut back on the deductible. It just gets higher and higher so it really doesn't pay for any out of pocket. And it just gets more expensive every year. So we're screwed both ways...

NAPOLI: Now it may be that this whole story is moot anyway since most people don't expect the president's plan will fly in its current form. Peter Harbage of the New America Foundation is one of them.

PETER HARBAGE: You know health care is very complicated. It can be very polarizing as Senator Clinton found out when she was First Lady in 1993. These are very difficult issues with a lot of money at stake.

NAPOLI: Harbage says for the president's plan to work, it needs to get at the complexity of what's causing health care costs to rise. But he admits doing that isn't going to be easy.

HARBAGE: It's taken us 40 years to, you know, develop the broken system that we have now and no one's going to be able to fix it overnight...

For the complete interview and to listen to the radio show, please visit the Marketplace website.

Marketplace Interviews Maya MacGuineas on the Bush Budget

Communications — Thu, 04 Jan 2007 01:38:00 -0500

New America in the News:

KAI RYSSDAL: President Bush wasn't about to let the day pass unnoticed. In fact, he got a jump on the Democrats with an op-ed in today's Wall Street Journal. And with some remarks to television cameras this morning. Bipartisanship got a nod. He mentioned how he looks forward to working with the other party. And then the president said some things about the economy that deserve a closer look.

So we called Maya MacGuineas. She's the director of the fiscal policy program at the New America Foundation. Maya, good to talk with you...

RYSSDAL: First question to you, Maya, is: Have they cut the deficit in half, as the President says?

MACGUINEAS: Well, it's kind of a tricky game of semantics there. By the standards that they set, they cut the deficit in half. Which means the deficit is half of what they were projecting it would be. But it turns out that their projections that they put forth were actually not correct. And the second kind of tricky part is that they were claiming it's cut in half as a share of the economy. But if you look at the basic numbers, where the deficit was and then where it is today, no it is not yet cut in half of where it was when he first made that promise. But the numbers have been coming down. They're moving in the right direction. I would say they're not moving there quickly enough...

RYSSDAL: Alright. He talked a little bit about his upcoming budget, too. Let's listen to that:

PRESIDENT BUSH: Next month I will present a five-year budget proposal that will balance the federal budget by 2012. This budget will restrain spending, while setting priorities.

RYSSDAL: What's he going to have to do, Maya, to get that done?

MACGUINEAS: Well, it's a good promise. It's not even an overly aggressive promise. It is really quite possible that the budget will be balanced by 2012. But the things to look for are, is his budget going to include all of the things that, one, we know will be there? For instance, will it include the spending on the war and operations in Afghanistan and Iraq. Two, will it include all the other things he has said he would like to have as part of public policy? Meaning, Social Security reform, or fixing the Alternative Minimum Tax, or making the tax cuts permanent. And three, is it realistic? If he kind of plays games with the budget by promising to keep certain parts of it very low, beyond what we've ever seen — knowing that Congress will then go in and boost up those spending numbers — then it's not really credible.

But the bottom line is, I think getting the deficit eliminated by 2012 is quite doable if you have both parties working together. But one of the real challenges is, we should actually be running budget surpluses long before 2012 in order to prepare for the upcoming retirement of the Baby Boom. So even that goal's not as aggressive as it should be...

For the complete interview, please visit the Marketplace website.