DeSaulnier bill would lower student loan rates

Student loan borrowers would be able to refinance their interest rates at the rate offered to banks by the Federal Reserve, under a bill announced Monday by Rep. Mark DeSaulnier.

DeSaulnier, D-Concord, held an event at the University of California, Berkeley to roll out H.R. 3675, the Student Borrower Fairness Act, which would offset its costs by increasing corporate tax rates on companies that pay their CEOs or highest paid employees more than 100 times the median compensation of all employees.

Mark DeSaulnier“It is patently unfair that the same big banks that toppled our economy borrow from the federal government at extremely low interest rates while student borrowers are struggling to pay back their loans,” DeSaulnier said in a news release. “Meanwhile, people of all ages are buried in student loan debt which holds them back from being able to buy a car, purchase a home, save for retirement, or start a family. This bill is a first step toward making sure our students can emerge from under their piles of crippling debt and enter tomorrow’s highly-trained workforce.”

Congress acted on student loan rates in 2013, but the changes only applied to new borrowers.

UC-Berkeley Chancellor Nicholas Dirks applauded the bill. “College students and their families depend on student loans to access higher education,” Dirks said in the congressman’s release. “At Berkeley, we are proud that 61 percent of our undergraduates graduate without debt and the average debt of students who do borrow is only $17,584, much lower than the national average. This legislation would benefit all borrowers because it will help them manage their debt and repayment.”

James Donahue, president of St. Mary’s College of California in Moraga, said his college “is built on the idea that education has the power to transform lives. The Student Borrower Fairness Act will provide opportunities for all students to pursue their dreams of a higher education, and ultimately highly successful lives. Student loan debt is a national issue and reducing it must be a national priority.”

DeSaulnier’s office said outstanding student loans now total more than $1.3 trillion, surpassing total credit card debt. More than 37 million Americans have outstanding student loan debt, with an average outstanding balance of $29,400 for those who borrowed to get a bachelor’s degree. From 2004 to 2012, student loan debt rose an average of 14 percent per year.


Bay Area Council lauds Fed nominee Janet Yellen

Janet Yellen, a professor emeritus at UC Berkeley’s Haas School of Business whom President Obama nominated Wednesday to chair the Federal Reserve Bank, was “a thoughtful and engaged member” of the Bay Area Council’s executive committee, the council said Thursday.

Summers withdraws from Fed chief consideration, Janet Yellen considered strong candidate“Janet Yellen provided an incisive voice on economic policy during her tenure with the Bay Area Council,” council president and CEO Jim Wunderman said in a news release. “Janet was an active and valuable leader … providing thoughtful and timely insights on the regional, state and national trends that were shaping our economy leading up to and entering the Great Recession.”

The Bay Area Council is a public policy advocacy organization composed of more than 275 of the nine-county region’s biggest employers. Yellen, 67, served on its executive committee from 2004 to 2010 during her tenure as president and CEO of the Federal Reserve Bank of San Francisco.

She was a frequent speaker at Bay Area Council conferences and meetings, including an April 2008 address to hundreds of CEOs and leading executives in which she shared her perspectives on the emerging financial crisis that would soon become the Great Recession. She also spoke at the 2006 Outlook Conference, discussing the forces driving the economic boom at the time and the surging housing market.


DiFi has Ben Bernanke’s back, but not Boxer

U.S. Sen. Dianne Feinstein, D-Calif., this morning expressed her support for Ben Bernanke’s re-confirmation as Federal Reserve Chairman:

“I believe it would be a mistake not to reconfirm Ben Bernanke as Chairman of the Federal Reserve. To blame one man for the financial implosion is simply wrong. It is up to the government to change the law, and I believe the Volcker Rules – all of them – should be moved through Congress promptly.

“Prudent regulation of the financial sector, combined with expanded authority for the Fed, the Commodity Futures Trading Commission and the Securities Exchange Commission, is vital.

“Ben Bernanke has been helpful to the recovery and, for reasons of stability and continuity, should be reconfirmed. I support him fully.”

U.S. Sen. Barbara Boxer, D-Calif., on Friday had taken a more populist, anti-bank stance by saying she’ll oppose the re-confirmation:

“I have a lot of respect for Federal Reserve Chairman Ben Bernanke. When the financial crisis hit in late 2008, he took some important steps to prevent what many economists believe could have been an even greater economic catastrophe.

“However, it is time for a change – it is time for Main Street to have a champion at the Fed. Dr. Bernanke played a lead role in crafting the Bush administration’s economic policies, which led to the current economic crisis. Our next Federal Reserve Chairman must represent a clean break from the failed policies of the past.”

Per the Wall Street Journal, Bernacke needs at least 60 Senators’ support because at least four senators have used a Senate rule to object to a vote. “According to a Dow Jones Newswires tally, 26 senators have said they will back him; 15 have said they will oppose him. The remaining 59 haven’t said what they will do. Under Senate rules, the earliest a vote could come is Wednesday.”


Your voices on Capitol Hill, speaking

Here’s Rep. Barbara Lee, D-Oakland, urging the House today to adopt an amendment to the National Defense Authorization Act for FY 2010 that would call for the Defense Secretary to report to Congress by Dec. 31 a comprehensive exit strategy from the war in Afghanistan:

The amendment later failed on a 138-278 vote: Lee, Pete Stark, George Miller, Jackie Speier, Anna Eshoo, Mike Honda and Lynn Woolsey voted for it; Ellen Tauscher and Jerry McNerney opposed it; and Zoe Lofgren and House Speaker Nancy Pelosi didn’t vote.

Meanwhile, Rep. Jackie Speier, D-Hillsborough, spent some quality time today grilling Federal Reserve Chairman Ben Bernanke during a House Oversight and Government Reform Committee hearing:


Pelosi, Miller and economists discuss what’s next

House Speaker Nancy Pelosi, D-San Francisco, and Education and Labor Committee Chairman George Miller, D-Martinez, took part today in an emergency economic forum on Capitol Hill to discuss economists’s recommendations on what we should do next to create jobs and stabilize the financial markets.

Congress’ approval of the Bush Administration’s $700 billion bailout plan was only the first step, Democrats say; next up should be a large, direct government investment in the economy to help quickly create jobs and rebuild infrastructure, help struggling states (like California) and extend unemployment insurance.

Among those testifying today were:

  • Iowa Gov. Chet Culver;
  • Economic Policy Institute economist, author and CNBC contributor Jared Bernstein;
  • Brookings Institution ecomomist Doug Elmendorf;
  • investment banker William R. Hambrecht;
  • author and American Prospect cofounder and editor-in-chief Robert Kuttner;
  • former Securities and Exchange Commission Chairman Arthur Levitt;
  • Brookings Institution economics senior fellow and former Federal Reserve Board vice-chair Alice M. Rivlin;
  • Decision Economics Inc. president and chief economist Allen Sinai, formerly of Lehman Brothers;
  • Columbia University professor, Nobel laureate and former World Bank senior vice president and chief economist Joseph E. Stiglitz;
  • Harvard University professor and former U.S. Treasury Secretary Lawrence H. Summers; and
  • University of California, Berkeley Haas School of Business professor and former President’s Council of Economic Advisers chairwoman Laura Tyson.
  • After today’s forum, Pelosi announced House Democrats will begin laying groundwork for a comprehensive economic recovery and job creation program with a hearing before Miller’s committee sometime next week; Miller said that hearing will focus on the nation’s severe unemployment outlook and strategies to spur job growth.

    “The credit crisis and stock market crash is making an already dire unemployment situation worse,” he said in a statement issued today. “The top economists who have briefed the Democratic leadership today and over the last few weeks all agree that unemployment is going to continue to rise. We are going to examine the best ways to get Americans back to work and put our economy on the road to recovery.”

    Miller already has scheduled a hearing for 10 a.m. next Wednesday, Oct. 22 in San Francisco — speakers and location still to be announced — on how the financial crisis is affecting workers’ retirement savings; an initial hearing on this topic last week in Washington featured testimony that workers’ retirement savings have lost $2 trillion in value over the last 15 months.


    Boxer: GOP, Gramm, Greenspan caused this mess

    U.S. Sen. Barbara Boxer, D-Calif., was at the University of California, Berkeley today to tour the new Stanley Hall; escorted by Chancellor Robert Birgeneau, she heard from Institute for Quantitative Biosciences researchers who’re studying ways of converting plant matter into fuel and using bacteria to do environmental cleanup.

    Then she visited a Peace and Conflict Studies class, where talk quickly turned to the financial morass gripping the United States and the world. We’re in hard times, she agreed, but all the more reason to step up the fights for energy independence and against global warming, creating green jobs in the doing.

    We’ve turned into “a country that’s built on paper,” a false wealth of securititized mortgages that put us in this “house of cards,” she said. “We’ve got to get back to the basics in this country of building things and taking care of ourselves.”

    Asked why Congress didn’t see the crisis coming, she replied that it had, even way back in the 1980s when the “Keating Five” — five U.S. Senators including current Republican presidential nominee John McCain, whom she didn’t mention by name — moved to suppress bank regulators, leading to the savings and loan scandal and its $125-billion taxpayer-funded bailout. “I believe that was a clue as to what was going on,” she said, and conservatives’ desire to suppress meaningful regulation never went away.

    Then-U.S. Sen. Phil Gramm, among McCain’s top economic advisers this year, crusaded through the 1990s for deregulation of Wall Street, Boxer charged. And even as Congress grew concerned about out-of-control mortgage lending and passed a 1994 law giving the Federal Reserve chairman power to oversee this field, then-Fed chairman Alan Greenspan “chose not to do it — instead he said, ‘This is wonderful!’ ” Congress should’ve been looking over Greenspan’s shoulder, she acknowledged, but lawmakers already had acted and it was the executive branch’s responsibility to conduct enforcement.

    Asked about today’s yo-yo-like stock market action, Boxer essentially said the market will do what it will do, but investors should take careful, measured looks at the companies in which they buy and sell rather than just acting on fear.

    Boxer had issued a statement Thursday after voting for the $700 billion bailout legislation which sounded as if she’d been holding her nose when she wrote it. She reiterated Monday that she was “angry” at having to support such a bill, but the Senate at least had added crucial oversight provisions so that money won’t be used without public accountability.