Group blasts federal cuts

A possibly harmful change in federal financial aid was among the concerns.

Mark Remme

An alliance of several Minnesota groups called a news conference Thursday in the State Office Building at the Capitol in response to impending financial cuts by the U.S. Congress.

The alliance, known as the Emergency Campaign for America’s Priorities, runs programs in 35 states. It represents many groups that have taken a hostile stand against recent legislation backed by President George W. Bush and a predominately Republican Congress.

Due to funding needed for Hurricane Katrina relief, an estimated $35 billion linked to Medicaid, food stamps and Temporary Assistance for Needy Families are expected to be cut.

Those cuts come in conjunction with a possible $9 billion to $18 billion cut to student aid, said Hal Kimball, state chairman for the Minnesota State University Student Association.

The average student leaves college with a $17,500 debt and that debt will increase by nearly $5,800 under the new legislation, Kimball said.

“It would have an impact on all of our students,” he said. “The best thing students could do is start contacting their elected officials.”

The changes would increase the interest rate cap on loans from the current 6.8 percent to 8.5 percent, Kimball said. In addition, new origination fees would increase by 0.5 percent for all students.

“Essentially, with the new origination fee, you’re paying more in the interest,” Kimball said. “If a student receives a loan, they will be receiving around 98 percent of it instead of 100 percent of it.”

Joel Johnson, former president of the Law School Republicans student group, said the cuts to student loans are a basic sacrifice.

“I think people can debate whether you can pay that much for the Katrina efforts or not,” Johnson said. “The thing is you need a way to fund it.”

Cutting funding for student loans can result in unpleasant consequences for legislatures, said Johnson, who is also a University Law School graduate.

“It’s a difficult issue because you’re probably going to alienate some voters,” Johnson said. “I feel like you shouldn’t change your policy regardless.”

Johnson said cuts have to be made somewhere.

“We’re fighting a war right now, so we can’t cut defense – whether you support the war or not, you have to fund it because the troops are still there,” he said.

Donald McFarland, director of the Minnesota Emergency Campaign for America’s Priorities, said Congress is also proposing a $70 billion tax cut that would cater toward wealthier citizens. McFarland called the tax cuts “wrong American priorities.”

Minnesota alone will lose $159 million toward Medicaid funding, $27 million toward food stamps and $43 million toward Supplemental Security Income over the next five years, McFarland said.

Sunday Alabi, chairman of Association of Community Organizations for Reform Now, a Minnesota group, said he is leery of the motivation behind the ensuing cuts.

“One-third of the cuts could fund Hurricane Katrina relief,” Alabi said. “We don’t believe that this is what they’re doing.”

The Emergency Campaign for America’s Priorities news conference called for action from Minnesota Republican Reps. Jim Ramstad and Mark Kennedy and Sen. Norm Coleman, R-Minn., to back their cause.

The three legislators are considered swing voters on the issue and might be influential in the deciding vote, McFarland said. The vote is scheduled for early November.