A recent report by the U.S. Senate Health, Education, Labor and Pensions Committee revealed a combined $521 million in benefits for veterans, and from the Defense Department benefits for veterans in 2010 was received by 20 for-profit schools.

Provided by the U.S. Senate Health, Education, Labor and Pensions committee

For-profit institutions are required to follow the 90/10 rule. That is, only 90 percent of their revenue may come from federal aid. If the formula used for determining the 90 percent included benefits for members of the military, many of these colleges would not pass.

This information has been helping to fuel efforts led by U.S. Sen. Tom Harkin (D-Iowa) and U.S. Sen. Tom Carper (D-Del.) to increase scrutiny on for-profit colleges.

“[T]hey are really going after the military in a big way,” Harkin told The Iowa Independent, believing it is because it does not count towards the 90/10 law.

Further fueling the nearly year-long investigation through the HELP Committee, which Harkin leads, is questionable recruiting and retaining efforts that have been uncovered.

Harkin said private non-profit colleges in Iowa, such as Buena Vista University, Simpson College, Graceland College and the like are still doing a good job of educating low-income students; perhaps even better than the Regents, because of the endowments they receive. But his attention toward the for-profit private colleges has raised a number red flags.

“The federal government is putting out half a billion dollars a year in educational assistance for veterans and for active duty personnel,” Harkin further told The Iowa Independent. “When I inquired from the Department of Defense as to where it was going, what was happening to these military people — Were they graduating? Were they getting diplomas? Were they getting jobs? — I got nothing back. The Department of Defense has no data on that. They simply send the money to them and that’s it.”

A Government Accountability Office report concluded along with the investigation Harkin led that the Defense Department and the for-profit industry lacked sufficient scrutiny over where tax dollars were going and how they were being used.

Carper told the Chronicle on Higher Education he was surprised to learn military aid was not included in the 90/10 rule, and suggested the government should consider adjusting that.

“I’m a big advocate of skin in the game,” he said. “There has to be skin in the game for markets to work.”

Provided by the U.S. Senate Health, Education, Labor, and Pensions committee

For-profits have not been alone in courting members of the military. Nonprofit and public colleges have as well. A 2009 Iowa task force found adding 100 veterans a year would yield an additional $800,000 in tuition income annually for the University of Iowa and nearly $2 million in revenue for the city of Iowa City.

For-profit schools have become the fastest growing sector of higher education, moving from 550,000 students in 1998 to more than 1.8 million students by 2008. Although they are still only 10 percent of the total higher education student population in the U.S., they take 42 percent of all Pell Grants.

Deceptive Recruitment Practices

With little oversight by the government as to where the education benefits for veterans are going or being used, for-profit colleges have stepped up their recruitment of members of the military.

In one instance a veteran was repeatedly told by recruiters that his post-9/11 GI Bill benefits would completely cover the cost of his degree. It was only after enrollment, the veteran said, that he learned he would owe approximately $11,000 beyond his military benefits to Bridgepoint-owned Ashford University.

This veteran, or veterans overall, were not the only students to file formal complaints against Ashford. The complaints came from students of different backgrounds — more than 700 in a two-and-a-half year period. They accused school officials not only lying to them or misleading them, but of charging them with undisclosed fees.

One student claimed he was told he would be able to receive his teaching license from Ashford, based in Arizona. Yet a year later, right before his scheduled graduation, he learned Ashford was not allowed by the state of Iowa to award teacher licenses, and that he would have to attend a “cooperating school” in Arizona for a year. In the complaint he stated, “I was really blown away to find out that I had spent so much time and money at a college that I was not going to be able to obtain my teacher’s license from.”

A number of students also reported receiving very little help once inside for-profit institutions, insisting there was more emphasis on recruiting rather than assisting students’ classwork. Indeed, some documents detailed instructions for officials to make at least 50 outbound calls a week in recruiting efforts and hold meetings almost daily with prospective students.

In undercover audio recordings by GAO agents, counselors at the for-profit schools can be heard discrediting traditional universities for large class sizes, insisting they would not be receiving a value education. While there are lecture courses with sometimes more than 300 students in a class, most classes taken at Iowa’s public universities throughout a degree program have less than 50 students in them. They also go on to tell potential students they would have to try to get less than a B in their classes at the for-profit college.

The GAO encountered some schools encouraging prospective students to falsify documents in order to receive more aid.

Perhaps the most alarming tactic found within internal documents recently released was the use of the “Pain Funnel.”

Lines within the documents from the for-profit ITT Technical Institute, which has more than 100 campuses nationwide, include “Remind them of what things will be like if they don’t continue forward and earn their degrees” and “Poke the pain a bit and remind them who else is depending on them and their commitment to a better future.”

Drop Out Rates

Colorado Tech University’s online program has a 61 percent drop-out rate. The University of Phoenix’s Axia College has seen 84 percent of their students drop out.

Jason Deatherage, former admissions adviser at Colorado Tech, was fired for not meeting his quota of recruiting military vets. He told the New York Times there is massive pressure to enroll more veterans.

“We knew that most of them would drop out after the first session,”  Deatherage said. “Instead of helping people, too often I felt like we were almost tricking them.”

Bridgepont Education had a 63 percent drop-out rate in 2009. Despite such a high rate of drop-outs, that year Bridgepont’s Chief Executive Andrew S. Clark earned almost twice as much as Charles Edelstein, CEO of the University of Phoenix, when he raked in $20.5 million.

Provided by the U.S. Senate Health, Education, Labor, and Pensions committee 

Student Debt Load and Career Barriers

Although, 11 of 16 community colleges in Iowa report graduation rates comparable to or worse than Bridgeport, students at for-profit institutions are almost twice as likely to default on their student loans.

Katie Bushnell currently attends Full Sail University, a for-profit school focused on the entertainment business. Bushnell takes classes online and expects to graduate within a year with a Bachelor’s degree and nearly $70,000 in student loan debt.

According to recent data released by the U.S. Department of Education, 13.8 percent of students who began repaying their public-private partnership loans in 2008 have since defaulted. For-profit institutions, however, reported 25 percent of their graduates defaulting after three years. There has been increased scrutiny over for-profit colleges as they enroll less than a fifth of all students but produce nearly half of all loan defaulters.

Bushnell actually walked away from traditional schools before coming to Full Sail. She started at Iowa State University, then attended Des Moines Area Community College and Indian Hills Community College. Much of her collegiate experience has been financed through student loans; however, she’s been working full-time hours to afford housing and living expenses since her family cannot contribute.

She counters the complaints students have lodged at other for-profits about not receiving support while taking classes.

“Full Sail does have excellent career services that has been helping me with resumes and career building exercises,” Bushnell said.

But Bushnell is worried about what she might end up doing after college since the entertainment business in Iowa is so small. She wanted to do music promotions, but with limited opportunities, she’s now considering out-of-state sports teams. Taking classes online, combined with trying to find work and build experience booking concerts during college has also placed obstacles in her way.

“I do miss having a set class time, because it is very difficult to focus and very easy to procrastinate with online classes,” Bushnell said. “Working full time and then coming home to classes is tough chore. I am envious of students who don’t have to work full time and still get by while in school.”

Watching tuition increases and budget cuts to public universities though is a big incentive for Bushnell to avoid going back to public colleges.

Contributions and Oversight

Part of Harkin’s investigation found 95 to 98 percent of students attending for-profit colleges borrowed money to attend. Since the average cost of a credit hour was often more than double that of tuition for a public college, the debt loads were significantly higher. Iowa has ranked in the top five for highest average student debt load by the Project on Student Debt every year that they’ve compiled data, ahead of all other Midwestern states.

With all of these reported problems, Harkin is seeking better oversight of the half a billion taxpayer dollars going to the for-profit colleges through military members’ benefits.

The Department of Education has already brought forward a new plan that would deny for-profits from receiving federal student aid if their graduates cannot pay off their student debt in a reasonable time frame.

While Harkin has been leading this charge, he has also been among the recipients of donations from the industry. As The Iowa Independent reported in 2010, he took significant donations from DeVry, Inc. and Bridgepoint. Democratic U.S. Reps from Iowa, Bruce Braley and Dave Loebsack, also took contributions, as did U.S. Sen. Chuck Grassley (R-Iowa).

U.S. House Speaker John Boehner (R-Ohio) was one of the biggest benefactors in contributions from the industry, receiving more than $30,000.

DeVry, based in Illinois, spent more than $300,000 on lobbying efforts in 2009 and 2010. Ten of the industry’s top companies collectively upped their spending on lobbying from $1.5 million in 2009 to more than $4 million in the first nine months of 2010. The industry is fighting against any new regulations.

“We need better oversight, and we need to bring this to light,” Harkin said. “I’ve had this ongoing investigation and it seems things keep getting worse and worse.”

The Education Department held back on imposing their new plan for regulations after facing heavy push-back from lobbying and opposition in Congress.

Wall Street money manager Steven Eisman testified before the HELP Committee last summer and called for-profit colleges “marketing machines masquerading as universities.” Eisman has hedged bets on some of these education corporations, but warned the committee the industry was reaping those rewards while taxpayers were at risk, as the companies are running on federal aid.

Harkin said Attorneys Generals around the country, including Florida, Illinois, Kentucky and Iowa’s Tom Miller, have launched investigations into the schools for any unlawful conduct. California and Maryland’s legislatures are pushing through bills to reduce or eliminate state aid to the for-profit colleges.

Yesterday, Democratic leaders responded with a resounding, “Nah.” Instead of scrapping loan reform, leaders are moving forward with a plan to attach the lending bill to the health care legislation the Democrats hope to pass in the coming weeks. The New York Times reports:

The deal would bundle the bill into an expedited budget package along with the Democratic health care legislation, which would allow for both measures to be passed by the Senate on a simple majority vote. Without the deal, the student loan bill would have been unlikely to pass because it lacked the 60 votes needed to overcome a filibuster.

The reason it lacked the 60 votes, though, is itself informative. And here’s a hint: It’s not because lawmakers think that the current system — under which the government subsidizes private lenders to make loans to students — is the best use of taxpayer dollars. Indeed, the six Democrats expressing their concerns about the lending bill were quick to indicate that they “support reforming the federal student loan programs to generate historic budget savings.” What they haven’t suggested is how it’s possible to cut out those subsidies — estimated to save the government $67 billion over 10 years — without stripping jobs at the companies that currently make those loans.

As we wrote today, that dilemma isn’t limited to the realm of student lending. It’s a question plaguing every lawmaker who has in mind to rein in the same deficit spending that’s sustaining jobs in countless sectors of the economy.

And you thought your job was tough…

Sens. John Ensign (R-Nev.) and John Kerry (D-Mass.) (WDCpix)

Insurers and employers could penalize workers thousands of dollars for pre-existing conditions under the Senate’s health-care reform bill, according to a long list of academics, advocates and medical societies, which are pushing for elimination of the provision.

The proposal threatens to undercut a central goal of the Democrats’ health-care reforms: to eliminate the common practice of basing premium rates on the health of patients.

At issue are employer-based wellness programs, which aim to prevent common conditions related to smoking, overeating, lack of exercise and other unhealthy behaviors — conditions such as diabetes, hypertension and high cholesterol. Both the House and Senate bills promote such programs, but the Senate bill, critics argue, would allow employers to raise rates on all of their workers, then lower them only for folks who meet certain wellness targets. Such a system would effectively force less healthy workers to subsidize the insurance plans of those more fit — an unfair penalty in the eyes of many medical groups.

[Congress1]“Incentives quickly become penalties for those who can’t meet the requirements,” said Sue Nelson, vice president for federal advocacy at the American Heart Association. “This would really become medical underwriting by another name.”

Current regulations allow group plans to offer rewards up to 20 percent of premium rates for employees who meet certain health goals. The Senate health-reform bill would effectively make that rule law, while also bumping up the variation allowance to 30 percent — roughly $4,000 for the average family plan. The Senate bill would also allow officials at the Health and Human Services Department to go even higher — up to 50 percent.

Outside of the group market, the Senate provision would also create a 10-state pilot program testing the advantages of the wellness incentives for individuals buying insurance on their own.

The provision was championed by Sens. Tom Carper (D-Del.) and John Ensign (R-Nev.), both members of the Senate Finance Committee, who argued during the panel’s health-reform debate that such market-based incentives for healthy living will put a considerable dent in the nation’s skyrocketing health care costs.

“Voluntary employee participation in these areas should naturally be reflected in lower healthcare costs,” Ensign said. “This isn’t just about offering financial incentives; this is about making Americans healthier.”

Numbers from the Centers for Disease Control and Prevention back Ensign’s claim. The cost to treat smoking-related ailments is more than $96 billion each year — roughly $1,400 per smoker, CDC estimates. For obesity, the cost burden is even higher, representing as much as $147 billion in annual medical expenses — also about $1,400 per patient, CDC says.

Critics of the Ensign-Carper provision don’t dispute those figures. But they worry that lowering premiums for some workers — those that hit their wellness marks — would inevitably mean hiking rates on those who didn’t.

“When you start picking people off on an individual basis [and] reducing their premiums individually,” Sen. John Kerry (D-Mass.) said during the Finance Committee markup, “you do not adjust for what else may be happening within that [coverage] universe, and then other people are picking up the overall costs.”

Ensign’s response to Kerry last September (effectively: “Exactly! Sicker people should pay more.”) highlights the central disagreement between the two sides of the debate.

Let us just say that you had 100 people and 25 people decided to get healthier and it lowered the amount of money that you had to spend for those 100 people. Not all 100 should benefit in that. Only the 25 that made the difference should benefit in that. That is fairness.

I mean, if the 25 are the ones who are changing their behavior and that is the reason you have to spend less, they should be the ones rewarded, not the people who did not change their behavior.

Members of the Finance Committee approved the amendment overwhelmingly, 18 to 4.

A similar provision, sponsored by Sen. Tom Harkin (D-Iowa), was attached to the health reform bill in the Senate Help, Education, Labor and Pensions Committee last summer.

At least one former insurance industry executive argued this week that it will take little time for companies to exploit the loophole in the Senate bill.

“Insurers can smell profits a mile away,” said Andrew Kurz, former chief financial officer at Blue Cross-Blue Shield Wisconsin. “This is a loophole they will drive right through on day one.”

Nelson, of the American Heart Association, conceded that the wonky issue is “tremendously complex,” making it difficult for critics of the Senate provision to get their message across. She said that advocates were able to speak directly with House lawmakers about the provision, but didn’t have similar luck winning an audience in the upper chamber.

“I wish,” she said, “we had had that opportunity in the Senate.”

The vote was 10 to 13, with three Democrats — Sens. Max Baucus (Mont.), Kent Conrad (N.D.) and Blanche Lincoln (Ark.) — opposing the proposal.

Democratic Sens. Bill Nelson (Fla.) and Tom Carper (Del.), who voted against a similar proposal offered earlier in the day, both supported Schumer’s amendment.

We are tracking all of today’s developments on our Senate Public Option Scoreboard.

But Baucus wasn’t the only Democrat on the panel to vote against the Democratic proposal. Sens. Robert Menendez (D-N.J.) and Tom Carper (D-Del.) were also vocal opponents of the amendment, and offered “no” votes to back their words.

It’s not tough to surmise the reasons.

New Jersey is one of the nation’s great pharmaceutical hubs, housing such drug giants as Johnson & Johnson, Merck, Wyeth and Schering-Plough. Earlier this year, Bausch and Lomb moved in as well.

As for Carper’s Delaware, it boasts the headquarters of AstraZeneca, a top-10 drug maker with revenues topping $31 billion last year.

And the industry has never been shy about showering local lawmakers with campaign cash. Indeed, Menendez has accepted more than $357,000 from the pharmaceutical industry over his congressional career, according to the Center for Responsive Politics. Carper, for his part, has taken in nearly $208,000 from drug makers, CRS reports.

Sen. Charles Schumer (D-N.Y.) pointed out yesterday that it was perfectly understandable that the drug makers, being publicly traded companies, would fight to preserve their profit margins for the sake of shareholders. But Congress, Schumer added, is bound to different interests. “We don’t represent their stockholders,” he said. “We represent our stockholders — the U.S. taxpayers.”

Someone please inform the Senate Finance Committee.

It was an arrangement that was immediately and sharply criticized by liberal Democrats in both chambers, who are pushing to empower the states to haggle for lower prices. And last night, near the end of the opening day discussions over an enormous health reform bill in the Senate Finance Committee, we saw just how divisive an issue it is.

When Sen. Bill Nelson (D-Fla.) introduced an amendment providing cheaper drugs for the Medicare/Medicaid eligibles — an amendment that would effectively scrap the White House deal with the branded drug lobby — Democrats on the panel couldn’t endorse it fast enough.

Sen. John Kerry (D-Mass.) came first, saying the proposal “makes all the sense in the world.” Not to be outdone, Sens. Debbie Stabenow (D-Mich.) and Charles Schumer (D-N.Y.) quickly followed, the latter arguing that the current arrangement prohibiting negotiation, enacted by Republicans in 2003, was designed “simply to put money in the pharmaceutical companies’ pockets.”

“It’s hard to imagine an argument against [Nelson's amendment] that could be made publicly,” Schumer said.

But that didn’t stop several members of the panel from trying.

Sen. Charles Grassley (Iowa), the committee’s senior Republican, said the amendment — which Nelson says would save $86 billion over 10 years — “will raise prices for people with private insurance.”

“There is no free lunch,” said an impatient Grassley. “But these people talk like there is a free lunch.” He was talking about Democrats.

And Sen. Tom Carper (D-Del.) said it “just doesn’t seem fair” that Democrats would renege on the initial bargain with the Pharmaceutical Research and Manufacturers of America, or PhRMA.

“Whether you like PhRMA or not,” Carper said, “we have a deal.”

That comment brought a backlash of its own, with many Democrats quick to point out that they never agreed to any pact with the drug makers. “Congress has a right,” Kerry said, “to make a different decision.”

Sen. John Rockefeller (D-W.Va.), an original sponsor of the Nelson amendment, noted dryly that, “There’s nothing sacred about that deal.”

And Schumer argued that breaking a deal is only unfair if you thought the original deal was honorable to begin with. “How often do we side with interest groups,” he said, “and how often do we side with the average citizen?”

To that, Grassley responded that Democrats, then, “ought to be embarrassed for your president,” who forged the bargain.

Of note, Finance Chairman Max Baucus (D-Mont.), who reportedly has agreed to the PhRMA deal, was silent throughout the lengthy exchange.

The Finance Committee, Baucus said, will vote on the Nelson-Rockefeller-Kerry-Stabenow-Schumer amendment today.

–

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Nuclear power is courting some new friends as it pushes for government subsidies in the sweeping climate bill being debated in the Senate.

For the last decade, the biggest players in the nuclear industry lent most of their financial backing to Republican candidates and lawmakers, who have been the strongest supporters of nuclear energy. But this year, as the Senate takes up cap-and-trade legislation to reduce greenhouse gas emissions, moderate Democrats have become the industry’s prime target.

Illustration by: Matt Mahurin

“It is the so-called Blue Dogs and the moderate Democrats who are going to tip the balance one way or the other [on nuclear incentives in the climate bill],” said Mitchell Singer, a spokesman for the Nuclear Energy Institute, a nuclear lobbying group and a leading industry donor to political candidates. “Those are the ones we feel the need to educate.”

A TWI analysis of 2009 campaign contributions by nuclear advocacy groups suggests this is indeed their strategy. This week, political action committees, which raise money for candidates, filed their monthly reports to the Federal Election Commission. The numbers reveal that the two biggest industry donors to congressional candidates, the Nuclear Energy Institute and General Atomics, made most of their contributions to Democrats, and particularly moderate and conservative Democrats.

This marks a break from recent trends. Since 2000, both groups had sent a large majority of their donations to Republicans in every election cycle. In 2007-2008, for example, even with Democrats in control of Congress, the Nuclear Energy Institute gave money to 25 Republican and 15 Democratic senators and Senate candidates. In 2009, it has donated to eight Democratic senators and just five Republicans.

Most of this year’s Democratic recipients in the Senate come from the party’s moderate wing, including Sens. Ben Nelson of Nebraska and James Webb of Virginia ($1,000 each); Evan Bayh of Indiana and Byron Dorgan of North Dakota ($2,500 each); and Tom Carper of Delaware ($3,120).

The Nuclear Energy Institute has also made the maximum $5,000 donation this year to a number of political action committees that fund moderate Democrats, including the Blue Dog PAC, Bridge PAC, Moderate Democrats PAC and New Democrat Coalition PAC. Its most recent reported donation — $500 on June 23 — was to Priority PAC, the leadership PAC of the conservative Democratic Sen. Mark Pryor (D-Ark.).

Likewise, General Atomics, which in 2007-2008 gave to 19 Republican Senate candidates ($68,000) and 10 Democrats ($41,500), this year has made donations to three Democrats ($9,000) and three Republicans ($7,500), in addition to the $8,000 it gave to the recent Republican-turned-Democrat Sen. Arlen Specter of Pennsylvania. The Democrats include the moderate Dorgan ($2,000) and the more liberal chair of the Senate Environment and Public Works Committee, Barbara Boxer of California ($2,000). General Atomics also donated $15,000 to the Democratic Senatorial Campaign Committee in January.

In the legislative debate, Republicans have pushed for expanded loan guarantees for nuclear plants and the construction of up to 100 new nuclear facilities. Many liberal Democrats and environmentalists argue that nuclear energy is expensive and slow to get off the ground, and that increases in nuclear power could come at the expense of true renewables like wind and solar.

In the middle stand the moderate Democrats — and some, such as Nelson, have provided evidence that the nuclear industry’s efforts may bear fruit. On May 25, Nelson penned a column in the McCook Daily Gazette, in which he wrote, “It makes abundant sense to include expanding nuclear energy in such legislation.” According to Nelson, nuclear power provides a third of Nebraska’s electricity.

Members of Congress routinely take money from industries that hold stakes in their respective states. Likewise, industry groups frequently target lawmakers who are likely to be sympathetic to their cause.

“These organizations aren’t doing it out of the goodness of their heart,” said Dave Levinthal, a spokesman for the Center for Responsive Politics, which compiles campaign finance data, including the figures for 2007-2008 cited here. “They’re doing it for very specific reasons.”

The Nuclear Energy Institute also lobbies, spending $580,000 in the first quarter this year, according to the Center for Responsive Politics. Singer described this lobbying effort as an educational campaign to inform members of Congress and their staffs.

“It’s kind of like going to class,” he said. “We explain the value of nuclear — what it can do and why it is needed.” He declined to specify which legislators have participated in these sessions.

Singer maintains that nuclear energy is an issue that can cross party lines, citing supportive statements from President Obama and Energy Secretary Steven Chu. “We never approach nuclear as a partisan issue,” said Singer. But he acknowledged that “a lot of Republicans are very strong supporters, particularly in states with nuclear power.”

Michael Marriotte, director of the Nuclear Information and Resource Service, which opposes the expansion of nuclear power, agrees that there is nothing overtly ideological about the nuclear debate. “Nuclear’s always been a pretty bipartisan issue on both sides,” he said. “It’s actually probably more partisan now than it’s ever been.” He added that he is puzzled by the recent staunch Republican support for nuclear power. “It doesn’t make sense from a fiscally conservative standpoint to spend billions and billions on nuclear power,” he said.

With a filibuster-proof majority in the Senate, Democrats should theoretically be able to pass their energy agenda without making concessions to Republicans. But given the relatively conservative nature of a number of Democrats — and the nuclear industry’s efforts to sway this contingent — there is a real possibility that a nuclear expansion will be necessary to bring enough “yes” votes on board.

“Everyone’s trying to figure out how to get to 60 votes,” said Marriotte. “And clearly you can’t do it without moderates. The industry is trying to make nuclear power the issue that brings over some of the moderates.”

Julie Gauthier contributed research assistance for this report.

But you’d be wrong.

Asked yesterday by Sen. Tom Carper (D-Del.) if the House-passed climate change bill contains enough funding for public transit, Transportation Secretary Ray LaHood appeared to have no opinion whatsoever. “We’ll be happy to consult with you on this,” LaHood told lawmakers on the Senate Environment and Public Works Committee. “As soon as you know what direction you want to take we’ll be there with whatever technical assistance we can provide to ya.”

It’s a curious response, if only because LaHood’s opening statement was a five-minute plea for a greater emphasis on public transit as a key component of tackling climate change. Sure, Congress will have the final say on the bill, but that wasn’t what Carper was asking. He was asking for guidance so that lawmakers would know what direction they want to take. Instead, LaHood punted, applying no pressure on the lawmakers drafting the bill.

Carper, it turns out, had good reason for choosing his question: He’s the lead sponsor of a bill that would dedicate 10 percent of cap-and-trade allowances to fund public transportation, bike paths and other green-travel initiatives. By contrast, the climate change bill that passed the House last month includes only 1 percent for public transit.

The Senate’s climate change proposal is expected for release in September.

Shuster: Why shouldn’t people believe that your decision to say a public option as backup plan — why shouldn’t people believe that it’s been influenced by the money you’ve gotten from the insurance companies and from pharmaceuticals who don’t want a backup plan, who want it as — who don’t want a public option, at all, or a backup plan as a worst-case scenario?

Carper: Well, at the end of the day, I want us to pass a bill. I want us to pass a good bill … At the end of the day, there are more important things in the bill than whether or not we have a public plan or a public option. I think the idea of what we did in the Medicare Part D plan, where we have a fallback plan on the shelf, ready to pull out if we need it, in order to make sure market forces are working, that seems to me to be a perfectly good option.

Shuster: But, Senator, you’re under a lot of pressure, wouldn’t you acknowledge, from the insurance companies, with all the money they’ve given you?

Carper: I don’t feel a lot of pressure at all. The most effective lobbyist for me — I’ve been governor; I’ve been congressman; I’ve been state treasurer; now I’m the senator — the most effective lobbyist, for me, in everything I have ever done, are actually people from Delaware that I know that I trust who talk to me, in all kinds of parades all over my state this last Fourth of July weekend, and people that call my office, mostly from Delaware, that have a view, some for public plans, some against it.

“The best way to do it,” Carper concluded, “is to develop a bipartisan plan.”

Take Sen. Tim Johnson. The South Dakotan was the lone Democrat on the banking panel to vote against the bill.

The reason? Well, officially, Johnson said the bill “goes too far in prohibiting lenders from adjusting prices to account for increased risk.” (Among other things, the bill requires companies to give 45 days notice when raising interest rates and prohibits issuers from applying rate increases to existing balances — the types of things that would prevent rates from jumping 20 or 30 percent overnight because of a single late payment.)

Yet South Dakota also happens to be a hub for some of the largest credit card operations in the country, including Citibank. Johnson is clearly protecting the regional industry here, and his opposition to the bill forecasts a tough fight ahead for reform supporters. Indeed, Delaware — another center of credit card activity — is home to Sen. Tom Carper, another Democrat with a history of protecting the industry.

As the stalled cramdown bill has shown, the finance industry has plenty of influence even when the issues aren’t regional. With two Senate Democrats already defending the industry over consumers, the race to 60 is sure to be close.