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Congress Gets It Done By Charles Payne

Being Mean (adjective)-Cruel, spiteful, or malicious.

Means Testing (noun)-(Social Welfare) a test involving the checking of a person's income to determine whether he qualifies for financial or social aid from a government.

Finally, Congress got its act together and passed a couple of bills without the clock being a second from striking midnight or passing a deadline. The Highway bill and extension of cheaper student loans aren't perfect bills, but they remove the kind of bickering that sent the stock market into a nosedive and took a listless economy closer to recession. There is passage of the highway bill, which both parties consider a jobs bill. I cringed when Barbara Boxer brought out the lame save that it will create 3.0 million jobs. Yuck, what a stupid saying. Be that as it may, these are done deals.

Student Loans

All spring long, President Obama made the rounds at colleges beating up on Mitt about allowing interest on college loans to increase. Those Stafford loans are means tested and set aside for low and middle income students. Means testing is going to be a critical instrument in reforming entitlement programs, although not enough alone to save social security and Medicare. I get it with not giving these loans to rich kids, but income-driven policies have limited many of the programs of this administration from housing to taxes. Be that as it may, in the end is holding loan rates low the kind of lure that will get a lot of those low and middle income students in deeper trouble later in life?

In other words, isn't it kind of mean to suck in students for degrees that may not have market value or produce income to justify the overall cost-plus interest?

Student loans are now at $1.0 trillion and counting, having surpassed credit card debt. The government has pushed out the private sector which does leave open the notion of massive forgiveness down the road or getting corporations and rich people (even those that didn't go to college themselves) to pay off the debt. Before that part of the liberal Utopia kicks in, payments and reality will, and it's going to kick hard. There are 37 million Americans with college degrees and for the first time ever, more than half of unemployed have some college credits.

So, the new question dripping off everyone's lips these days is whether college is worth it anymore. I think the answer is yes, but so too, Liberal Arts professors. By the same token, we should be honest about who should go to college and while we are at it, instead of playing the political blame game, put pressure on colleges to reel in costs which has outpaced inflation by a couple of solar systems. For what it's worth, extending the 3.4% interest on Stafford loans will save the average grad $100 a year for a decade.

Years from now, millions of today's college grads will think Congress was cruel, spiteful and malicious for luring them into these cheap loans.

Today's Session

Wow the market has been all over the place this morning, down on reports that the JP Morgan loss could hit $9.0 billion. Interestingly, this kind of scuttlebutt from a piece in the NY Times actually helps make unwinding the trade more difficult and more costly. Congress will be thrilled with this news, especially in the face of today's decision on Obamacare. In the meantime those dark clouds over banks have gotten even darker. Coupled with stories that Barclays manipulated LIBOR for its own company gains, and it's a tough day for Wall Street. Even British Prime Minister David Cameron is weighting in saying there are "serious questions" for the company's management.

This has set a negative tone not helped by another huge initial jobless claims report of 386,000.

Yet the market has bounced a couple of times this morning on rumors that Germany would accept Euro Bonds, but Angel Merkel is still alive, so that noise was squashed. There is hope something big and meaningful will happen in Europe this week, the ECB cuts rates next week, and our Federal Reserve does the same shortly thereafter (presumably after another disappointing jobs report).