Obama Signs Into Law Health Care Fixes, Student Loan Overhaul

With the stroke of a pen, President Obama brought to an end the Democrats' three-decade quest to reform the health care delivery system in America, signing the final piece of his health care reform legislation into law at a northern Virginia community college. Also included in the bill signed Tuesday is an overhaul of the federal student loan industry.

The president was introduced by Dr. Jill Biden, the wife of Vice President Joe Biden, who works as an instructor at the college that hosted the event. Unlike her husband, who made headlines last week when he called health care reform a big f***ing deal, Jill Biden stuck to the script.

Obama thanked Dr. Biden for her introduction "and for putting up with Joe." He then used his remarks to make a final sell on the health care reforms that are coming, and to focus on the changes to the student loan industry, which he said represent the largest federal investment in higher education since the G.I. bill.

"Today, we mark an important milestone on the way to health insurance reform and higher education reform," he said. "But more broadly, this day affirms our ability to overcome the challenges of our politics and meet the challenges of our time."

He added that the health care process tested whether it was still possible for the government to respond to the needs of everyday people, or whether special interests would preclude that outcome.

"That's a test we met one week ago when health insurance reform became the law of the land in America," he said.

Although Obama signed the larger $871 billion health care reform bill into law last week, the Senate also passed the package of "fixes" to that measure, which Obama signed Tuesday. Included in the package are billions of dollars in additional subsidies for middle-class Americans to purchase health insurance; a delay until 2018 for implementing the 40 percent excise tax on expensive insurance plans; and a major overhaul of the federal student loan program.

The bills that Obama signed Tuesday and last week will be phased in over the next four years, but several elements will be implemented in the next six months, including tax credits to 4 million small businesses to cover employees' insurance; an end to insurance companies cutting off coverage for customers who get sick; and a provision allowing young adults to remain on their parents' policies until they are 26 years old.

By 2014, the legislation will also require every American to purchase health insurance and will penalize large businesses that do not provide insurance for their employees. Individuals will be able to shop for insurance through new health care exchanges, and will get government subsidies if they need help to do so. About 15 million low-income Americans will be added to Medicaid, an element that governors have vocally opposed because of the unfunded mandates associated with it.

To pay for the reforms, the bill will expand the Medicare payroll tax to investment income; impose a 40 percent excise tax on expensive insurance policies; add fees on pharmaceuticals and medical devices; and collect penalties from individuals and large business that do not buy the coverage required by the new law.

In addition to health care reform, Obama used his Tuesday speech to highlight the reforms to the student loan industry, which will eliminate the role of private lenders in originating federal student loans. The Congressional Budget Office estimated that change will save the federal government between $6 billion and $7 billion per year. Read about the student loan changes HERE.

"We can't afford to waste billions of dollars on giveaways to banks," he said. We need to invest that money in our students. We need to invest in our community colleges. We need to invest in the future of this country."

Obama said that demand for federal grants and loans had skyrocketed in the last year, and explained that reforming the loan process would save money that will be reinvested to extend the life and the reach of the Pell Grant program.

"Today, students hoping to attend college on a Pell Grant can feel more secure," he said, calling the legislation "one of the most significant investments in higher education since the G.I. bill."

Republicans have derided the education reforms as a "government takeover" of the student loan industry, and Senate Minority Leader Mitch McConnell said this weekend that GOP candidates and leaders will run in the 2010 midterm elections on a promise to "repeal and replace" the law signed today.

Flanked by House Speaker Nancy Pelosi, Education Secretary Arne Duncan, students and teachers, the president then sat down to sign the reconciliation bill and education reforms. He used 17 pens to put his name on the two measures he had been promising since he ran for president in 2008.

When he stood to leave, a group of students shouted from the audience, "Thank you!"