Obama acts to ease burden of student loans

[Jolie Rouge]

By Alister Bull | Reuters – 2 hrs 1 min ago

WASHINGTON (Reuters) - President Barack Obama is taking steps to ease the burden of student loans, the White House said on Tuesday, potentially helping millions of cash-strapped college graduates in a tough economy.

Obama plans to accelerate a plan to cap student loan payments at 10 percent of income, bringing it forward to start in 2012 instead of 2014. "Steps like these won't take the place of the bold action we need from Congress to boost our economy and create jobs, but they will make a difference," he said in a statement.

The loans initiative will be the third such move by Obama in as many days, following action to aid homeowners and boost hiring of military veterans. The White House wants to show he is an activist president battling a "do-nothing" Congress.

The loan changes do not require approval by Congress. Republican lawmakers blocked a $447 billion jobs plan put forward by Obama last month because it raises some taxes.

Students helped push Obama into the White House in 2008. As he campaigns for reelection in 2012, Obama's public approval ratings have fallen near 40 percent, the low of his presidency, because of discontent with his economic stewardship. Americans owe more on student loans than on outstanding credit card debt, and total loans outstanding are slated to exceed $1 trillion this year, according to the Federal Reserve Bank of New York.

The rise in private student lending and growing debt defaults have also been highlighted by the Occupy Wall Street protesters. Obama will announce the student loan measure in Denver on Wednesday as he wraps up a swing through western states that will be vital to his re-election campaign in 2012.

The White House estimates the loan changes could cut monthly payments for 1.6 million graduates. Student debt will also be forgiven after 20 years, compared with 25 years under current law.

More than 36 million Americans have federal student loan debt, but only 450,000 have so far taken advantage of the existing income-based repayment program.

Obama will also make changes to allow 6 million students to bundle together certain federal loans to allow a single monthly payment, reducing the risk of default caused by juggling multiple debt obligations.

The option will be open from January and those that take it up will also get a 0.5 percentage point cut in the interest rate on some of their loans, lowering monthly payments and potentially saving them hundreds of dollars in interest. "College graduates are entering one of the toughest job markets in recent memory, and we have a way to help them save money by consolidating their debt and capping their loan payments," said Secretary of Education Arne Duncan.

http://news.yahoo.com/obama-acts-ease-burden-student-loans-001017820.html

comments

Silly me, we did the responsible thing and limited our student loans and paid them all out ?

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How about putting a cap on politicians paychecks too?

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I went to a college that gave me the best education I could afford. I could have gone to more well known schools, but I couldn't afford it. I came out of 5 years of college with $30K in student loan debt and paid it off in 4 years. Why does everyone need their hand held through life? Good to a school you can afford and pay your bills!!!

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These articles refuse to say blocking his bill was a bipartisan effort. You have a right to your own opinion, but not your own facts.

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Let's put a cap on how much money any political candidate can spend on their campaign. Let's see how far that bill would get.

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I paid off my student loans early, am I going to get some money back for doing the correct thing?

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These students took out the loans. They are LOANS. If they loan money to somebody they expect to be paid back. That's how it works. If you take on adult respocibilities you have to act like an adult and live up to your word. You gave your word when you signed the loan. Stop whinning and pay your debts. Everybody else does.

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The burden of student loans is personal problem not the taxpayers responsibility.

[pepperpot]

The burden of student loans is personal problem not the taxpayers responsibility.

:clapping

[gmyers]

Ain't it amazing how all of a sudden he has all these ideas to help the economy. And they just happen to all take effect in 2012 which is election year. Why couldn't he think of all these things in the last three years. Its amazing how election year sparks so many different ideas. I guess he thinks we can't see through what he's doing. But it wouldn't surprise me if people didn't vote him back in. Oh yeah I bet he doesn't mention the fact that if you pay that much you'll be paying for a long time. A lot of the students will probably old before they pay the loans off.

[pepperpot]

How can I continue to pay my own bills when I'm being forced to pay and supplement everyone elses's? He's draining the middle dry....and the bleeding hearts are right there with him.

With all the class wars that are being promoted, the rich have gone into hiding and have taken their money with them. This means they are spending less and therefore everyone else is making less and out of jobs. The rich and wealthy should be encouraged to spend, that's how to really spread the wealth around. :agree

[sunniekiss]

The problem is & my son is one of those who have enormus student load debt is that there aren't any JOBS so they can repay their loans. He's trying, trust me. He will get hired on a "probationary peroid" of 90 days but on the 89th day he is let go. At first I was putting the blame on his shoulders for not working hard enoughta the job BUT when you see the same ad for the exact same position for the same company every 3 months it makes you wonder. The 90 day period is critical because after 90 days, with ObamaCare, the employer has to provide health insurance.
These kids voted for "hope & change" . They bit into this hook, line & sinker like a fish to a worm. Considering their very expensive education, you would think they would have been smarter that to end up as someone's dinner.

[pepperpot]

The problem is & my son is one of those who have enormous student load debt is that there aren't any JOBS so they can repay their loans. He's trying, trust me. He will get hired on a "probationary period" of 90 days but on the 89th day he is let go. At first I was putting the blame on his shoulders for not working hard enoughta the job BUT when you see the same ad for the exact same position for the same company every 3 months it makes you wonder. The 90 day period is critical because after 90 days, with ObamaCare, the employer has to provide health insurance.
These kids voted for "hope & change" . They bit into this hook, line & sinker like a fish to a worm. Considering their very expensive education, you would think they would have been smarter that to end up as someone's dinner.

I feel badly for those with loans (or without) that cannot find a job, much less a decent job. As you pointed out, a large portion of Obama's votes came from the young and students who wanted "hope & change" :agree, however, what was "promised" wasn't (and couldn't) be delivered in the fashion it was proposed.

So, the student who voted for Obama wants his student loans forgiven and that tab to be picked up by the taxpayers, some of which never voted for that "hoper & changer", Obama. While the Obama voter took a hit, the non-Obama voter takes a bigger hit.

I recall being a student years ago when working part-time, the companies would only schedule PTers for less than 16 (I think it was) hours per week otherwise the company would have to provide medical benefits, etc. So many times, we were limited to the amount of hours we could work. They just hired more PTers to fill the schedule. Wasn't Walmart very famous for this type of practice a few years back? Now with Obamacare costs, the stakes are much higher when providing benefits.

I also recall employers laying off workers "within a timely fashion" to avoid paying for their unemployment because if done before that period, the rates would affect the previous employer, not them. They also avoided hiring newlyweds (women) and pregnant women as well to avoid maternaty leave benefits, etc. These practices are not always easy to prove but happen very often.

[SLance68]

The problem is & my son is one of those who have enormus student load debt is that there aren't any JOBS so they can repay their loans. He's trying, trust me. He will get hired on a "probationary peroid" of 90 days but on the 89th day he is let go. At first I was putting the blame on his shoulders for not working hard enoughta the job BUT when you see the same ad for the exact same position for the same company every 3 months it makes you wonder. The 90 day period is critical because after 90 days, with ObamaCare, the employer has to provide health insurance.
These kids voted for "hope & change" . They bit into this hook, line & sinker like a fish to a worm. Considering their very expensive education, you would think they would have been smarter that to end up as someone's dinner.

As much as I hate Obama - you cannot blame Obamacare on why your son is getting let go. There is NO requirement that they provide health insurance after 90 days. Trust me I handle this at our office and there is no provision for that for quite a few years.

Do I fell sorry for people that took out student loans rather than working their way through college - NO. I paid for my school with the money I earned at a job that had no benefits and I have never taken out a student loan and never would. Sorry that was their CHOICE and THEY need to pay their bills and if it means taking a job scrubbing toilets to pay the bills then get scrubbing.

[sunniekiss]

Trust me I agree he has to pay his student loans off. He should have listened to his mother who strongly suggested he enroll in a local university where he could have lived at home. I always say you can't unteach stupid.
At first Sallie Mae wanted more than double his monthly income. There was no way possible for him to pay almost $2,500/month. Sallie Mae's first suggestion was for him to go back to school & incur additional student loan debt. We did eventually work with them to get the payments lowered but they are still high. He's never going to move out is he....sigh!
Sandy in Pennsylvania businesses are going to be required to pay at least a portion of employee's health care I believe starting in Jan 2013. We've already gotten paperwork about it & it is a huge factor why we won't hire any additional personel. The 2 companies he worked for are known for hiring tempoary. The one job my son had has been advertised in the paper 3 times this year.

[hblueeyes]

I heard that starting in 2014, 10% of your income is for student loan repayment. That means instaed of being student loan free in 20-30 years, it will take longer. Plus consolidating loans is already an option. There is nothing new here. No new plan or idea. He should ask the lenders to forgo the high student loan interest, to reflect todays rates. That would do more than what he is suggesting.

Me

[Jolie Rouge]

He will get hired on a "probationary peroid" of 90 days but on the 89th day he is let go. At first I was putting the blame on his shoulders for not working hard enoughta the job BUT when you see the same ad for the exact same position for the same company every 3 months it makes you wonder. The 90 day period is critical because after 90 days, with ObamaCare, the employer has to provide health insurance.


As much as I hate Obama - you cannot blame Obamacare on why your son is getting let go. There is NO requirement that they provide health insurance after 90 days. Trust me I handle this at our office and there is no provision for that for quite a few years.


This has been the policy for many companies going back 20+ years.... I used to work for Albertson's; the policy was if you worked "full time" for 8 weeks ( 36 hours pw) then you were moved into a full time position w/ benefits. So they would work people 40+ hours for 7 weeks... then schedule you 35. This is an old game and nothing to do with Obama or Obama care.

[SLance68]

Trust me I agree he has to pay his student loans off. He should have listened to his mother who strongly suggested he enroll in a local university where he could have lived at home. I always say you can't unteach stupid.
At first Sallie Mae wanted more than double his monthly income. There was no way possible for him to pay almost $2,500/month. Sallie Mae's first suggestion was for him to go back to school & incur additional student loan debt. We did eventually work with them to get the payments lowered but they are still high. He's never going to move out is he....sigh!
Sandy in Pennsylvania businesses are going to be required to pay at least a portion of employee's health care I believe starting in Jan 2013. We've already gotten paperwork about it & it is a huge factor why we won't hire any additional personnel. The 2 companies he worked for are known for hiring temporary. The one job my son had has been advertised in the paper 3 times this year.

There are lots of places now that are only hiring temporary. That is nothing new. The Obamacare stuff doesn't kick in for another year or 2 especially if you are a small business. Not hiring in 2011 is kind of silly especially if you are turning down work because of it.

Sallie Mae I thought was capped at 15% already so they can't ask for more than what the law allows.

Hblueeyes that is what is so silly about his "plan". He is just marketing to the "wall street protesters" who he needs to keep around to get re-elected. There are ways now to pay off student loans that have a large amount forgiven under their many different ways to pay them off.

[Jolie Rouge]

Obama's student loan debt-relief plan: Too good to be true?
President Obama has said he will help ease student loan debt, claiming he doesn't even need Congress to do it. It seems the Education Department has the cash to back him up.
By Gail Russell Chaddock | Christian Science Monitor – 5 hrs ago

President Obama on Wednesday is launching a new plan to lower the cost of paying back student loans for millions of borrowers – the latest installment in his bid to move a jobs agenda that bypasses a gridlocked Congress. At nearly $1 trillion, federal and private student loans now exceed US credit-card debt, posing a formidable repayment burden for many borrowers at a time of near-double digit unemployment.

The plan, to be implemented by executive authority alone, allows some 1.6 million students to cap their loan payments at 10 percent of their discretionary income starting in 2012. It also forgives the balance of student loans after 20 years of payments. Current law allows students to limit loan payments to 15 percent of income, forgiving debt after 25 years of payments, though few students are aware of this option.

In a related move, the US Department of Education, which now administers all federal education loans, is giving borrowers the option of consolidating federal and private loans at reduced rates. “College graduates are entering one of the toughest job markets in recent memory, and we have a way to help them save money by consolidating their debt and capping their loan payments,” said Education Secretary Arne Duncan on a conference call with reporters on Tuesday. “And we can do it at no cost to the taxpayer.”

Even before the official rollout of the program at a rally in Denver, House Republicans challenged how the president could move forward without congressional approval. “This is another example of the Obama administration making a major change in the program that we have not yet acted on in the Congress,” said Rep. Virginia Foxx (R) of North Carolina, who chaired an oversight hearing on Tuesday. “What authority does the department have?”

“I can’t answer that question,” said witness James Runcie, the Education Department’s federal student aid chief operating officer. “Whatever we’re told to do in terms of implementation and execution, we’ll optimize and do what’s in the best interest of borrowers and students.”

Part of the answer appears to be a move made by the Democrat-controlled Congress in March 2010. It ended taxpayer subsidies to private banks for student loans, meaning that the Education Department alone was responsible for handing out government money for such loans. That means the $60 billion set to go to private banks for student loans during the next 10 years is now tabbed for the Education Department.

Congress directed the Education Department to use that savings to expand Pell grants for low-and moderate income students to attend college. But many House Republicans who still oppose the move they say it has made the Department of Education one of the largest banks in the nation, largely unaccountable to Congress. “This is another example of the Obama administration making changes to federal education policy behind closed doors,” said GOP committee spokeswoman Alexandra Sollberger in an e-mail. “We are disappointed that the Department of Education chose not to engage committee members prior to announcing this plan to the press.”

Republican critics also note that the Education Department charges 6.8 percent for loans that cost much less, “creating a pretty big slush fund for the government,” said Rep. John Kline (R) of Minnesota, who chairs the House Education and Workforce Committee, at Tuesday’s hearing.

He tabbed federal borrowing for the program “at less than 1 percent” – yielding a large profit.

Education Department officials dispute that view. “Right now Direct Loans reduce the deficit,” says Education Department spokeswoman Jane Glickman. “I wouldn’t call it slush.”

The 10-year interest rate is dictated to the department by the White House's Office of Management and Budget (OMB), added Ms. Glickman in an e-mail. “In yesterday’s market, the 10-year rate was between 2 and 2.5. In the OMB projections, it is more like 3 for 2011.

The burden of some $1 trillion in outstanding student loans – up from $500 billion just five years ago – is a hot issue in the Occupy Wall Street protests. Students struggling with loans they can’t afford to repay blame the federal government for stripping away consumer protections “Every fundamental consumer protection has been specifically removed by our Congress for student loans,” says Alan Collinge at the Zuccotti Park protest site in New York on Sunday. “It’s led to horrible outcomes for the borrowers,” he adds. “The political will to crack down doesn’t exist.”

President Obama said in a statement on Tuesday: “Steps like these won’t take the place of the bold action we need from Congress to boost our economy and create jobs, but they will make a difference."

Unlike mortgage or credit-card debt, student loans can’t be eliminated through bankruptcy proceedings. With a sputtering economy, the investment in college doesn’t always pay off for students. In an interview on NBC’s “Meet the Press" on Sunday, GOP presidential hopeful Ron Paul called federal student loans a “failed program,” because it enabled colleges and universities to inflate costs.

http://news.yahoo.com/obamas-student-loan-debt-relief-plan-too-good-234242818.html

comments

So the plan is that more people who borrow money do not have to pay it back. Why would anyone lend money if that is the plan?

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This is a non-initiative because students already CAN consolidate their student loans and have a lower payment. Speaking of which, I worked 3 jobs while going to school and graduate school, and I was exhausted but never expected anyone else to pay off my loans.

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Ok, let's ask ourselves why the cost of higher education has skyrocketed and deal with that problem. People complain about wall street and banks, why not about all the money pumped into universities?

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I worked at a university for 10 years. What a scam this system is. Tenured professors are never held accountable for not doing their job. It's almost impossible to get rid of them, and a lot have side businesses making a lot of money. Of course the university pays for their benefits. Er i should say the students pay. Wonder why it's so expensive to go to school?

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I paid off my student loans. I paid for social security. Somewhere along the way, shouldn't I have at least gotten kissed?

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I had to pay mine off myself. That is the price of going to school.

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Umm - so why the hell did I bust my #$%$ to pay back my student loans?

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What part of "THEY SIGNED A LEGALLY-BINDING CONTRACT" is in question? How about attending community colleges instead of universities. You know - living within your means. Life Lesson 101.

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President Obama on Wednesday is launching a new plan ... the latest installment in his bid to move a jobs agenda that bypasses a gridlocked Congress.

This doesn't exactly sound legal. Congress passes laws, not the president unilaterally.

[hblueeyes]

Part of the problem with student loans was, is, the way they are handled. Some schools require you to get loans from certain financial institutions, higher rates and fees are incurred but if you need it, you have no choice to shop around. Illinois politican Madigan was one of many who benefited from these rules as money went to their chosen students and I am sure lined their pockets as well.

Me

[Jolie Rouge]

Obama tells students: 'I need your voices'
By JIM KUHNHENN - Associated Press | AP – 2 hrs 51 mins ago

DENVER (AP) — President Barack Obama urged thousands of enthusiastic college students Wednesday to make their voices heard, telling a boisterous crowd in Denver, "Young people, I need you guys involved. I need you active, I need you communicating to Congress, I need you to get the word out," Obama said at the University of Colorado, Denver. "Tweet 'em. They're all tweeting all over the place, you tweet 'em back."

The president took off his jacket and rolled up his sleeves to address the crowd of about 4,000 at a gymnasium at the university, the last stop in a three-day swing through the West that mixed high-dollar fundraising with new announcements of modest executive actions to circumvent Congress. To the university crowd, Obama rolled out plans to help students with loan debt. "We can't wait for Congress to do its job, so where they won't act, I will," Obama said. "I am going to keep doing everything in my power to make a difference for the American people, but Denver I need your help," the president said.

The crowd was friendly and loud, but partway through, protesters started shouting about a planned oil pipeline from western Canada to the Texas Gulf Coast that's drawn demonstrations around the country and outside the White House. "Say no to the pipeline!" one shouted, and they held aloft a banner reading: "Stop the Keystone Pipeline Project."

Obama paused to respond. "We're looking at it right now. No decision's been made and I know your deep concern about it so we will address it," he said. The protesters were escorted out. Young people and first-time voters were key to Obama's victory in 2008 but the president has work to do to get them motivated this time around, with the economy sagging and job opportunities scarce.

Obama's Western swing took him through Las Vegas, Los Angeles and San Francisco. Obama held six fundraisers in all, three of them in donor-rich California, which ranks at the top of states contributing to Obama's campaign. Obama also used the trip to launch a new phase of his campaign to jump-start the economy. Declaring "we can't wait," he announced executive actions to assist struggling homeowners and veterans, as well as graduates weighed down with student loans. He kept up his call for congressional Republicans to support pieces of his $447 billion jobs bill.

The visits to Nevada and Colorado took the president into volatile political battlegrounds where he fine-tuned his re-election message, contrasting himself with Republicans and tying the GOP presidential field to the congressional Republicans blocking the jobs bill.

http://news.yahoo.com/obama-tells-students-voices-180037954.html


Obama tells students: 'I need your voices'...

eh..ahem... "votes"

comments

Like we the poeple can afford to pick up Obama's tab.......you took the loan, you pay for the loan. Don't come to me to bail you out! Why isn't Occupy up in arms over this government bail out that Obama is signing into law?

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I'm proud to say that I'm a Democrat....have been all my life...BUT.....I'm sorry to say, that seeing which way this country is heading, that I CAN NOT, in good faith, vote for Obama again. Oh, by the way...I'm an Afro American, so this is not a racist decision. It's a decision that for me is the right thing for America right now!

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Why is it my responsibility to pay for other people's investments?

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All these student gimmes as a reward for maintaining low-paying jobs. Here's the perfect example of how Democrats cultivate and guarantee themselves a constant supply of loyal, hand-out dependent, democrat voters.

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Nothing is free. Someone has to pay for it sooner or later. Obama and the rest of the democrats just can't seem to grasp this reality.

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Obama says. "Let me make this perfectly clear." "Every American under my rule that wants a job may have one." "And all you need to get one is a passport to either China or our NEIGHBORING country to the south."

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What will it cost the US taxpayer for these handouts to those with student loans? What about those that pay or have paid off their loans, do they get something? Odamit will do anything, anything to get votes. Meantime he will probably veto that pipeline job which would have created thousands of jobs that Americans so desperately need. Where he says: "we can't wait.", well to him, "we can't wait.....until November 2012 either." We desperately need a change....

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Of course, Yahoo doesn't bother to report these what these new plans actually *are*... This guy loves to exploit the young, poor and uniformed. Mob rule 101

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He should talk to the gov. of Cal. FREE college to the fricken illegal's there. WE should be bitcn much more about that. It makes me sick.

[Jolie Rouge]

Obama offers cash-for-votes student loan policy
October 27, 2011

President Barack Obama’s new student loan policy will force working class Americans to pay the ballooning college costs of middle class Americans, and will also hinder needed reform of the bloated education sector, say critics.

Obama is “shifting the burden of paying for college to all of those Americans who did not graduate from college — the waitresses, construction workers, mechanics — and that should infuriate the taxpayers who worked hard to pay off their loans, who decided to live a modest lifestyle to pay off their loans,” said Lindsey Burke, an analyst at the Heritage Foundation.

Obama’s policy is also widening the class division between working-class Americans and those with college credentials, said Matthew Denhart, a researcher at the Center for College Affordability and Productivity in Washington, D.C.

Whatever the real costs, the new subsidy could benefit Obama’s standing among the disenchanted voters in the coveted 20-something demographic. Almost 70 percent of that group voted for him overwhelmingly in 2008.

http://patriotupdate.com/13929/obama-offers-cash-for-votes-student-loan-policy

comments

America is the land where the people who do things right get punished and those who do not get rewarded. I for one believe that we all have the gift of being able to make decisions. If we fail, it is because we made the wrong decisions. If we succeed, it is because we made the right decisions. I don’t think people should be punished for someone else’s bad decisions.

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A socialistic agenda with its propoganda being pushed in the colleges by the professors who think that socialism could still be made to work. Our colleges have become indoctronation centers for socialism. Look at what is allowed and what is not on a college campus.

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He is doing all he can to bypass congress with these executive orders. I think that executive orders should be seen for what they are, ILLEGAL. I do not care that other Presidents have used them, that does NOT make them legal. They are an usurption of the power of Congress and against the Constitution.

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What no one seems to be saying is that this is a direct payout to his Progressive/Liberal backers. They are THE single biggest cause of the sorry state of affairs of American education. They, and the Unions they comprise, from the pre-school through Graduate school, make up almost 90% of the educators in America today. And they are brainwashing/indoctrinating nearly 100% of our young people.

The first order of business after the next election is to COMPLETELY revamp support for education and to abolish the Dept. of Education. Then legislate TIGHT controls over which States and schools get ANY money from DC.

They have, collectively, dumbed down our youngsters to the point of near illiteracy.

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I’m really having a hard time figuring out why we need a Congress when we have a king. This guy violated the constitution and there is no uproar. He usurps the power of the purse which was given to Congress, but, Congress doesn’t care. He ignores the War Powers act and Congress doesn’t care. His hoards of officers are eating out our substance and Congress doesn’t care.

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If there were more job openings for Americans who are more than willing to pay into payroll taxes, the economoy would improve fairly quick. If the president were’nt allowing illegal immigrants amnesty and giving them jobs permits, more Americans could pay taxes to boost the economy. If fewer people worked government jobs and instead worked in the private sector, they wouldn’t be drawing down our Treasury. The rate of unemployed Americans is what’s destroying our economy and that is one of Obama’s devious plans, no doubt about it.