Decisions on students, health care and immigration pending
Members of the media camp outside the U.S. Supreme Court June 21, 2012, in Washington, DC as the Supreme Court is expected to hand down its ruling on the Healthcare Reform Law before the end of its 2011-2012 term.
Jeremy Hobson: A decision is expected from the Supreme Court on President Obama's healthcare overhaul, which is sure to have big economic implications however it is decided.
But there are some other high stakes battles going on, and Marketplace's Washington bureau chief John Dimsdale joins us now to discuss. Hi John.
John Dimsdale: Hello Jeremy.
Hobson: So let's first talk about this other case that is before the court; we're expecting a decision on it as soon as today, and that is Arizona's immigration case. What's at stake there?
Dimsdale: Yeah, this is a law that gives police new powers to detain people who can't prove that they're citizens. The court's decision on whether that's constitutional is going to have huge implications for businesses that depend on cheap, migrant labor. At least five other states have similar laws and are just waiting to hear if they can enforce them.
Hobson: OK so we're waiting for that, and then across the street from the Supreme Court, in the U.S. Capitol building, in Congress there are a few other issues that are facing an end-of-month deadline. Let's first talk about a doubling of student loan rates, possibly.
Dimsdale: Yeah -- seven and a half million students with outstanding loans will see their interest rates go from 3.4 to 6.8 percent in July. It'll cost the government $6 billion to keep rates low. Democrats want to pay for that with a tax increase; Republicans want spending cuts.
Hobson: All right, what about the federal highway funding bill -- this is the transportation bill. It's been debated back and forth but still no agreement on it, and I guess the funding could come to a halt at the end of the month if they don't come up with a solution?
Dimsdale: That's right. Congress has had to pass, already, nine short-term extensions as this funding bill expired years ago. Negotiators are trying to put together an agreement on a two year, $109 billion program. But if Congress can't come up with an agreement by this week, leaders say they'll pass instead yet another short-term extension, just to keep the program going past the election.
Hobson: Marketplace's John Dimsdale in Washington. And for some analysis, let's bring in Mark Zandi. He's chief economist with Moody's Analytics. Hi Mark.
Mark Zandi: Hi, it's good to be with you.
Hobson: First of all, do you think Congress is going to be able to cut a deal on these two bills -- student loans rates and transportation?
Zandi: Yes, I think they will. I think they are important to get done, they matter to a lot of people. I think it's a matter of debate and negotiation but at the end of the day, they'll come to terms of this.
Hobson: And what about the Arizona Immigration Law that John talked about -- just economically speaking, what's at stake in your point of view?
Zandi: Well, this too is kind of the tip of the iceberg. We've got a lot of issues with regards to immigration law. Our economy depends critically on immigrants in lots of different ways, and so we need to figure out a rational way of allowing immigration to occur, because businesses rely on immigrants -- both unskilled workers to help in agriculture but also very skilled workers that do very important jobs throughout the economy. So we need to nail this down; it's just one step in a very long road.
Hobson: And what's your guess on what's going to happen with the health care bill?
Zandi: Your guess is as good as mine. But let me say this: you know, it is very, very important -- obviously to our health care system -- but from a macroeconomic perspective, I don't think this is going to make or break things for us.
Hobson: Mark Zandi, chief economist at Moody's analytics, thanks so much.
Zandi: Thank you.