With the drama playing out in the Senate about whether a bill responding to the mortgage crisis as well as enhancing regulation of Fannie Mae and Freddie Mac will get out of the Banking Committee with enough Republican support to both pass and avoid a veto, a Washingtonian might be forgiven for not paying attention to what's going on in the states. (Some wonder whether we ever do.) But in fact, there is a good deal of action-as well as frustration at the lack of activity inside the Beltway.

One unfortunate growth industry in recent years has been the rise of alternative financial institutions. These are the payday lenders, auto title companies, and check cashers who offer access to cash to virtually anyone that walks through their doors but on horrific terms. I mean really bad.

Payday lenders often charge about $15 for every $100 borrowed on a two-week loan. This would be equivalent to an annual interest rate is approaches 400%. It is an outlandish deal that many people take because they feel like they dont have other options. The problem is that many people in America don't have basic bank accounts, so they conduct their everyday financial transactions with these stores just move their money around. Our colleagues at the Center for Responsible Lending have been committed to ending these abusive practices and are working with people all across the country to change the state laws that govern these transactions. The need for the service is real but the terms are criminal. There ought to be a law...

Two new studies released this week aim to help policymakers make sound choices about early education investments.

In Meaningful Investments In Pre-k, researchers from the Institute for Women’s Policy Research estimate what it actually costs to provide quality pre-k programs. To estimate the costs of quality pre-k programs, the IWPR researchers identified the characteristics of high-quality pre-k programs—qualified teachers, small class sizes, appropriate educational materials, and so on—and arrived at research-based estimates of what it actually costs, on a per-child basis, to provide those things. They also estimated the cost of appropriate facilities and of state-level support and oversight infrastructure needed to ensure pre-k quality.

The ruling is here. The AP story is here. I'll leave the legal analysis to the lawyers, and offer a political explanation. This ruling invalidates Prop 22, the 2000 ballot initiative that barred same-sex marriage in California. And it likely means that local officials around the state will permit gay and lesbian couples to marry. Such marriages will raise this issue's profile politically, both in California and in the presidential race. All eyes this fall should be on the November initiative in California to establish a state constitutional ban against gay marriage.

The Department of Education recently announced modifications to its lender of last resort program as part of its effort to prepare for the possibility of federal student loan shortages as a result of the credit crunch. The net result is a contraption Rube Goldberg would be proud of -- what in effect are direct student loans that are more difficult to administer and more costly for taxpayers than the regular Direct Loan program.

The lender of last resort (LLR) program is designed to ensure all students have access to Federal Family Education Loans (FFEL) by requiring that guaranty agencies provide loans to students that have been turned down by conventional lenders. Though we support guaranteeing access to student loans, the similarities (and costly differences) to the regular Direct Loan program make LLR a significantly inferior option. In fact, Washington appears to be trying to avoid the more obvious and efficient solution -- boosting the regular Direct Loan program.

This is also posted at Fox and Hounds Daily, a new news and commentary site focusing on California and business.

There is no longer any doubt about one thing in California politics: Gov. Schwarzenegger is willing to die on the cross of budget reform.

My conversations with people inside and outside the administration, and a review of news leaks in advance of the governor's revised budget proposal this afternoon, make it clear that he is doubling down on budget reform. For a man with a reputation for twisting with political winds, he is doing the opposite here, trying again to pursue reforms as he did in 2004 and 2005. He is so determined to get voters to adopt his budget reform (a spending-side proposal based on a rainy day fund and more power for governors to make mid-year cuts) that he is risking what's left of his governorship.

One piece of this approach is undeniable smart, As the Sacramento Bee reports, he's pulled back from his proposal to include education in spending cuts and is now proposing to meet the Prop 98 minimum on education. His cuts were fiscally responsible -- but they were politically poisonous to his project of budget reform. By dropping the unpopular cuts, he is making a strategic move that signals his top priority--budget reform or bust.

In a recent post on their public policy blog, Google expands upon their geolocation proposal for the television white spaces:

We believe it's possible to marry the benefits of mobile devices for consumers with the protection of fixed devices for TV broadcasters and other incumbent users of this spectrum (including wireless microphones) -- in part by using geolocation technology that would prevent a white space device from transmitting over channels that are in use.

Some observers, particularly in the public interest community, have asked whether geolocation might compromise the promise of the TV white spaces, particularly with regard to "mesh networks." Happily, this need not be the case. In a new white paper, we explain how our proposals can provide the protections afforded to incumbent users by geolocation, without significantly limiting the promise of mesh networks. We also describe how this technology can support use by the public service community in times of natural disasters and in other emergency situations.

Health Affairs, as you know if you've read us or any other health policy blog this week, devoted its May/June issue to health reform, and held a forum on health politics in DC this week. (Merrill Goozner did a nice summary including an update of what the Congressional Budget Office is doing to gear up for health reform.) They also did a conference call recently summing up the political landscape with Bob Blendon of Harvard's Kennedy School and School of Public Health, Julie Rovner of NPR and Robert Laszewski, of Health Policy and Strategy Associates Inc. and the Health Care Policy and Marketplace Review blog. Here's a recap from the Health Affairs blog, and here's the transcript.

The New York Times reports that PBS is bringing back The Electric Company, a beloved 1970s-era children's television show that uses SNL-style sketches to help children develop literacy skills. The Electric Company was produced by Children's Television Workshop (since renamed Sesame Workshop, which will be producing the new show), the same organization that produces Sesame Street. While Sesame Street is focused on preschool aged students, The Electric Company is pitched to early elementary school students ages 6 to 9. Among other accomplishments, The Electric Company launched the career of Morgan Freeman, appearing here as recurring sketch character Easy Reader.

Representing the economically troubled state of Michigan, home to the auto industry, Democratic Sen. Debbie Stabenow just has to look around her to see how sky-high health care costs have eroded the global competitiveness of U.S. industry. Still, she told a New America-sponsored forum on Capitol Hill the other day, it's "nice to be joined by the data in something that I have been talking about for a long time."

Stabenow, the opening speaker at our forum about employer health costs in a global economy, described how the "most expensive and crazy structure in the world"—aka the U.S. health care system—was damaging the economy, hurting industry, threatening the middle class. "We are literally losing jobs," she said, spending more than our competitors on health but having less to show for it. (Click here for the webcast, here for the study, here for our earlier post.)