CONGRESSIONAL BUDGET FOR THE UNITED STATES GOVERNMENT FOR FISCAL YEAR 2009--Continued -- (Senate - March 12, 2008)
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Mr. KENNEDY. Mr. President, I welcome the fact that at the real start of this debate on the Budget Act, we have an amendment that reflects the best judgment of Republicans and Democrats alike in the Senate, which is so key to the future of our country, and to listen to our colleagues on both sides of the aisle at a time when, on so many issues, there is divisiveness, but on this issue, there is a real coming together in the Senate on this item for the support of the America COMPETES Act.
I wish to commend those who have been a part of this process over recent years. It has been truly a bipartisan effort. We have listened to Senator Bingaman, Senator Alexander, and others who have been a part of this whole process, and it was an enormous achievement this last year when the bill passed the Senate. Now, we are impressed by the fact that those who were involved in making sure this was going to be achieved are committed to making sure we are going to have muscle and bones on this project in the form of providing the resources which are necessary to make it effective. This is, I think, one of the most important undertakings we will have in this debate and discussion on the budget, and I am very hopeful we will get a strong vote in support of this amendment.
Very briefly, I think all of us understand the average family in this country is exceedingly hard-pressed at this time. They are wondering whether they are going to be able to pay their mortgages, and we are finding out that many are unable to pay their mortgages and they are losing their homes, or they have the threat of losing their homes. It is difficult to imagine, I think, for many of us, when parents go to bed at night and wonder whether they are going to be able to afford their mortgages and maintain their home for themselves, their families, and for their children, but it is happening in too many parts of this country. At the same time, those same parents are wondering if they are going to be able to heat their homes, at least in my part of the country. With the fact of the extraordinary explosion of the cost of home heating oil, we find so many families are hard-pressed to be able to provide heating for their homes.
These are families who have worked hard, who have played by the rules all their lives, and they are wondering now about what the future will hold for themselves and for their parents and for their children. Are they going to be able to make sure their parents are going to be able to live their golden years in peace and dignity? They are hard-pressed to provide the extra help and assistance to them so they can afford their prescription drugs. They have seen the cost of tuition go up and continue to go up, and they wonder if they will be able to educate their children; while fuel and gas go up, whether they will be able to fill the gas tank to get to their jobs where they are working. There is enormous anxiety. There is also the concern about rising health care costs. There is enormous rising anxiety out in the country. People are wondering: Why should my job be at risk? I have worked hard. I have played by the rules. I have done everything I possibly can, and still I wonder whether in a few years, the opportunities for my children are going to be as great as opportunities were for me. I know my parents sacrificed so I would be able to make progress, and now I wonder whether my children are going to be better off than I was. That is going on in home after home across this country.
It is as a result of the failure of economic policy. It is a failure of fiscal and monetary policy over the period of recent years. It is not the fault of these particular families; it is the fault of economic policy and giving the kinds of investments in our country and investments in individuals that are necessary in order to have a strong economy. We know how to do it. We have seen it done. I am not going to take the time of the Senate to go back over the history where it has been done and it should be done.
So we are faced with where we are today, and this calls for immediate assistance for these families. We have seen the efforts that have been made in terms of housing and in terms of the unemployment, the help and assistance of fuel assistance and food stamps and others to try to address the immediate kinds of problems families are facing.
We also have to look at where we are going to be as a country in terms of the future, where we are going to be in 3 to 5 years as we are seeing this whole global economy challenge the United States. One overarching fact is that the future is going to be the knowledge economy, the economy that puts the premise on knowledge and information and education. That is where the future is going to lie. That will be the great competition between the countries of Asia and the United States. We are thinking about how we are going to address that, and the COMPETES Act is one of the important solutions to this challenge.
Mr. President, if we look at this chart here, it is interesting in terms of U.S. students. To be globally competitive, we need to tackle the achievement gaps. U.S. students from high-income families outperform students in other countries in math, while U.S. students from low-income families lag behind. When you are talking about international competitiveness, we find that U.S. students who come from higher income families are able to go to schools that are able to afford the good teachers, are able to out-compete the students in other parts of the world. It is no mystery about how that should be done. But students who come from lower income families are not able to keep pace. This legislation is designed to, among other things, reduce this gap that exists now in our country.
Look at this chart. We have more math classes in high-poverty schools that are taught by teachers without a major in that subject. You have low-poverty secondary schools where the percentage of secondary school math classes taught by teachers without that major is 26 percent. In the high-poverty schools, it is 56 percent. Much of it comes down to teachers and the importance of investing in them, to make sure they are going to have the skills to serve in communities and in school districts all over the country, and so they are going to have the competency. If you are not going to have the high-quality teachers in underserved areas, then you are going to have those kinds of results we saw with the other chart where American children are going to fall further and further behind. It is in this very area that the COMPETES Act is directed.
That is one of the important reasons why this legislation is so important and why the resources and the investment are so much in the interest of this country and its future in terms of the ability to be able to compete.
Mr. President, this is a sound amendment that makes a great deal of sense for the reasons I have mentioned here and other reasons as well. I am hopeful that the Senate will accept it with an overwhelming vote.
Mr. President, I suggest the absence of a quorum.
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AMENDMENT NO. 4151
Mr. KENNEDY. Mr. President, I ask unanimous consent that the pending amendment be set aside, and I call up amendment No. 4151.
The PRESIDING OFFICER. Without objection, it is so ordered. The clerk will report.
The legislative clerk read as follows:
The Senator from Massachusetts [Mr. KENNEDY] proposes an amendment numbered 4151.
Mr. KENNEDY. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
(Purpose: To add a deficit-neutral reserve fund for increasing federal student loan limits to protect students against disruptions in the private credit markets)
On page 55, line 18, after the word ``program'' insert ``or increasing Federal student loan limits''.
Mr. KENNEDY. Mr. President, the amendment I am offering is intended to give additional protections for students and families struggling to pay for college.
Americans are anxious about the slumping economy and how it affects their families. They are losing their homes. They are seeing skyrocketing health costs. They wonder if they can afford today's gas prices to drive to work every day. The cost of heating their homes has jumped at least 50 percent in the last 2 years. And now they are hearing that the loans they rely on to afford the high cost of college may be at risk. Financial aid officers in some colleges are telling them that loans may not be available when the school year starts this fall.
What we are seeing is that the credit crunch that is affecting the mortgage industry and many banks and corporations may affect the ability of families to secure student loans at fair rates so their children can go to the college of their choice.
We are here today to say that we cannot allow the credit crunch to prevent our young people from going to college. The ability of young Americans to pay the high cost of college should not be determined by the quarterly earnings of banks.
There are three steps we must take to help families cope with the cost of college education. First, we must increase our commitment to Pell grants and other aid. We do that in this budget. This budget meets our promise to increase the maximum goal to $5,400 by the year 2012.
This chart represents the legislation that was passed last year where we provided additional funding for the Pell grants. The budget resolution showed that help is on the way for more than 5 million Pell grant recipients across the country. This chart illustrates how the budget resolution will help hard-pressed young people, who are in the educational system.
Second, we should make sure that secure loan options are available to students in case the market collapses. We have programs now that are backed up by the Federal Government that are not affected by the market. Those are the direct loan programs in which the Federal Government makes the loans and not the banks--and the lender of last resort program that allows guaranty agencies to become lenders with the backing of the Federal Government.
Congressman George Miller, the chairman of the House Education Committee, and I have urged the Secretary of Education to make sure these two options are fully available to students and colleges should they be needed.
Third, we should strengthen the federally subsidized student loan program, and my amendment does that. We all know that student loans are indispensable for millions of students and parents struggling to pay for college. In the last 20 years, the cost of college has tripled, and more and more students are forced to rely on student loans to pay the high costs of a college education. In 1993, less than half of all students had to take out loans. But in 2004, nearly two-thirds had to take out loans to finance their education. This chart illustrates this point, showing the increase in students taking out loans from 1993 to 2004.
The average student now graduates with more than $19,000 in debt--a dramatic increase on the financial burden on the students and their families.
In Massachusetts, the cost of attending a 4-year public college increased 59 percent between 2001 and 2005, while family incomes only went up 20 percent. This chart illustrates where the family income increased and where the cost of attending college has increased even more.
The best way to help students and families afford college is to increase grant aid. More aid up front means fewer loans and less debt on graduation day.
Last year, the new Democratic Congress delivered on a 7-year old promise by President Bush to raise Pell grants. The maximum grant will increase to $5,400 by 2012--an increase of $1,350 over the level at which it had stagnated under this administration. This increase means that students eligible for the maximum Pell grant will have to borrow $6,000 less in loans over the course of their college career.
The effect of borrowing less saves the average student about $6,000 in a reduction of their debt. The legislation enacted last year also makes Federal loans less costly for students by reducing interest rates. These benefits, however, will be meaningless if students cannot obtain the loans to pay for the college of their choice.
The current crisis in the credit market is making it more difficult for student lenders to obtain capital. This has cut into the lenders' profit margins, causing some lenders to pull out of the student loan market and causing those operating outside the Federal loan program to cut back on lending to high-risk borrowers.
So far, the attractiveness of the guarantee in the federally subsidized program is encouraging other lenders to fill in the gaps in that program. Since interest rates in the Federal program are capped, students are protected from exorbitant interest payments.
But many families need additional loans beyond Federal loans while they are in college. We have a responsibility to ensure they can obtain the loans at affordable rates.
One step we can take is to increase the amount that students can borrow in low-interest, federally backed student loans, which means they won't have to rely on the higher cost, riskier private loan market.
The amendment I am offering today expands the deficit-neutral reserve funds for higher education in the budget resolution so that Congress can take whatever action is needed to increase the amount students can borrow under the Federal programs.
Over the last 20 years, as the cost of college has continued to skyrocket, Federal student aid has essentially remained flat. As this chart shows, the cost of attending a 4-year college has tripled--from about $4,000 in 1987 to $12,000 today. Over the same period, the amount of Federal assistance available to students in grants or loans has been essentially flat.
This goes back, if you extend these lines to 1965, to when they passed the Higher Education Act. The basis for passing the Higher Education Act in 1965 was a national commitment, which was debated in the 1960 campaign, heavily debated, that this Nation was making a commitment to the young people of this country. Any young person who was able to gain entrance into a school or college of their choice would be able to, on the basis of academic merit, put together sufficient grants and loans--and what they were able to earn themselves--to be able to go to any school or college in this country and come out relatively free from indebtedness. That was what the debate was at that time.
But look how we have betrayed that commitment.
We have seen that assistance to the students has become basically flat, but the extraordinary increase we have seen in college costs has had a dramatic impact, obviously, on the students and their ability to go to school and on their income.
I wish to illustrate the point we are trying to make with this chart.
This is a typical family in my State of Massachusetts. Let's say the median family income is $68,000 which is higher than the national average but not by much, maybe $10,000 or so. Now, the expected family contribution is $8,000 to $10,000. The median cost of college is $17,000. So after all of the grants and loans, the family still has to make up $2,675 in unmet need. This assumes they can even, with this amount, put up the $8,000 to $10,000. Many of these families have two, three, four, or five children and are hard-pressed even to meet this kind of commitment, but they still have this to pay.
If a member of this family misses a payment, a car payment or some other credit card payment, they will be forced to pay the most exorbitant high interest rates, which will result in paying thousands and tens of thousands of dollars more in interest costs.
We address this very important point right here with this legislation. It might not seem like a very considerable amount, but it is the difference between a student going on to college or not attending college.
Mr. President, we have talked to the Budget chair on this issue, and we understand we will be moving on to other amendments. This is a very important area. The impact of the economic challenge we are facing is reflected most particularly in housing but spills over in terms of students and their families. This will only be used if we have the kind of emergency we hope will not take place, but it will ensure that this Senate is going on record to say to families in this country that we are aware of the challenges they may very well be facing, and if those develop, we are going to have some assistance for them and for their family so that the value and worthwhile effort to continue the education of their children in the family will be able to continue.
Mr. President, I thank the chairman of the committee for the opportunity to present this, and hopefully later in the discussion there might be an opportunity to have this favorably considered.
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Mr. KENNEDY. Mr. President, I thank the Senator, and if he will yield for a moment, I want to thank him for his comments.
As he has mentioned, we had the opportunity to follow the rules of the Senate in getting the final resolution and judgment, which was basically supported in a very strong bipartisan way, ultimately, to move in that direction. But, as the Senator pointed out, we have provided increased opportunities to more than 5 million of the children of hard-working Americans who are hard-pressed trying to go on to continue their education with the enhanced Pell grants.
Included in that legislation was the loan forgiveness program that said: If you work in a public service profession, if you work with special needs children, if you work as an assistant district attorney, if you work as a legal aid officer, or if you work in areas of education, you will be able to get your loan forgiven.
We also, as the Senator knows, put the limitation on monthly repayment amounts, so that individuals, idealistic young people in America who want to go into some form of public service, would not pay more than 15 percent of their income to pay off their debt. This gives a pathway to millions of young people in this country who want to give something back to their local community or their State or their country through some form of public service. This will enhance their opportunity to do so.
I must say, of course, that we would not have been able to do that had we not had the chance through the Budget Committee, in compliance with the rules of the Budget Committee, to ensure that we were able to save hundreds of millions of dollars that went to deficit reduction. As a result of the leadership of the Budget chair, we were able to do something good for students but also to do something valuable and worthwhile in terms of the budget. So I thank the chairman of the committee for the opportunity and for all his cooperation and help.
Mr. President, I yield the floor.
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Mr. KENNEDY. Mr. President, as we all know, the Federal budget is a statement of the Nation's priorities. I want to commend my good friend from North Dakota who chairs the Budget Committee for setting the right priorities for America in this budget resolution.
Our Nation is enduring profound changes as we adapt to the global economy. It seems like every day there is more bad economic news. Savings are falling and debt is rising. Americans now collectively owe more than $900 billion in credit card debt.
Foreclosures are skyrocketing: 200,000 families each month are at risk of losing their homes. Bankruptcies soared by 40 percent last year, and are expected to rise even more this year. Entire industries are disappearing, leaving workers and communities devastated in their wake. And unemployment is up and going higher.
And there is more bad news for America's working families. Now, for the first time in 5 years, we have seen job losses for 2 months in a row, a sure sign that the economy is headed for a recession. Employers cut 63,000 jobs in February, the worst job losses since March 2003. And it is only likely to get worse.
Economists foresee a significant unemployment problem for at least the next 2 years. Goldman Sachs has predicted that the national unemployment rate will rise to 6.5 percent by the end of 2009. Many States around the country are already struggling with high unemployment. Michigan's unemployment rate is 7.6 percent. South Carolina's is 6.6 percent. Ohio just hit the 6 percent mark as well.
And workers who lose their jobs are having more and more trouble finding work. Today, roughly 18 percent of unemployed workers have been looking for a job for more than 26 weeks, compared to only 11 percent before the last recession. That is a dramatically higher level of long-term unemployment, and it is a deeply troubling sign.
These aren't just statistical trends or indicators. Every bad number reflects a real hardship in people's lives. For these workers and their families, a recession isn't just part of the business cycle; it is a life-altering event from which they may never recover.
With this kind of uncertain economic future, we need a budget that puts a priority on stimulating the economy and giving hardworking Americans the support they need to weather the storm. If we want an economic recovery that works--if we want real opportunity and sustainable growth--that effort must start and end with working families.
This budget sets the right priorities to address these challenges. I commend Senator Conrad for including room in the budget for a second stimulus package. This will allow us to take what Democrats know is the right path during a recession, putting working people's needs first. That means extending unemployment insurance benefits for the long-term unemployed, increasing food stamp benefits, and providing State fiscal relief.
This budget further aids those caught up in the economic downturn by setting aside funds that can be used for unemployment insurance modernization, a much needed reform to our social safety net. Many workers who lose their jobs today are finding our unemployment insurance system leaves them out because federal laws haven't changed since the 1960s, even though the American workforce has changed dramatically since then. In 2006, only one third of unemployed Americans received unemployment benefits.
These workers have paid into the system for years and it is wrong to leave them out when they need help the most. This budget will help us to give States the resources and flexibility they need to serve working families more effectively.
These are all important measures, but strengthening the safety net during a crisis is not enough. We need to redouble our efforts to restore economic opportunity for working families. This budget looks beyond the short term. It makes a priority of investing in the preparation workers need to compete in the 21st century global economy. Comprehensive education and job training programs are the keys to that preparation.
At times like this, we have turned to education to help strengthen the Nation. We did so when developing and expanding the Nation in the early 1800s, when transitioning World War II veterans back into society, when launching the war on poverty.
We have seen time and again that education is one of the best investments we can make in the Nation's economic strength. For every dollar invested in the GI bill, the Nation reaped $7 in return. Research from the OECD shows that when we increase the average number of years of education by just 1 year, we can increase our GDP by 3 to 6 percent. For every $1 invested in high quality early preschool programs, our society benefits from a $13 return.
The Nation's prosperity depends on our ability to prepare our citizens to face a changing economy. But as other nations modernize their education system, America must also break free of the shackles of a school system designed for the industrial age, not the information age.
We know the school model of centuries past doesn't cut it in today's economy:
A single, isolated teacher lecturing to a class of 30 students reflects the production-line model of the Industrial Age. Today, our knowledge economy demands smaller classes with individualized instruction and a focus on more advanced skills.
Fifty years ago, only one-third of mothers worked outside the home. Today, twice as many do, which means nearly 7 million children are left without adequate supervision after school.
High schools were designed in the last century with the goal of graduating only 20 percent of students. A 16-year-old could drop out of school, get a job, and support a family. Today, over 60 percent of jobs require not only a diploma, but postsecondary skills--either a college education or advanced career and technical education. We need high schools graduating all students with college- and work-ready skills.
We wouldn't think of sending our astronauts to Mars in the same spaceship in which President Kennedy sent them to the Moon.
We wouldn't think of defending our troops with the armor they used in World War I.
Why do we teach our students using outdated schools?
This budget provides investments critical to ensuring that we have an education system compatible with the 21st century knowledge economy.
The resolution increases funds for education programs by $6 billion.
It provides $3.5 billion for our public schools, the largest increase in funding for K-12 education since 2002.
This increase can put us on track to double title I funding in 5 years.
With those funds, our schools can:
Hire 35,000 new teachers to reduce class sizes and provide students with individualized attention; provide high quality professional development for 100,000 teachers to assist them in teaching 21st century skills; and enroll 1 million more children in high quality afterschool programs.
This is a real investment of new resources to help struggling schools. The funding for K-12 education will enable schools to implement needed reforms to turn around. It will allow states, districts, and schools to improve middle and high schools, so that students will stay in school and graduate.
The budget resolution also provides $424 million for Head Start, which will provide more children with the services they need to ensure they start school ready to learn.
It increases funding for the Individuals with Disabilities Education Act by $340 million, so that students with disabilities have the support and opportunities they deserve.
It also provides needed increases in funds for higher education. Last year, we passed a historic student aid bill and, with the Budget Committee's efforts and leadership, we were able to chart a course to increase the maximum Pell grant to $5,400 in 5 years. This budget resolution helps fulfill that promise by providing funds for a $4,800 maximum Pell grant in fiscal year 2009.
This budget also includes $414 million more for job training programs, which is greatly needed after years of cuts in job training programs under this administration. This funding will allow 165,000 more workers to retool their skills for 21st century jobs.
We know job training helps workers learn new skills, become better equipped for jobs in demand, and earn higher wages. As families across America struggle to make ends meet, and watch as foreclosures increase, jobs go oversees, and benefits vanish, job training can help provide real security for workers.
The Senate budget resolution makes key investments in strengthening our economy and provides the building blocks for a prosperous future. It supports good schools for our children, good jobs for workers, and a fair shot at the American dream. It puts the Nation on a path to reinventing our public schools and strengthening our education system so that we are competitive in today's knowledge economy.
Unlike the budget before us, the President's budget ignores the demands of today's economy and the needs of our students, our teachers, and our schools.
In his message to Congress, the President said his budget was based on ``clear priorities that will help us meet our Nation's most pressing needs while addressing the long-term challenges ahead.''
But those priorities are not reflected in the numbers I see in the President's budget proposal for the Department of Education.
For too many years under a Republican Congress and administration, we have seen a great contradiction between the administration's rhetoric on education and their budgets.
They say that education is the cornerstone of our competitiveness in the global economy, but then they underfund the No Child Left Behind Act by $14.7 billion this year alone--leaving 3 million children without needed services.
They say that education levels the playing field for disadvantaged students, but then they deny a million poor students the ability to come to school ready to learn by flat funding Head Start.
They say that education is the key to America's future, but then they allow children to attend crumbling schools by blocking funding for school construction.
They say that a good teacher can erase the harmful effects of poverty, but then they cut funding for teacher preparation and support.
They say that education is the gateway to the American dream, but then, with 7,000 students dropping out of school each day, they cut a $1.3 billion program to provide career and technical education for at-risk high school students.
They say that the good jobs of the future require a college education, but then they cut campus-based grant and loan programs and eliminate programs that ensure that low income, first generation students are prepared for and successful in college.
We must do better than this. The Nation, and the Nation's children, deserve better than this.
It is time to stop making empty promises. It is time to act.
It is time for a new, bold commitment to investing in education, to give teachers the support they need and the opportunity to go further in their careers, to support schools that need to turnaround, to help every student reach graduation day, to open the gates to college for all students, regardless of family income.
When a student walks through the doors of a public school, they should be opening the doors to opportunity, to higher education, to a good job, to a better life.
The Senate budget resolution puts an end to the empty promises. By making education a priority, it takes bold action to address the mounting economic concerns and it is about time.
Likewise, this budget takes action to address the growing health concerns that threaten the not only the health of our families, but also our economic well-being. It rejects the irresponsible budget cuts for NIH included within the administration's proposals, which would result in NIH being funded at $1 billion less than is needed just to keep pace with inflation. The budget resolution is a good basis for further strengthening of the NIH budget, and I look forward to working to see that NIH has the support it deserves.
Investment in NIH is essential not just for medical progress, but for our economic security too. The United States has a long tradition of being a global innovative leader but we can't take our leadership for granted. Today, it's at risk. Thirty years ago, U.S. researchers published 90 percent of all scientific literature on information technology. Today, it's less than half. Unless we invest in the life sciences, the story will soon be the same for biotechnology.
The budget also includes an important reserve fund for the millions of Americans suffering from mental illness whose insurance does not cover their treatment. Lack of equitable insurance coverage for mental illness is not only a civil rights issue, but it's also an economic issue with serious consequences. Recently, the National Institute of Mental Health revealed that mental and addictive disorders cost our country more than $300 billion annually. This includes productivity losses of $150 billion and $70 billion in healthcare costs. The reserve fund provided in this budget is a major step forward in end insurance discrimination and making our country more productive.
The budget before us today also makes a commitment to our elderly and disabled citizens who are capable of living in their community, but are denied the supports they need. With the proper support, these Americans are able to live and flourish in the community. But too often they have to give up the dignity of a job, a home, and a family so they can qualify for Medicaid, the only program that will support them. That is why we introduced the CLASS Act last summer, so citizens get the services they need so they can remain in their community and lead a full life. This budget includes a reserve fund to support the infrastructure necessary to save Medicaid over the next decade and help all our citizens have a chance realize the American dream. It also will allow the parents and children of these citizens who have had to quit their jobs to care for a loved one to reenter the workforce.
I commend my colleagues on the Budget Committee, and all their staff, for their hard work in recent months. The Senate budget resolution represents a strong commitment to American families across this country in this time of economic uncertainty, and I strongly urge my colleagues to support it.