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Senate Amendments To H.R. 3590, Service Members Home Ownership Tax Act Of 2009, And H.R. 4872, Health Care And Education Reconciliation Act Of 2010

Floor Speech

Location: Washington, DC


Mr. PETRI. Mr. Speaker, I rise in opposition to H.R. 3590 and H.R. 4872. I certainly agree that it is time to fix the health care system in the United States so that all Americans have access to quality, affordable health care. However, the path we are considering takes us in the entirely wrong direction. And this reconciliation bill only makes worse the Senate amendment considered by the House today. Overall, it will break the bank because it is filled with budget gimmicks to hide its true cost. It imposes over $500 billion in new taxes as our fragile economy struggles towards recovery. It makes significant cuts to Medicare, including to Medicare Advantage Plans which will surely eliminate or reduce benefits to the 216,000 beneficiaries in Wisconsin. It gives the government unprecedented authority over the regulation of health insurance, which will lead to increased costs for those who currently have health insurance.

We need the right reforms to eliminate waste throughout the system and reward high quality low-cost care. We should be choosing approaches which give consumers incentives to use their health care dollars wisely. Instead, we are going in the opposite direction by turning decisions over to government bureaucrats.

Instead of getting everybody into the old, dysfunctional system and then figuring out how to pay for it, we should emphasize advances in efficiency so that more people will be able to afford their health care, and the government will be better able to take care of the rest. Unfortunately, the majority in Congress has committed us to a path which will make the right reforms much harder to achieve.

Despite the fact that I will vote against both bills, I do want to express my support for provisions in H.R. 4872 that make changes to the federal student loan program. This bill eliminates the Federal Family Education Loan (FFEL) Program and moves the origination of all federal student loans to the Direct Loan Program. For over two decades I have championed the Direct Loan Program as the most efficient, stable, and cost effective federal student loan program. The change to 100 percent direct lending marks an important step forward for students, parents, and taxpayers.

Currently we have two federal student loan programs that provide the exact same student loans to borrowers, and schools choose to participate in either one or the other. The FFEL Program uses private capital to fund student loans but receives a federal subsidy to ensure a guaranteed rate of return. The federal government also provides a guarantee on these loans. Thus, if a student defaults, taxpayers are on the hook, not the private lender. The Direct Loan Program uses the proceeds from the wholesale auction of Treasury securities to the private sector to fund loans to students, and all servicing and bill collection is handled by private companies

operating through performance-based contracts. The loans are delivered to students through the same system that universities use to disburse Pell Grants.

I first became interested in student loan reform in the early 1980s when the head of the Wisconsin higher education agency convinced me that the FFEL program was wildly costly to the government. I introduced the first direct loan proposal in 1983 and almost ten years later won approval of a pilot program to test the direct loan program at hundreds of schools nationwide, including Marquette University in my state of Wisconsin. A year later, I successfully worked with President Clinton to authorize the Direct Loan Program.

Over the years, there has been unanimous agreement about the excessive costs of the FFEL program compared to the Direct Loan Program when studied by the Congressional Budget Office (CBO), the U.S. Government Accountability Office (GAO), and the Office of Management and Budget (OMB) and the Treasury Department under both Presidents Clinton and Bush. Most recently, the Congressional Budget Office reported that a switch to all direct lending would save taxpayers $61 billion over ten years.

Besides being more expensive for the taxpayers, the FFEL program has also been plagued by fraud and abuse which further illustrates the drawbacks of this program for students and taxpayers. For instance, last Congress it was found that from 2001 to 2006 nonprofit lenders illegally claimed, according to one estimate, over $1 billion in improper taxpayers subsidies by knowingly manipulating a loophole in the law. And then there was the ``pay for play'' scandal in which it was revealed that colleges and administrators received special favors, benefits and kickbacks from lenders in exchange for steering students to their loans.

The FFEL program has also been proven to be unreliable. In 2008, because of the turmoil in the credit markets, Congress passed emergency legislation to temporarily allow lenders access to Treasury funds so they could continue to make loans. Between the Direct Loan Program and an emergency program, the federal government now funds $8.80 of every $10 in federal student lending activity. Over the past year, hundreds of schools have switched to the Direct Loan Program. They report smooth and easy transitions to the program and satisfaction with the service. In fact, according to Student Lending Analytics, only two percent of schools surveyed indicated they had not taken the steps necessary to originate direct loans.

By moving to 100 percent direct lending we are not favoring government over the private markets, there is no ``takeover'' here. Eliminating guaranteed loans in favor of direct loans means replacing a wasteful program with one that is more cost effective and in the interests of students and taxpayers. So, while I must vote against this bill due to the ill-conceived health care provisions, I strongly support the switch to 100 percent direct lending.

Mr. HASTINGS of Florida. Mr. Speaker, we are on the brink of passing a bill that will lay the foundation for comprehensive health care reform. We have discussed and debated various aspects of this bill for over a year. Now, it is time to act.

Developing and executing major reform efforts has never been easy or pretty. Violent and divisive debates waged when Congress was considering legislation that instituted Medicare.

And yet, few would dispute that this program is essential to delivering quality health care to some of our Nation's most vulnerable communities--the elderly and disabled.

Like reform efforts of the past, the health care reform bill has been met with blind criticisms and incessant fear mongering. Amazingly, some of my colleagues talk about horrific scenarios that will result from passing the bill and ignore the horrific conditions that people are enduring right now. They don't speak for me. They don't speak for the 161,000 uninsured Floridians in my district, and they don't speak for people who know that this bill is fiscally responsible and takes a multifaceted approach to improving our health care system.

Every single day, people are forced to choose between paying their mortgage or financing costly life-saving treatments. Every single day, seniors are forced to choose between buying food or buying their medication. Every single day, people are dying prematurely because they don't have regular access to health care services. You can't tell me that these people don't want or need health care reform.

Mr. Speaker, health care reform boils down to whether you believe that 47 million uninsured Americans is an unfortunate but acceptable fact, or an injustice that must be addressed.

Achieving comprehensive health care reform requires a uniquely American approach that preserves what works and introduces new elements that will allow us to meet 21st century needs and goals. This reform bill does just that. I urge my colleagues to vote in support of this historic bill and ensure that our fellow Americans have access to affordable and high quality health care.


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