[Congressional Record Volume 141, Number 142 (Wednesday, September 13, 1995)]
[House]
[Pages H8891-H8892]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ON ACHIEVING A BALANCED BUDGET
The SPEAKER pro tempore. Under a previous order of the House, the
gentleman from Pennsylvania [Mr. Goodling] is recognized for 5 minutes.
Mr. GOODLING. Mr. Speaker, I rise today with some sense of sadness,
and probably quite a bit of outrage. The administration, in its zeal to
protect the President's direct student loan program and hide their
failure to really do anything about balancing the budget, has been
using scare tactics to frighten and mislead the American people in
order to, I suppose, to strap them from the need to balance the budget.
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To do this, the administration has pulled out all stops. It has used
Presidential public relation mechanisms at the taxpayers' expense to
spread misinformation about our plans to balance the budget in 7 years.
Even the President has gone on the road with many of these
misinterpretations of what it is we plan to do to balance the budget.
So in an effort to set the record straight, I have sent a letter to the
President asking that he publicly apologize to the America people for
his scare tactics, and urging that he use all the methods at his
disposal to set the records straight and level with the America people
about what we are and are not going to do.
Mr. Speaker, I want to set the record straight at this time.
Republicans are preserving, I repeat, preserving the in-school interest
subsidy for undergraduate and graduate students, even though its
elimination was recommended by the President's Budget Director, Alice
Rivlin, in her suggestions as to how to balance the budget. We plan to
only touch the interest subsidy for the 6 month grace period following
graduation, and during that time no payments are made. The grace period
will remain intact. The borrower will repay the interest accrued during
that 6 month period, which will add about $4 a month to an average
monthly student loan.
Republicans, on the other hand, are asking the private lenders to
carry much of the burden for reforms in the loan program in order to
achieve a balanced budget in 7 years. In fact, reforms to the student
loan industry will save the taxpayers nearly $5 billion. We will
eliminate the President's direct student loan program in order to save
the American taxpayers more than $1.5 billion over 7 years, according
to the Congressional Budget Office, which was the group that the
President in his speech here on the floor told us we should be paying
attention to.
We will not increase, I repeat, not increase, the origination loan
fee paid by students, nor will we increase the interest rates on loans
for students. We do not take away the interest rate reductions students
are to receive for new loans effective July, 1988. We keep the
President's budget proposal on Perkins loans, a revolving fund that
perpetuates itself, adding no new funds, and therefore encouraging
lower default rates by tougher collection efforts. Pell grant awards
will be the largest in history in 1996 under our plan. The Supplemental
Education Opportunity Grant Program, the work study program, will be
funded at last year's level; no cuts.
We all know that the direct lending is a sacred cow to the
administration. However, we cannot cling to a gold-plated direct
student loan program and put welfare for the benefit of bureaucrats
ahead of the needs of students.
One of the most outrageous statements I heard was that if we do not
go the direct lending route, the Government will have to pick up 100
percent of the risk. Who in the world picks up 100 percent of the risk
when you do direct lending? We not only pick up 100 percent of the
risk, but we also have to borrow the money up front. We do not
guarantee the loan, we borrow the money up front. We pay interest on
the money we borrow so we increase what it is the American taxpayer has
to do to carry that load.
We keep the President's budget proposal, as I said, on Perkins loans.
now, what is the administration so afraid of that it would resort to
these scare tactics? Well, again, I want to review
one more time what we do, so that the students out there and the
parents are not misled.
If the Congress fails to act now, by the year 2002 the national debt
will exceed $6.5 trillion. That is a fact.
Another fact: Unless growth rates and mandatory spending are slowed,
all Federal revenues will be consumed by a handful of programs.
Fact: Under the Republican budget resolution, the Federal budget will
be running a surplus of $6.4 billion in the year 2002.
Fact: According to the President's 1995 budget, unless we gain
control of spending, the lifetime tax rate for children born after 1993
will exceed 82 percent. The most important thing we can do for the
children of today is to balance the budget. If we do that, we can
reduce interest rates by 2 percent. That affects everyone. That affects
those who have student loans; that affects those who have a mortgage;
that affects those who are buying an automobile on time.
Fact: While balancing the budget, the maximum Pell grant award will
increase from $2,340 in 1995 to $2,444 in 1996. Even while balancing
the budget, annual student loan volume will increase from $24.5 billion
in 1995 to $36 billion in the year 2002, a 47-percent increase.
Fact: Even while balancing the budget, the average student loan
amount increases from $3,646 in 1995 to $4,300 in the year 2000.
Fact: In order to balance the budget, Congress does not eliminate the
in-school interest subsidy for college students.
[[Page H 8892]]
Fact: In order to balance the budget, Congress does not increase loan
origination fees.
Fact: In order to balance the budget, Congress does not cut college
work study.
Fact: In order to balance the budget, Congress does not cut
supplemental education opportunity grants.
Fact: In order to balance the budget, Congress does not cut the TRIO
program.
Fact: The President continues to claim that the direct student loan
program saves the taxpayers $5.2 billion, while lowering interest rates
and fees to students. But the Congressional Budget Office, who the
President said we should listen to, says that the direct student loan
program costs taxpayers over $1.5 billion, adding to the Niagara-size
leak in Federal spending.
Mr. Speaker, I did not pick this fight on direct lending. I was here
to cooperate, as we generally do on education issues. No one from the
White House has ever contacted me in relationship to direct lending.
What we said in direct lending was we would do a pilot program, and we
would do a pilot program to see at the end of perhaps 7 years what is
the best approach to the student loan program.
All of a sudden, the budget comes up from the White House, 2-year
budget, direct lending, 100 percent in 2 years. We will not find out
for 7 years whether anybody had the ability to collect. Oh, it is easy.
Certainly certain universities and colleges love this business. All
they have to do is give out the money. Who collects it? The Department
of Education? I would be surprised if that would be successful.
But we are willing to do the pilot program. We did not change the
rules. We did not change the direction we were going.
Fact: The Federal deficit results in up to a 2-percent higher
interest rate for all Americans, including students.
Mr. Speaker, I want to get the facts straight so that the American
people will not be frightened by scare tactics.
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