[Congressional Record Volume 157, Number 43 (Tuesday, March 29, 2011)]
[Senate]
[Pages S1929-S1931]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
HEALTH CARE RALLY
Mr. SANDERS. Mr. President, on Saturday, March 26 several hundred
medical students from across the country came to our State Capital in
Montpelier, VT, to rally in support of Vermont going forward with a
Medicare for All Single Payer health care system.
These young people were absolutely clear in understanding that for
them to be the great physicians and nurses that they want to be, our
health care system must change. They believe, as I do, that health care
is a right and not a privilege and that a single payer program is the
most cost-effective way of achieving that goal. I am very pleased to
submit for the Record the statement of principle signed by these
medical school students.
I ask unanimous consent it be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
As medical students from around the country converge this
weekend on the steps of the State House to support Vermont's
movement toward a single-payer health system, we want to
contribute additional perspectives on our state's discussion
of Health Care Reform.
As the Vermont legislature considers Health Care Reform,
we, a group of UVM medical students who are invested in the
future of Vermont, believe that current and future health
care legislation should work toward the following goals:
1. Ensure that every Vermonter has health care coverage
through a sustainable system that maintains a desirable
environment in which to practice medicine.
2. Replace the current fee for service system that both
limits access to physicians and compromises the quality of
care given to patients.
3. Empower Vermont to retain and attract high quality
physicians to ensure adequate health care for future
Vermonters.
Our proposals to help meet these goals are:
1. Initiate a program that reduces the tuition of out-or-
state students to in-state levels in exchange for commitment
to practice in Vermont after training is complete.
2. Improve funding for the existing loan repayment program
through Vermont AHEC to encourage primary care providers to
practice in under-served areas of the state.
3. Address the current inequity in the ``provider tax''
such that out of state providers treating Vermont patients
contribute fairly to the Vermont Medicaid program.
4. Simplify the administrative burden upon the provider by
developing a system that has a single payer with best-
practice guidelines as opposed to the current fee-for-service
system.
By addressing these issues in upcoming legislation, we are
of the opinion that the quality of health care in Vermont
will improve. A sustainable system that addresses many of the
national problems with medicine will encourage a strong
physician population throughout the state, as well as secure
Vermont's future as the healthiest state in America.
As medical students who will inherit the reform currently
being debated in Montpelier, we are committed to help shape a
sustainable universal health care system. It is our great
hope that these changes will be enacted to enable us to
provide the best care possible to our future patients.
Larry Bodden, Calvin Kagan, Bud Vana, Ben Ware, John
Malcolm, JJ Galli, Vanessa Patten, Nick Koch, Uz Robison,
Pete Cooch, Rich Tan, Bianca Yoo, Prabu Selvam, Dave Reisman,
Adam Ackrman, Nazia Kabani, Stas Lazarev, Sara Staples,
Therese Ray, Kelly Cunningham, Hannah Foote, Laura Sturgill,
Megan Malgeri, Kati Anderson, Serena Chang, Caitlan Baran,
Leah Carr, Mariah Stump, Daniel Edberg, Franki Boulos,
Chelsea Harris, Vinnie Kan, Mairin Jerome, Jimmy Corbett-
Detig, Dan Liebowitz, Laura Caldwell, Damian Ray, Mei Lee
Frankish.
The University of Vermont does not endorse this
organization or their position in connection with this or any
other political campaign, policy position or election.
Ms. SNOWE. Mr. President, I wish to discuss an amendment entitled
``the Greater Accountability in the Treasury Small Business Lending
Fund Act of 2011.''
As ranking member of the Senate Small Business Committee, it is my
responsibility to ensure that small businesses have access to
affordable credit. In this regard, I have worked on a bipartisan basis
with Senator Landrieu, chair of the Small Business Committee, to
include provisions in the American Recovery and Reinvestment Act that
enhanced the SBA's 7(a) and 504 loan programs. Those measures resulted
in a 90-percent national increase in SBA lending at a crucial time in
our Nation's lending crisis. I also authored provisions, recently
enacted into law, to increase the SBA's maximum loan limits for its
microloan, 7(a), and 504 loans, to make the SBA more relevant to the
needs of today's borrowers. Additionally, I have been supportive of
efforts to increase the arbitrarily imposed cap on member business
lending at credit unions--at no cost to taxpayers--so that credit
unions can play
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a greater role in helping to address the problems that small businesses
continue to face in accessing credit.
But, unfortunately, I was unable to vote in favor of the Small
Business Jobs Act of 2010, even though it included many of my
priorities, due to my significant concerns with the Treasury Small
Business Lending Fund--SBLF or lending fund--provisions included into
that bill. I opposed the inclusion of the lending fund for several
reasons. While I will not reiterate all of those here, I will discuss a
few of them briefly.
First, the lending fund is essentially an extension of the Troubled
Assets Relief Program, TARP, which was terminated by the Dodd-Frank
Wall Street Reform and Consumer Protection Act. This fact was confirmed
by the bipartisan Congressional Oversight Panel for TARP in its May
Oversight Report.
Second, it is possible that instead of promoting quality loans, the
lending fund could encourage unnecessarily risky behavior by banks.
Under the current law, the Treasury Department lends funds to banks at
a 5-percent interest rate, which can be reduced to as low as 1 percent
if the institutions in turn increase their small business lending. If
the banks fail to increase their small business lending, the interest
rate they pay could rise to a more punitive 7 percent. This could lead
to an untenable situation where banks would make risky loans to avoid
paying higher interest rates--a behavior known as ``moral hazard.''
Third, I still believe that the lending fund could put taxpayer
resources at risk. The score for the Small Business Lending Fund is
convoluted. The Congressional Budget Office, CBO, score for the lending
fund listed it as raising $1.1 billion over 10 years, based on a cash-
based estimate. However, the very same CBO score highlighted that if
CBO were permitted to base its score on a fair-value estimate, which
accounts for market risk, the score would be a $6.2 billion loss. In
fact, the CBO score stated:
Estimates prepared on a ``fair-value'' basis include the
cost of the risk that the government has assumed; as a
result, they provide a more comprehensive measure of the cost
of the financial commitments than estimates done on a FCRA
[Federal Credit Reform Act of 1990 (FCRA)] basis or on a cash
basis. CBO estimates that the cost of the SBLF on such a
fair-value basis (that is, reflecting market risk) would be
$6.2 billion.
While I favor outright repeal of the Small Business Lending Fund, I
know that will be very difficult--and likely impossible, given that the
majority party in the Senate and the President strongly supported its
enactment. And so I am focusing my efforts on making as many
improvements to the fund as possible, a responsibility that all of us
in Congress, Republicans and Democrats alike, should be able to
coalesce around.
We undoubtedly have a shared responsibility to ensure that taxpayer's
dollars, in this case $30 billion for the Small Business Lending Fund,
are used in a transparent, prudent, and responsible manner. If we
foster an environment in which banks are free to make risky loans to
avoid higher interest rates, if we permit banks to accept loans without
any formal guarantee of repayment, we fail our responsibility to our
constituents and do a disservice to our Nation's 30 million small
businesses.
The following is a description of some of the amendment's provisions.
One section would require that banks that receive Small Business
Lending Fund distributions, must--within 10 years--repay the money they
receive. While the current law directs that within 10 years of
receiving the funds, the banks should repay them to the Treasury
Department, it also gives discretion to the Treasury Secretary to
extend--even indefinitely--the period of time that banks have, to repay
the government. Again, this is a commonsense provision to ensure that
taxpayer's dollars do not go to waste.
Another provision would establish a sunset of 15 years for the Small
Business Lending Fund. Under the current law, no such end date exists.
The Lending Fund must not be authorized to continue in perpetuity.
The amendment would also prohibit, moving forward, banks that have
received TARP distributions from also obtaining small business lending
funds. Under the current law, banks that have received money through
the TARP program remain eligible to receive small business lending
funds as well, unless they default on TARP repayment. My provision is
not inferring that banks who received TARP funds are bad actors, or
that they are being penalized for participating in the program. Rather,
it is a simple recognition that the Federal government should be
limiting the frequency with which it subsidizes private banks with
taxpayer funds at favorable interest rates. This crucial amendment will
prohibit banks from ``double dipping'' into taxpayer funds.
Another provision would provide that the Small Business Lending Fund
cease operations if the Federal Deposit Insurance Corporation is
appointed receiver of 5 percent or more of any eligible institutions.
It is essential that the lending fund is not a bailout and if there are
strong indications that this fund has serious systemic difficulties, it
must be halted until the problems within the program are corrected.
Another provision would provide that only healthy banks participate
in the Small Business Lending Fund. This amendment prevents banks who
apply for the SBLF from counting expected SBLF funds as tier 1 capital
in order to artificially strengthen their capital position in order to
receive government funds. This provision ensures that banks would have
to stand on their own two feet, rather than being able to count the
anticipated future receipts of taxpayer funds, when determining if the
banks are healthy enough to be provided those funds in the first place.
My amendment would also help ensure that regulators have more
meaningful controls over the Small Business Lending Fund. For there to
be meaningful controls over the SBLF, it is essential that all bank
regulators, whether State or Federal, have a real voice in the lending
fund's ability to lend to regulated banks. This amendment gives State
bank regulators the ability to determine whether or not a bank which
they regulate should receive capital investment through the SBLF
program. The current lending fund only gives State bank regulators an
advisory role over whether or not a bank they regulate will receive
SBLF funds. As this fund is targeted towards community banks, most of
the banks applying for this program will be regulated at the State
level. If we are really going to include State regulators and make this
an inclusive regulator process, it is essential that State regulators
have the power to affect a bank's application.
And my amendment would also establish an appropriate benchmark for
assessing changes in small business lending by recipients of capital
investments under the Small Business Lending Fund. As it is currently
written, the SBLF uses 2008 as a benchmark year to determine how much
banks will have to increase their lending to small firms. My concern is
that 2008 was a true low mark for small business lending. This
benchmark shortchanges small businesses. Using 2007, or some other
measure, as a benchmark may increase the number of loans, banks
participating in the SBLF program would have to make to small firms.
This legislation is not a silver bullet, and I recognize that we
should continue to vet these issues further. But it does attempt to
deal with many of the significant problems that I have with the lending
fund. Regrettably, these are precisely the types of issues that could
have been resolved, had the lending fund received hearings and been
properly vetted in the Senate--as one would expect of any legislative
proposal of this magnitude.
I ask unanimous consent that a copy of the section by section of the
bill be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
The Greater Accountability in the Treasury Small Business Lending Fund
Act (``Act'')
*This Act revises the Department of Treasury (``Treasury'')
Small Business Lending Fund (``Lending Fund'') program
established in H.R. 5297, the Small Business Jobs Act of 2010
(``Jobs Act'').
SEC. 1. SHORT TITLE.
This legislation shall be referred to as ``the Greater
Accountability in the Lending Fund Act of 2011.''
SEC. 2. REPAYMENT REQUIREMENT.
This section requires that financial institutions that
receive Lending Fund distributions must--within 10 years--
repay the
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money that they receive. Under current law, the Secretary of
Treasury (``Secretary'') has the authority to postpone,
indefinitely, repayment.
SEC. 3. SUNSET ON THE LENDING FUND.
Under existing law, the Lending Fund is authorized to exist
forever. This section requires that the Lending Fund sunset
within 15 years of the date that the Lending Fund was
enacted.
SEC. 4. TRIGGER TO PROTECT AND PRESERVE TAXPAYER DOLLARS.
This section prohibits the Secretary from making any new
purchases (i.e. prohibits the Secretary from providing
additional money, through the Lending Fund) if the Federal
Deposit Insurance Corporation is appointed receiver of 5
percent or more of the number of eligible financial
institutions that have obtained a capital investment under
the Lending Fund program.
SEC. 5. DISALLOWING FUTURE LENDING FUND PURCHASES OF
FINANCIAL INSTITUTIONS THAT PARTICIPATED IN THE
TROUBLED ASSET RELIEF PROGRAM (``TARP'').
This section prohibits--as of the date of this Act being
enacted--the Secretary from making additional purchases,
through the Lending Fund, of a financial institution (i.e.
providing money to a bank) that participated in the TARP
program. This section would end the double-dipping practice
of financial institutions that have previously received
taxpayer funds, at low (subsidized) interest rates, through
TARP, doing so again, through the Lending Fund.
SEC. 6. ALLOWING ONLY ``HEALTHY'' FINANCIAL INSTITUTIONS TO
PARTICIPATE IN THE LENDING FUND.
Under current law, when determining whether a bank is
financially sound, for the purpose of receiving Lending Fund
dollars, the Secretary can take into consideration what the
bank's strength would be after receiving the funds. This
section changes the law to require that the Secretary
determine whether a bank is financially stable, without being
able to include future Lending Fund distributions into the
equation. Therefore, a bank must be stable on its own,
(without regard to future Lending Fund dollars), in order to
be approved to participate in the program.
SEC. 7. ENSURING THAT REGULATORS HAVE MORE MEANINGFUL
CONTROLS OVER THE LENDING FUND.
This section requires that the Secretary must obtain
prudential regulators' approval--rather than consultation--
before an individual applicant financial institution can
receive distributions through the Lending Fund program.
SEC. 8. BENCHMARK ADJUSTMENT.
This section changes the benchmark by which a financial
institution's small business lending has increased from the
current level (the 4 full quarters immediately preceding the
date of the Jobs Act being enacted) to a new benchmark of
calendar year 2007. This section addresses concerns that the
Lending Fund may reward banks that would have increased their
lending even in the absence of government support, as the
Fund's incentive structure is calculated in reference to
lending levels, which were low by historical standards.
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