Reverse Mortgages to Help America's Seniors Act

Mr. President, it is an honor to join the chairman of the HELP Committee, Senator Enzi, in introducing a bill to bring much needed support and relief to students, educators, and schools affected by Hurricane Katrina. The assistance cannot come too soon.

I want to thank the chairman and his staff for all their hard work and for working together with us to deliver this relief as quickly as possible.

We are all familiar with the devastation that hurricanes can cause to communities. In the past, some of the most destructive storms temporarily closed schools in those communities. Yet those closures were fairly limited and brief. In the aftermath of Hurricane Andrew in 1992, the Army, Navy, and National Guard joined in helping to repair classrooms and reopen school doors in about 3 weeks. Last year, Florida schools damaged by Hurricane Charley reopened within a month, and students were quickly back on track in their classrooms.

But Hurricane Katrina became a different type of devastation, and the magnitude of its damage is vastly more extensive.

More than 700 schools and 30 colleges and universities have been damaged and destroyed. Almost all of them have been closed at least temporarily. Many of them will not open until January at the earliest. Some are in danger of not reopening at all.

The number of students affected is staggering. The estimated total population of displaced elementary and secondary students is 373,000. Over 100,000 college students have been affected by the disaster, and 18,500 Head Start or Early Head Start children have been affected.

These are not just statistics. From this disaster we have been reminded that we are all part of the American family. And we have a responsibility to help members of that family when they are in need.

Fortunately, America has begun to respond.

School districts across the country have pledged to accommodate displaced students in their schools. Colleges and universities are graciously opening their doors to such students. The Nation is grateful to the school principals and superintendents, and the college presidents and deans who have pledged their help.

But they need help as they struggle to accommodate these students. Congress must do our part to respond, to help these devastated communities get back on their feet and enable students to return to school. We need a response that is as caring and as generous as the American spirit.

Congress has a responsibility to do all it can to support the needs of students, educators, and schools. We need to direct efforts to all stages of education--from early childhood through college. Let's make sure that these elementary and secondary children don't lose a year of education and that these college students can pursue their postsecondary degrees. We need to act quickly to provide the support needed to cope with and overcome this tragedy and rebuild the future.

This bill begins the process by strengthening support for educational institutions affected by Hurricane Katrina. It addresses the needs of early education, elementary and secondary education, higher education, and students with disabilities.

Thousands of young children affected by Katrina need temporary space in safe and healthy settings. We must provide them with quality early childhood programs and facilities, until the children and their families can return to their homes and communities.

The bill facilitates enrollment in Head Start and Early Head Start by waiving income eligibility and other requirements, so that families affected by Katrina will be able to enroll their children more easily. It authorizes funds for affected Head Start centers--providing additional guidance, technical assistance, and resources.

We must do more to provide for elementary and high schools struggling to cope with the harsh reality of the aftermath of Hurricane Katrina. Because of closures and the inability to obtain and maintain records, we need to temporarily postpone reporting requirements at affected schools. We must also provide them with financial support while they are closed to ensure they have the financial stability to reopen.

The bill authorizes the Secretary of Education to waive reporting requirements, assessments, and school improvement and corrective action for states, local educational agencies, and schools affected by Hurricane Katrina.

It directs schools in the declared disaster area to use child count numbers collected during the 2004-2005 academic year in seeking Federal funds for the 2006-2007 school year. The Secretary is authorized to award special school reopening grants to districts and communities significantly affected by Hurricane Katrina. These grants will aid in the effort to retain highly qualified teachers, recover data, establish temporary facilities, and take other related steps necessary to reopen the schools. It also provides funds for afterschool services and supplemental educational services to states affected by Hurricane Katrina.

In addition, we need to acknowledge the efforts of school districts in Texas, Georgia, Florida, and other States that offer schooling to displaced students. School districts in those States deserve funds to help ease the transition of students into new schools, support basic instruction, and purchase books and materials. We need to help these schools temporarily expand their facilities to avoid overcrowding.

The bill authorizes the Secretary of Education to make payments to local educational agencies that enroll displaced students. To alleviate the demand for qualified teachers, the Secretary is authorized to encourage States to extend temporary reciprocity for certification of school personnel across State lines. Teachers certified as highly qualified in one State will be recognized as meeting this standard in other States as well. The bill also modifies title II of the Higher Education Act to target teacher recruitment and retention efforts to the changing needs of the area.

We must also help college students find temporary relief so they don't lose a semester or a year of college, and give them the financial assistance they need to continue.

Students unable to attend a college because of the disaster will be exempted from returning grant aid under title IV of the Higher Education Act. These students will be able to place outstanding loans in deferment for the remainder of the 2005-2006 academic year. Additionally, financial aid administrators will be encouraged to use greater flexibility in professional judgment in evaluating the needs of college students affected by Hurricane Katrina.

We must also consider the needs of borrowers. College graduates residing in the declared disaster area who lose their jobs deserve temporary relief on their loan repayments. The bill provides a deferment until June, 2006, during which borrowers will not need to pay down the principal on their student loans.

To ease the burdens faced by colleges and universities in the declared disaster area, the Secretary is authorized to waive various Federal reporting requirements for colleges and universities. Schools will have up to 5 years to return unallocated Pell grants and supplemental educational opportunity grants. If needed, the Secretary will be able to work with schools after the deadline to arrange a repayment schedule. The bill offers colleges a flexible timeline for crediting undisbursed student loans. Schools have until the end of the academic year or June 30, 2006, to return such funds.

To assist colleges in enrolling displaced students, the Secretary is authorized to make arrangements to transfer Federal work-study funds from affected institutions to receiving institutions.

Finally, we must not neglect the needs of children with disabilities, teachers, and schools providing special education. Hurricane Katrina has thrown many children and families into a situation of having lost or having no records to document their child's special education experience. In addition, many children who were previously not students under IDEA may very well become students under IDEA. The bill requires schools to provide early intervening services to all children who need academic or mental health support to benefit from school. This will allow the time for children to sort out an individual needs to be identified. The bill also permits States and local education agencies to use data from either the 2005 or 2004 fiscal years for reporting and funding purposes to accommodate enrollment fluctuations and guarantee funding for teachers and schools to remain stable.

States will also be able to guarantee continuing special education services to students who do not relocate to another State. States, under the Development Disabilities Act, will have the flexibility to use funds to replace assistive technology and durable medical equipment for individuals with disabilities, and under the Vocational Rehabilitation Act will have the flexibility to develop apprenticeship programs to educate people with disabilities to be part of reconstruction efforts.

In the weeks and months ahead, we must also focus on rebuilding and reconstructing the schools devastated by the tragedy so that, as soon as possible, children can return to schools fully stocked with the resources they need. We must also consider strategies to encourage students and educators to return to their schools.

Last week, Senator Enzi and I heard moving testimony in the HELP Committee from Dr. Diane Roussel, superintendent of schools in Jefferson Parish in Louisiana. The parish lies south of New Orleans and was in the direct path of Katrina, and the district's schools, students, and teachers were all severely affected by the disaster.

In her closing remarks, Dr. Roussel emphasized the importance, necessity, and urgency of reopening the schools in her district. When schools reopen, she said, people return. When schools reopen, business returns, and life begins to return to normal.

In the coming days and weeks, we must work to help life return to normal again for the hundreds of thousands of lives affected by Hurricane Katrina. This education bill is an impressive first step. I urge Congress to continue the work we begin today to meet the needs of the entire Gulf Coast community to reopen its schools.

Mr. President, I rise to bring the Senate's attention to a bill I introduced today, the Long-Term Care Act of 2005.

Baby boomers will begin to turn 65 years old in 2010 and by 2030, all 77 million baby boomers will have reached retirement age and the over 65 population will have doubled. The practicality of these conditions will require the Federal Government and most State governments to spend more money on health care. Presently, Federal and State Governments are spending billions of dollars to ensure the health and well-being of our fellow citizens.

In one sector of the health care arena where costs are dramatically rising is in the area of long-term care. In 2000, spending on long-term care was estimated at $123.1 billion and it is expected to triple to $346.1 billion by 2040. Currently, 70 percent of long-term care costs are spent on nursing home care. The average cost of nursing home care is $178 per day or $60,000 per year. That is a significant burden on Federal and State Governments as well as the thousands of individuals who pay for that care out of pocket.

In addition, almost 75 percent of nursing home care is publicly funded. Medicaid spends about 58.7 percent on long-term care while Medicare spends 14.7 percent. According to the Council for Affordable Health Insurance, by the year 2030, Medicaid's nursing home expenditures are expected to reach $130 billion a year.

If more people purchased private long-term care insurance, we could reduce Medicaid's future institutional-care expenses by more than $40 billion each year, while giving those who are insured alternatives to nursing homes, including home care, adult daycare, foster care and assisted living. Congress has taken steps to give individuals more power to pay for their health care services such as long-term care. One such outstanding measure was the creation of Health Savings Accounts, HSAs.

I was pleased to support the passage of the Medicare Modernization Act. This landmark legislation created health savings accounts, which are a new way that people can pay for unreimbursed medical expenses such as deductibles, copayments, and services not covered by insurance like long-term care. Eligible individuals can establish and fund these accounts when they have a qualifying high deductible health plan and no other health plan, with some exceptions. The beauty of these plans is that they have tax advantages such as deductible contributions; tax- exempt withdrawals if the individual uses the money for medical expenses; and tax-exempt account earnings.

I am confident that with the creation of health savings accounts, individuals and families will be encouraged to set money aside for their health care expenses and give individuals the means to pay for health care services of their own choosing, without being constrained by insurers or employers. Unfortunately, health savings accounts are relatively new and most individuals will not have the built up funds in their HSA to pay for a number of costly health care expenses such as long-term care insurance and that is why we need to provide other options to help pay for this important investment.

Currently, thousands of Virginians and millions of Americans are saving in their retirement plans to have a comfortable life once they become seniors, be it 401(k) and 403(b) accounts.

These savings plans help prepare individuals for their future retirement or any unforeseen circumstance that may arise. Indeed, over 47 million Americans have 401(k) accounts with $1.8 trillion saved. In addition, 6.4 million Americans have 403(b) accounts, amounting to over $590 billion saved.

These are untapped funds that individuals should be allowed to use to help pay for their future health care needs. Current tax law and some retirement plans allow individuals, in extreme circumstances, to withdraw funds from their retirement accounts, but more often than not, a 10 percent excise tax applies for early withdrawal. In my opinion, that tax precludes the ability or desirability of individuals to provide for their and their families well-being and that is why I have introduced legislation to provide a new health care option to help address this unfortunate circumstance.

My legislation, the Long-Term Care Act, will allow individuals to use their 401(k) and 403(b) plans to purchase long-term care insurance with pretax dollars at any age and without early withdrawal penalty. Under the Long-Term Care Act, the consumer has the option to purchase long- term care insurance at the most appropriate amounts for their own needs and their spouses.

Today, only 6 percent of Americans own a long-term care policy. One of the reasons behind this dismally low figure is that individuals wait too long to purchase long-term care insurance. In fact, purchasing long-term care insurance at age 65 is about twice as expensive as purchasing it age 55. That is why we must encourage individuals to plan for their future health care needs and purchase long-term care insurance at an early age. By purchasing long-term care insurance at a younger age, individuals will be saving money in the long run and not depleting their life savings.

Our country is heading towards a demographic meltdown on long-term care costs. It is simply unsustainable for individuals and the government to maintain the current rate of spending without further endangering the state of health care in the United States.

Preparing for future costs of health care is something that every American should be doing. Long-term care insurance is one way for Americans to plan for periods of extended disability without burdening their families, going bankrupt, or relying on government assistance.

Every American should be preparing for future health care costs and it is important that we encourage people to take responsibility today for those costs, be it with the purchase of long-term care insurance or investment in a health savings account. If Virginians and Americans fail to act, it will result in an increased and unsustainable financial burden on the Federal Government and taxpayers.

My legislation, the Long-Term Care Act, is a commonsense approach that will encourage individuals to plan for their future health care needs and help make long-term care insurance more affordable. While this may not be the solution for some people, it is another option for the millions of Virginians and Americans to help provide for their health and well-being or the health and well-being of loved ones. I look forward to the Senate's action on this legislation because it not only encourages Americans to plan for their future health needs but will also help sustain the viability of our Nation's health care system. I thank you for your time and I yield the floor.

Mr. President, I rise today to introduce a bill to remove the current cap on the number of reverse mortgages that can be insured by the Federal Housing Administration (FHA). This legislation will ensure that eligible seniors have access to this important tool that allows them to continue to meet their expenses at a time when they have a reduced income. I am very pleased to be joined in this effort by Senator Crapo, who is an original cosponsor of this legislation.

I represent a State with the second largest senior population in the United States. Many of these seniors have worked hard throughout their years and own their own homes. Many of them are also at a time in their lives when they are having trouble making ends meet. Reverse mortgages allow senior homeowners to convert part of their home equity into tax- free income. The homeowner receives payments from the lender rather than making monthly payments as with a regular mortgage. The homeowner may receive the money in one lump sum, fixed monthly payments, a line of credit, or a combination of these. These funds can be used by seniors to pay for expenses, while allowing them to stay in their own homes as long as possible. A reverse mortgage helps make services like home healthcare, adult daycare and assisted living a possibility for more American seniors. It can also be used to pay for needed home repairs and other living expenses.

Unfortunately, there is currently a statutory limitation on the number of FHA-insured reverse mortgages that can be issued. This cap has already been increased as the aggregate number of FHA-insured reverse mortgages came close to reaching the cap. Unless it is removed completely, many seniors may be denied the use of this program, which can help to make their later years more stable and comfortable. For this reason, I am pleased to introduce this legislation to permanently remove the current cap.

I am also pleased to be working on this proposal with my colleague from Pennsylvania, Representative Michael Fitzpatrick, who has introduced this legislation in the House. I am very hopeful that the 109th Congress will act to pass this important legislation.

I ask unanimous consent that the text of this legislation be printed in the Record.

Mr. President, I rise today to introduce a bill to remove the current cap on the number of reverse mortgages that can be insured by the Federal Housing Administration (FHA). This legislation will ensure that eligible seniors have access to this important tool that allows them to continue to meet their expenses at a time when they have a reduced income. I am very pleased to be joined in this effort by Senator Crapo, who is an original cosponsor of this legislation.

I represent a State with the second largest senior population in the United States. Many of these seniors have worked hard throughout their years and own their own homes. Many of them are also at a time in their lives when they are having trouble making ends meet. Reverse mortgages allow senior homeowners to convert part of their home equity into tax- free income. The homeowner receives payments from the lender rather than making monthly payments as with a regular mortgage. The homeowner may receive the money in one lump sum, fixed monthly payments, a line of credit, or a combination of these. These funds can be used by seniors to pay for expenses, while allowing them to stay in their own homes as long as possible. A reverse mortgage helps make services like home healthcare, adult daycare and assisted living a possibility for more American seniors. It can also be used to pay for needed home repairs and other living expenses.

Unfortunately, there is currently a statutory limitation on the number of FHA-insured reverse mortgages that can be issued. This cap has already been increased as the aggregate number of FHA-insured reverse mortgages came close to reaching the cap. Unless it is removed completely, many seniors may be denied the use of this program, which can help to make their later years more stable and comfortable. For this reason, I am pleased to introduce this legislation to permanently remove the current cap.

I am also pleased to be working on this proposal with my colleague from Pennsylvania, Representative Michael Fitzpatrick, who has introduced this legislation in the House. I am very hopeful that the 109th Congress will act to pass this important legislation.

I ask unanimous consent that the text of this legislation be printed in the Record.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.