Floor Statements

Mr. President, today I am introducing, along with Senator Blumenthal, the Stop Subsidizing Multimillion Dollar Corporate Bonuses Act. This bill closes a loophole that allows publicly traded corporations to deduct an executive's pay over $1 million from their tax bill.

Under current tax law, when a public corporation calculates its taxable income, generally it is permitted to deduct the cost of compensation from its revenues, with limits up to $1 million for some of the firm's most senior executives. However, a loophole has allowed many public corporations to avoid such limits and freely deduct excessive executive compensation. For example, because of this loophole, if a CEO receives $15 million in compensation in a given year, that amount can cause the corporation's taxable income to decline by $15 million. With the current corporate tax rate at 35 percent, the corporation in this case would pay less tax to the U.S. Treasury, up to 35 percent of $15 million, leaving the corporation's shareholders to bear only $9.75 million of the $15 million cost of executive pay, while U.S. taxpayers foot the remaining $5.25 million.

The Stop Subsidizing Multimillion Dollar Corporate Bonuses Act would allow a public corporation to deduct compensation up to only $1 million. Using the same example, this would mean that corporate shareholders would bear $14.65 million of the $15 million in compensation.

Over a ten-year window, the Joint Committee on Taxation has estimated this legislation would close a loophole that costs U.S. taxpayers over $50 billion by making some simple changes to existing law.

First, our legislation extends section 162(m) of the tax code to all employees of publicly traded corporations so that all compensation is subject to a deductibility cap of $1 million. Publicly traded corporations would still be permitted to pay their executives as much as they want, but compensation above and beyond $1 million would no longer be bankrolled, in part, through our tax code.

Second, our bill removes the exemption for performance-based compensation, which currently permits compensation deductions above and beyond $1 million when executives have met performance benchmarks set by the corporation's Board of Directors. As a result, publicly traded corporations would still be able to incentivize their executives, but all such incentives would be subject to a corporate deductibility cap of $1 million.

Finally, our legislation makes a technical correction to ensure that all publicly traded corporations that are required to provide quarterly and annual reports to their investors under Securities and Exchange Commission rules and regulations are subject to section 162(m). Currently, this section of the tax code only covers some publicly traded corporations who are required to provide these periodic reports to their shareholders. Discouraging unrestrained compensation packages shouldn't hinge on whether a publicly traded corporation falls into one SEC reporting requirement or another, and my bill closes this technical loophole.

With this legislation, we aim to put an end to some of the extravagant tax breaks that exclusively benefit public corporations. This is simply a matter of fairness at a time of fiscal belt tightening, when so many of our constituents have already sacrificed.

I want to thank Senator Blumenthal and his staff for working with me on this issue, and I urge our colleagues to

join us by cosponsoring this legislation.

Mr. President, today I am introducing, along with Senator Blumenthal, the Stop Subsidizing Multimillion Dollar Corporate Bonuses Act. This bill closes a loophole that allows publicly traded corporations to deduct an executive's pay over $1 million from their tax bill.

Under current tax law, when a public corporation calculates its taxable income, generally it is permitted to deduct the cost of compensation from its revenues, with limits up to $1 million for some of the firm's most senior executives. However, a loophole has allowed many public corporations to avoid such limits and freely deduct excessive executive compensation. For example, because of this loophole, if a CEO receives $15 million in compensation in a given year, that amount can cause the corporation's taxable income to decline by $15 million. With the current corporate tax rate at 35 percent, the corporation in this case would pay less tax to the U.S. Treasury, up to 35 percent of $15 million, leaving the corporation's shareholders to bear only $9.75 million of the $15 million cost of executive pay, while U.S. taxpayers foot the remaining $5.25 million.

The Stop Subsidizing Multimillion Dollar Corporate Bonuses Act would allow a public corporation to deduct compensation up to only $1 million. Using the same example, this would mean that corporate shareholders would bear $14.65 million of the $15 million in compensation.

Over a ten-year window, the Joint Committee on Taxation has estimated this legislation would close a loophole that costs U.S. taxpayers over $50 billion by making some simple changes to existing law.

First, our legislation extends section 162(m) of the tax code to all employees of publicly traded corporations so that all compensation is subject to a deductibility cap of $1 million. Publicly traded corporations would still be permitted to pay their executives as much as they want, but compensation above and beyond $1 million would no longer be bankrolled, in part, through our tax code.

Second, our bill removes the exemption for performance-based compensation, which currently permits compensation deductions above and beyond $1 million when executives have met performance benchmarks set by the corporation's Board of Directors. As a result, publicly traded corporations would still be able to incentivize their executives, but all such incentives would be subject to a corporate deductibility cap of $1 million.

Finally, our legislation makes a technical correction to ensure that all publicly traded corporations that are required to provide quarterly and annual reports to their investors under Securities and Exchange Commission rules and regulations are subject to section 162(m). Currently, this section of the tax code only covers some publicly traded corporations who are required to provide these periodic reports to their shareholders. Discouraging unrestrained compensation packages shouldn't hinge on whether a publicly traded corporation falls into one SEC reporting requirement or another, and my bill closes this technical loophole.

With this legislation, we aim to put an end to some of the extravagant tax breaks that exclusively benefit public corporations. This is simply a matter of fairness at a time of fiscal belt tightening, when so many of our constituents have already sacrificed.

I want to thank Senator Blumenthal and his staff for working with me on this issue, and I urge our colleagues to

join us by cosponsoring this legislation.

Mr. President, I am proud to be once again reintroducing the Housing Assistance for Veterans Act, HAVEN Act, with my colleague, Senator Johanns.

Last year, we joined forces to successfully pass this legislation as an amendment during the Senate's consideration of the National Defense Authorization Act, NDAA. Unfortunately, due to concerns by some on the Veterans' Affairs Committee, it was not included in the final version of the NDAA. Those concerns have been addressed in this version of the HAVEN Act, and I would like to thank the Veterans' Affairs Committee for working cooperatively with us to strengthen the legislation.

Our veterans have made many personal sacrifices in service to our Nation, and we must honor our commitment to provide them with the care they have earned and deserve. One such way is to ensure that they have access to adequate housing.

According to Rebuilding Together, 5.5 million of our veterans are disabled, and one and a half million are at risk of homelessness. In my home State of Rhode Island, according to the U.S. Census Bureau, there are more than 19,000 veterans with disabilities, each of whom face their own unique challenges in terms of their housing needs.

The Department of Veterans Affairs, VA, has programs that assist veterans in adapting and improving their homes, but unfortunately, these programs do not extend assistance to all veterans with disabilities. It is clear we must do more, and with this legislation, we are seeking to serve all veterans with disabilities, regardless of the severity of the disability and whether the disability is service- connected.

The HAVEN Act will give veterans the opportunity to renovate and modify their existing homes by installing wheelchair ramps, widening doors, re-equipping rooms, and making necessary additions and adjustments to existing structures--all so that these homes are safer and more suitable for our veterans.

Our legislation encourages key stakeholders, such as the Department of Housing and Urban Development, the VA, housing non-profits, and veterans service organizations, to work together to serve our veterans. In order to extend the reach of this Federal funding, grant recipients would be expected to either match Federal funding or make in-kind contributions, through encouraging volunteers to help make repairs or engaging businesses to donate needed supplies.

This bill is supported by the American Legion, Veterans of Foreign Wars, Vietnam Veterans of America, Paralyzed Veterans of America, VetsFirst, a program of United Spinal Association, Iraq and Afghanistan Veterans of America, Habitat for Humanity, and Rebuilding Together. I thank Senator Johanns for working with me on this important bill, and I look forward to working with him and the rest of our colleagues to pass this legislation.

Mr. President, our economy will not work for individuals or for our nation unless we create and support avenues for adults to continue their education and build their skills. These are longstanding issues that I

have worked on for many years, including the last attempt to reauthorize the Workforce Investment Act. I was pleased to work with Senator Webb in the 112th Congress on the Adult Education and Economic Growth Act, and I am proud to reintroduce it today with Senator Brown. I thank Congressman Ruben Hinojosa for introducing the companion legislation in the House of Representatives.

The Adult Education and Economic Growth Act increases the investment in adult education programs; ensures better coordination among adult education programs, workforce development programs, and higher education; strengthens professional development for adult education providers; expands the use of technology in adult education programs; and provides incentives for employers to support their workers who need adult education services.

In Rhode Island, roughly 41 percent of working age adults have a college degree. By 2018, it is estimated that 61 percent of Rhode Island jobs will require some postsecondary education. We have an estimated 91,000 individuals without a high school diploma--the basic ticket to accessing postsecondary education and training.

Nationally, the numbers make a similar case for the need to invest in adult education. According to the National Commission on Adult Literacy, 80 to 90 million U.S. adults today, about half of the adult workforce, do not have the basic education and communication skills required to obtain jobs that pay a family-sustaining wage. These individuals continue to struggle in the recovering economy, with unemployment rates above 10 percent for individuals who do not have a high school diploma, compared to 7.6 percent for high school graduates and less than 4 percent for workers with bachelor's degrees.

Simply put, we will not be able to close the skills gap without a robust investment in adult education. Unfortunately, we have not been making this kind of investment. Funding has been anemic, and as a result, services reach fewer than 3 million adults annually--a fraction of the need.

The Adult Education and Economic Growth will help turn around this dire situation by increasing the authorization for adult education programs authorized under Title II of the Workforce Investment Act to $850 million and establishing a new state technology grant for adult education to upgrade the delivery system and assist adults in attaining critical digital literacy skills. This legislation requires state and local workforce investment boards to address adult education in their plans for using funds authorized under Title I of the Workforce Investment Act, including incorporating adult education into career pathways programs and offering integrated education and training programs. It also strengthens programs and services for English learners, including authorizing the Integrated English Literacy and Civics Program, and for adults with disabilities. The legislation will also build the knowledge base on what works for adult learners through a National Center for Adult Education, Literacy, and Workplace Skills. Finally, the Adult Education and Economic Growth Act will provide employers with tax incentives to invest in developing the basic skills of their employees.

In sum, the Adult Education and Economic Growth Act offers a comprehensive approach to reaching the millions of adults who need basic skills, English literacy instruction, or a secondary school diploma so that they can embark on a career pathway that leads to economic stability and success. I am pleased to have worked with the National Commission on Adult Literacy in developing this legislation. I urge my colleagues to cosponsor this bill and work with me to include its provisions in the pending reauthorization of the Workforce Investment Act.

Mr. President, I am proud to be once again reintroducing the Housing Assistance for Veterans Act, HAVEN Act, with my colleague, Senator Johanns.

Last year, we joined forces to successfully pass this legislation as an amendment during the Senate's consideration of the National Defense Authorization Act, NDAA. Unfortunately, due to concerns by some on the Veterans' Affairs Committee, it was not included in the final version of the NDAA. Those concerns have been addressed in this version of the HAVEN Act, and I would like to thank the Veterans' Affairs Committee for working cooperatively with us to strengthen the legislation.

Our veterans have made many personal sacrifices in service to our Nation, and we must honor our commitment to provide them with the care they have earned and deserve. One such way is to ensure that they have access to adequate housing.

According to Rebuilding Together, 5.5 million of our veterans are disabled, and one and a half million are at risk of homelessness. In my home State of Rhode Island, according to the U.S. Census Bureau, there are more than 19,000 veterans with disabilities, each of whom face their own unique challenges in terms of their housing needs.

The Department of Veterans Affairs, VA, has programs that assist veterans in adapting and improving their homes, but unfortunately, these programs do not extend assistance to all veterans with disabilities. It is clear we must do more, and with this legislation, we are seeking to serve all veterans with disabilities, regardless of the severity of the disability and whether the disability is service- connected.

The HAVEN Act will give veterans the opportunity to renovate and modify their existing homes by installing wheelchair ramps, widening doors, re-equipping rooms, and making necessary additions and adjustments to existing structures--all so that these homes are safer and more suitable for our veterans.

Our legislation encourages key stakeholders, such as the Department of Housing and Urban Development, the VA, housing non-profits, and veterans service organizations, to work together to serve our veterans. In order to extend the reach of this Federal funding, grant recipients would be expected to either match Federal funding or make in-kind contributions, through encouraging volunteers to help make repairs or engaging businesses to donate needed supplies.

This bill is supported by the American Legion, Veterans of Foreign Wars, Vietnam Veterans of America, Paralyzed Veterans of America, VetsFirst, a program of United Spinal Association, Iraq and Afghanistan Veterans of America, Habitat for Humanity, and Rebuilding Together. I thank Senator Johanns for working with me on this important bill, and I look forward to working with him and the rest of our colleagues to pass this legislation.

Mr. President, our economy will not work for individuals or for our nation unless we create and support avenues for adults to continue their education and build their skills. These are longstanding issues that I

have worked on for many years, including the last attempt to reauthorize the Workforce Investment Act. I was pleased to work with Senator Webb in the 112th Congress on the Adult Education and Economic Growth Act, and I am proud to reintroduce it today with Senator Brown. I thank Congressman Ruben Hinojosa for introducing the companion legislation in the House of Representatives.

The Adult Education and Economic Growth Act increases the investment in adult education programs; ensures better coordination among adult education programs, workforce development programs, and higher education; strengthens professional development for adult education providers; expands the use of technology in adult education programs; and provides incentives for employers to support their workers who need adult education services.

In Rhode Island, roughly 41 percent of working age adults have a college degree. By 2018, it is estimated that 61 percent of Rhode Island jobs will require some postsecondary education. We have an estimated 91,000 individuals without a high school diploma--the basic ticket to accessing postsecondary education and training.

Nationally, the numbers make a similar case for the need to invest in adult education. According to the National Commission on Adult Literacy, 80 to 90 million U.S. adults today, about half of the adult workforce, do not have the basic education and communication skills required to obtain jobs that pay a family-sustaining wage. These individuals continue to struggle in the recovering economy, with unemployment rates above 10 percent for individuals who do not have a high school diploma, compared to 7.6 percent for high school graduates and less than 4 percent for workers with bachelor's degrees.

Simply put, we will not be able to close the skills gap without a robust investment in adult education. Unfortunately, we have not been making this kind of investment. Funding has been anemic, and as a result, services reach fewer than 3 million adults annually--a fraction of the need.

The Adult Education and Economic Growth will help turn around this dire situation by increasing the authorization for adult education programs authorized under Title II of the Workforce Investment Act to $850 million and establishing a new state technology grant for adult education to upgrade the delivery system and assist adults in attaining critical digital literacy skills. This legislation requires state and local workforce investment boards to address adult education in their plans for using funds authorized under Title I of the Workforce Investment Act, including incorporating adult education into career pathways programs and offering integrated education and training programs. It also strengthens programs and services for English learners, including authorizing the Integrated English Literacy and Civics Program, and for adults with disabilities. The legislation will also build the knowledge base on what works for adult learners through a National Center for Adult Education, Literacy, and Workplace Skills. Finally, the Adult Education and Economic Growth Act will provide employers with tax incentives to invest in developing the basic skills of their employees.

In sum, the Adult Education and Economic Growth Act offers a comprehensive approach to reaching the millions of adults who need basic skills, English literacy instruction, or a secondary school diploma so that they can embark on a career pathway that leads to economic stability and success. I am pleased to have worked with the National Commission on Adult Literacy in developing this legislation. I urge my colleagues to cosponsor this bill and work with me to include its provisions in the pending reauthorization of the Workforce Investment Act.

Madam President, I ask unanimous consent at this time that my amendment, which is at the desk, be called up.

I ask unanimous consent that the reading of the amendment be dispensed with.

Madam President, I am pleased to offer this amendment, along with Senator Warren and 18 of our colleagues. Our amendment would provide the kind of certainty students deserve and that they will not receive under the proposed bipartisan Student Loan Certainty Act as it is currently drafted.

Simply put, our amendment will ensure that students and parents will not be any worse off than they would be under the current fixed rates of 6.8 percent or 7.9 percent. To illustrate this, let me present a chart.

Under the underlying legislation, Stafford loans for students are essentially subject to the same interest rates, and they are depicted here. These are the undergraduate loans in yellow and the graduate loans in white. We can see in the first year for the undergraduate loans it is just under 4 percent, and that is less than the 6.8-percent current statutory limit. For the graduate loans, they are up roughly about 5\1/2\ percent, which, again, is below that. But very quickly, by 2015, the graduate loans exceed this 6.8-percent threshold. That is the current law. Then it keeps going up and up and up.

Actually, this chart does not represent the entire impact because the last bar represents the estimates not just for 1 year but for 5 years. So we can see these increments--the white increments for the graduate loans--keep going up and up and up indefinitely. This is permanent legislation. This is not a 5-year fix or a 10-year fix. It is permanent legislation. A similar process is that the undergraduate Stafford loans go up and up and up and up.

Our legislation will simply say if you want to provide an incentive and a benefit for students who are today going to school, that is commendable, but at some point we are going to have a much worse deal for students than we have just with the current law. So we are proposing, very simply, to cap at 6.8 percent the Stafford loans and then at 7.9 percent for the parent PLUS loans.

This is a projection of the percentage interest rates for parent loans. Again, 2013, it is below the present 7.9-percent statutory limit, but quickly, by 2015, it is above, and then it is indefinite. From 2018 to 2023 and beyond, it goes up and up and up and up. Our amendment simply says if we want to give everybody a benefit in the next several years of lower rates, do it, but let us give real certainty that rates will not exceed the current statutory rates.

As I have indicated previously in my remarks, I wish to commend the authors at least for putting in caps on rates.

Some of the original proposals coming from the Senate Republicans and other places had no real caps in place. At least now we have caps.

I want to particularly thank Chairman Harkin, because he committed himself to ensuring that all these loan programs have a cap. Our point, though, is the caps are so large that effectively students and parents in a very short period of time will be paying much more than they are today. These caps are too high. They could go as high as 8.25 percent for undergraduate Stafford loans, 9.5 percent for graduate Stafford loans, and 10.5 percent for PLUS loans. Those are significantly higher than our threshold. We can do better. We want to protect students from these high interest rates.

In Rhode Island, roughly 49,000 students will borrow for this coming academic year. They would benefit from this approach, but their brothers and sisters, who may be freshmen in high school, will be taking out loans when the interest rates will be exceeding the current rates.

Adopting the Reed-Warren amendment means students can benefit from these low rates initially, but then we will have the existing statutory cap in place for future generations. As it exists now, if you are a senior in high school and you are going to college next year, you are going to get the benefit of the rate, but your younger brother or sister, who may be a freshman or junior in high school, and your parents are paying for it in the future, and will be paying indefinitely.

As my colleague Senator Warren has pointed out, they are doing it in a situation in which the government is making billions of dollars a year on these loans. This is not a question of putting subsidies in. Contrary to the history and purpose of the student loan programs, we are actually reversing the subsidy. We are saying, No, the students pay.

Education is so important to the future of America, yet we are no longer going to invest in it as a Nation. We are going to let students pay. That is the way this whole approach has been structured. They picked as their benchmark the 10-year Treasury bill. Typically, we use the 91-day Treasury bill. Just in the baseline, there is a higher interest rate. Then they picked a premium to put on top to compensate the government for potential risk of loss. As some of my colleagues suggested, we are not quite sure what the premium should be, and we feel very strongly that premium is much too high for the actual risks and costs of the program. So this proposal has baked in higher interest rates for some students after the first 2 years, and for all students and parents in the long run.

I believe what we are doing in the Reed-Warren amendment makes a great deal of sense. Many people are struggling in many different ways, and particularly students are struggling with student debt. We should ensure that the new rate structure does not leave students worse off-- and not just for the first 2 years, but let's be realistic and serious. Let's look down the road. This road is taking us to higher and higher interest rates for students. I think we can do better. I think we must do better.

I would point out that we have paid for this amendment by putting a very small surcharge of 0.55 percent on incomes over $1 million, so this is fully paid for, and it will give students the real certainty that they will not see interest rates go beyond the present statutory limits.

I think what we should be doing as a Nation is not shifting the burden to students but investing through students in our future. We know if students are able to go on to college and to postgraduate education, they are going to make more money, they are going to contribute more to the economy, we are going to be more globally competitive, and we will be in a much better position.

Frankly, that was the wise judgment our parents and grandparents made when, in the 1950s, 1960s, and the 1970s, they decided to invest in the future of America by investing in higher education.

I daresay there are very few people in this Chamber who in one way or another did not directly benefit from that investment. But now we are saying today, No, it is on the students, they are going to pay market rate premiums, and, according to CBO numbers, we will be generating about $184 billion--the difference between our borrowing costs and what the students and families are paying. That is not the way to grow a strong, prosperous America.

Because there have been elaborate studies, we also understand that we have a jobs gap already between highly educated individuals and the jobs. By 2020, there will be about a 5-million-jobs gap between those jobs requiring higher education and the projected graduates in the next several years going forward.

So we have to do much more, and I think we also have to look at the issue in a comprehensive way. We have to build in incentives for lower costs at colleges and universities. That is not being done in this legislation, and I think once we pass it, the likelihood of getting on to that issue is diminished.

We also have to try to come up with ways in which students can refinance loans. A trillion dollars of student debt has surpassed credit card and automobile debt as the second biggest household debt in the country, and that is going to grow. It will particularly grow under the underlying proposal. We have to figure out a creative way to do that. And, by the way, that is going to cost money. So if one of the principles and premises of this whole legislation is we will spend no additional money for higher education support, how are we going to fix that issue of students and families who are deeply in debt--not just those who are carrying the debt today but those who are going to accumulate the debt going forward?

I urge my colleagues to vote yes on the Reed-Warren amendment. This will be the certainty that is proclaimed in the title of the underlying legislation.

Madam President, I yield the floor.

I ask unanimous consent at the conclusion of Senator Carper's remarks I be recognized to use the time allotted to me under the motion.

Mr. President, I recognize it is a much larger State. The nice thing about the Senate is that we all have two Senators.

There has been a great deal of work put together by so many people here: Senator Carper, Senator Manchin, Senator Alexander, Senator Harkin, Senator King, and Senator Burr. I could go on. They have been trying--in a principled way--to help students. They provided short-term help, but the major criticism I have of the legislation is that it locks us into the long-run, predictable rate increases and will add further to the burden that students and families are bearing to send their children, and themselves, to college and beyond.

Despite these great efforts, I just do not believe this approach, if unamended, is going to be the way we want to move forward.

Mark Kantrowitz is a well-known expert on student aid. His comments are particularly telling.

It's still going to be, effectively, an interest rate

increase masquerading as a decrease. Students currently

enrolled will benefit from the low interest rates, but as the

economy recovers and rates rise, today's high school students

could end up paying more than 6.8 percent. It's far from a

permanent solution.

I think he is right. I wish to emphasize the fact that as the economy recovers and rates rise, one of the fallacies of the CBO projections is that back in early 2000s they suggested that interest rates would stay very high. They did not anticipate the collapse in 2008 and 2009 of our economy.

Honestly, I don't think we want to premise our student lending on an economic collapse. I think what we want to do is assume and hope that the economy recovers, which will invariably increase interest rates. We are starting at the low point of interest rates, and then inevitably we are moving up. We are moving up as the economy recovers. We will also move up as the Federal Reserve limits their very aggressive quantitative easing program, where they have been buying securities to depress the rates.

If we look at the CBO projections, parents and graduate students will begin paying more than the current fixed rate of 6.8 percent and 7.9 percent by 2015. That is not a long time. That means the young freshman who is going into college next year might benefit from this proposal, but the younger brother or sister who is a freshman in high school will be paying much more. I think collectively, over time, since this is a permanent proposal, the debts that will accumulate to American families and American students will be significant.

We are essentially adopting a new approach to Federal policy on higher education. We are not subsidizing it; we are not making it below market rates. We are shifting the costs on to students. That is because one of the premises in this proposal, quite obviously, is that there will be no cost to the government, and we are starting with the principle of a rate of 6.8 percent over time. So as we decrease rates for the first few years, just simple arithmetic tells us we have to raise rates going forward.

Also, I think the way this is structured has to be considered. We have chosen not a short-term T-bill rate--a 91-day rate--which is low; we have chosen a 10-year rate which, in itself, is higher. So we have begun our reconstruction of the rate structure by picking a much higher baseline than has been consistent in the past, even with variable rates, and we have had variable rates in the past. Then we have added a premium to that to cover our costs--the cost of default, the cost of the administration of the program.

Interestingly enough, in this proposal, there is a study the GAO is ordered to do to tell us if our cost estimates are in any way close to the real cost to the Federal Government. I think the factor is significantly sufficient that the premium--the delta, if you will--we are charging students is much higher than the real cost, even including default rates, to the Federal Government.

I think this is a proposal that, again, was generated with great sincerity and great diligence, but over time it does not meet the test of consistency with our previous support for higher education. We actually subsidized higher education, and we did it at below-market rates. We did it because we believed we had to give students a chance to educate themselves not only for

their benefit but, just as importantly, for the benefit of this Nation.

I would suggest--and around this Chamber I have said this before-- directly or indirectly, every one of my colleagues who is of a certain age has benefited from subsidized student loans. If they didn't, then a brother or a sister or someone did. Yet we are saying that was good for us, but it is not good for this generation of students. They should bear the risk of interest rate increases.

They should bear the full cost. This is at a time when we have to be much more cognizant of the centrality of higher education in terms of the lifetime wages and earnings of individuals and in terms of our economic competitiveness across the globe.

We all have reached a point that unless we adopt the amendment I propose, we are locking ourselves into increasing rates that go way beyond the current statutory rate of 6.8 percent for Stafford loans and 7.9 percent for PLUS loans. Even with these rates--the current rates-- 6.8 and 7.9 percent--CBO has estimated that the government will generate about $184 million in revenues. That is the difference between the cost of funding and the return. It is just what it costs the government to borrow and what they are getting in revenue from students, accounting for defaults and borrower benefits. So instead of investing in students, we are basically profiting from them, and that point has been made by my colleagues, particularly Senator Warren, over time.

As we move to this new form of rate structure--10-year Treasury bills plus a premium; they are capped, but they are capped at high rates--the government will, in fact, be making even more money.

What I would like to do and what we have tried to do is to propose that we initially freeze rates at 3.4 percent and then spend the time to fix this problem as best we can completely. We need to develop a rate structure that does not provide a huge profit, as defined between the cost of funding and the revenue to the Federal Government, incentivize colleges to lower tuition--and that will be a very difficult and challenging endeavor--and think seriously about refinancing because right now we have students and families facing $1 trillion in debt, and they are suffering under this situation.

We want to take a comprehensive approach, but this is not the approach. This is simply fixing rates. The one certainty in this legislation is that the rates will go up--not right away, but they will go up--and they could go up very quickly, and they could reach the limits very quickly, and that is an additional burden on students. As a result, it will begin to make college more expensive, less affordable, less of an option for many families and youngsters, and it will hurt us in the long run in terms of our economic competitiveness and our ability to grow our economy.

We have had experience with market-based rates in the student loan program before. This is not new. Most recently, the market-based rates for student loans from July 1, 1998, and June 30, 2006, was yield on a 91-day Treasury bill plus 1.7 percent while the student was in school and plus 2.3 percent while the student was in repayment. This rate was capped at 8.25 percent, and it applied to all Stafford loans-- subsidized, unsubsidized, and graduate. For parent PLUS loans, the rate was the yield on the 91-day Treasury bill plus 3.1 percent, capped at 9 percent.

Those rates were a good deal for borrowers. Students who are repaying their loans under this system have a rate of 2.35 percent this year and parents are paying 3.15 percent. That is because interest rates have come down dramatically. One of the reasons for that--perhaps the primary reason--is because we faced an economic potential catastrophe in 2008 and 2009. Economic activity shrunk, rates fell, and the Federal Reserve took a very aggressive program of quantitative easing to deliberately lower interest rates.

Instead of using the 91-day Treasury bill, what this underlying proposal uses is the 10-year Treasury bill. This decision results in a rate that in and of itself is 1.76 percentage points higher for this year alone. If we use the 91-day T-bill rate, we could lower rates even further, but we are using the 10-year rate, so we are already building in almost 2 percentage points of interest for students who will be subject to this legislation.

Since May 1 we have already seen the rates on the 10-year Treasury bill climb nearly 1 percent. Those rates are headed upward, and the CBO has projected them to rise. That is consistent, by the way, with an economic recovery. So the good news is if the economy recovers, interest rates will rise except it is not good news for students because their interest payments will rise. If CBO is wrong, that means we will probably have an economic shock ahead of us which will be bad news for everyone.

So I think we have to be very cognizant of the fact that there is a much better way to do this, and there should be a comprehensive approach.

What we are suggesting, and in the amendment Senator Warren and I are proposing, is that we at least cap the interest rates for the Stafford loans--for the undergraduate loans--at 6.8 percent, which is the current rate, and for the PLUS loans at 7.9 percent so no one, regardless of whether one starts college next fall or 4 years from now, will be worse off than the current situation with the fixed interest rate. I think that would be an improvement. I think, if we don't adopt such an approach, then we are locking students and families into a very costly and predictably increasingly costly structure. We are not making any reforms with respect to the cost of college. We are not dealing with the issue of refinancing.

Honestly, I also think to say, well, if it gets really bad, if we really start hitting those caps--to say we will go back and fix it fundamentally ignores one of the principles that underlies this proposed legislation--that there be no further costs to the government. To fix the interest rate several years from now, when it is 8 percent, again, will cost a lot more than staying with the current 6.8 percent fixed rate and 7.9 percent fixed rate.

So for that reason, I will be opposing the underlying legislation unless we can make significant progress with respect to at least capping the rates at 6.8 percent and 7.9 percent.

With that, I reserve the remainder of my time, and I yield the floor.

The Reed-Warren amendment would provide students and families with certainty by ensuring that interest rates will go no higher than they would under the current fixed rates in present law-- 6.8 percent for student loans and 7.9 percent for PLUS loans. The amendment is fully paid for by a very small--about one-half of 1 percent--surcharge on income over $1 million.

We should do this for students all across the country, and we should do it not only for the students who might be going to college next year but for those who are in high school today and will face, as we know, predictably higher rates.

A young man from Rhode Island wrote a letter to me. He said:

My brother, who is in college, will be paying a lot of

money for college and he's worried he will have a hard time

paying the loan. I'm afraid that by the time I go to college,

loans will be so expensive that I will not be able to pay it

off. My parents help with paying for college but they might

not be able to help with a loan that big. I really want to be

able to go to college.

For those young men and women who are in high school today or who are going to high school, we have to at least vote for this Reed-Warren amendment to make sure interest rates stay at least within the present bounds.

With that, I urge a ``yes'' vote.

I ask for the yeas and nays.

Mr. President, a point of order. I believe we are prepared to voice vote this, and at the proper time I ask that such a motion be made.

Mr. President, I oppose the proposed amendment. It is short-term rate relief, but it is long-term rate pain for thousands of students and families across the country. We can do much better than that. In a few moments, we will have an opportunity after the voice vote to have another small discussion prior to final passage.

Again, I believe this amendment is not--despite the best work and best intentions and great effort by my colleagues--the best work we can do with respect to students and families.

Mr. President, as I indicated previously with respect to the amendment proposed by Senator Manchin, this proposal will provide short-term rate relief but lock in long-term rate pain for thousands of families and students across the country. It also represents the fundamental shift in our approach to student lending. It goes from investing in students and in our future economy to making those students be profit centers for the Federal Government. There is an estimated $184 billion over 10 years of profit in the current baseline. It is the difference between the cost of funding and the revenue paid by the students to the Federal Government. This proposal adds $715 million to that.

Also, we have done nothing to address the $1 trillion of outstanding debt that students face today. This measure will add to that debt.

Education has always been the engine of opportunity in this country. With this legislation, that engine will leave the station with many fewer students aboard.

I urge a ``no'' vote.

Mr. President, I ask unanimous consent the order for the quorum call be rescinded.

Mr. President, as you well know, since you worked awfully hard and very effectively with respect to the issue of student loans, we are about to rush into a complete restructuring of the way we price student loans. I believe this is not the appropriate approach. I think there are some fundamental issues with the student lending program that require a comprehensive approach. I have tried, along with many of my colleagues, to at least extend the 3.4 percent for a year so we can do this systematically and thoughtfully, do it in terms of not just interest rate structures but in terms of incentives to keep college costs down and also to deal with the increasingly difficult issue of the existing loan burdens that students have so they can refinance--not just in the future but families of students struggling today with a huge amount of student debt.

Student debt has exceeded $1 trillion. It has surpassed credit card debt as the second largest household debt that we hold in the United States. In this context, I think we have to go forward and look at this comprehensively.

The bipartisan Student Loan Certainty Act is a product of great effort and very sincere effort to try to deal with this problem. But I do not think it will lead to a long-term stable solution that will benefit students. What I think it will do is shift the costs of these programs increasingly to students. This is not the way it used to be.

The idea that government would generate revenue from student loan programs is a fairly recent one. From the first loan programs we established in the 1950s, the programs were designed as investments, something we paid for and we benefited from through increased productivity, through increased education of our citizens, and increased ability to compete worldwide. It was not designed to generate profits. It was not designed to break even. It was designed to invest in the future of the country through its young men and women.

We invested in education because we understood educational opportunity was directly connected to our prosperity and our security. Indeed, it was the engine that was going to pull individuals up the ranks into the middle class and beyond, and it was going to pull the country forward with increasing prosperity and increasing national benefit.

In response to Sputnik back in the 1950s we created the national defense student loan, what we now know as the Perkins loan, to expand the number of college graduates, especially in the fields of math, science, education, and engineering. Those are the very fields today where we see we need more people--math, science, engineering, and education. Today we call it STEM, a fancy term. Back then it was just math, science, engineering, and education. These were low-cost loans with very generous benefits.

For instance, no interest accrued on the loans while students were in school, and teachers could get these loans forgiven.

In the Higher Education Act of 1965, one of the principal architects was Senator Claiborne Pell, my predecessor. In that act, grants, work- study, and low-cost loans were the three pillars of student financial aid. We gave money to the students without requiring repayments with grants. We had very low cost loans relative to prevailing rates in the country, and then we had a work-study program. Providing more educational opportunity then was seen as a necessity, not a luxury, not something that would be nice to do. And we have all benefited from it.

The productivity of this country today is a direct result of those investments that were made in the 1950s and 1960s. In fact, I suggest, with very rare exceptions, every person in this body benefited. I know I did.

After West Point, which was funded by the government but required at least 5 years of service afterwards, I went to law school. I had to get a loan to help me get through, and I did. In fact, I would also daresay there is nobody in this Chamber today, with very few exceptions, who was without the access to and benefits of very generous student lending that persisted, that was part, that was a fixture of the 1950s, 1960s, 1970s, 1980s.

This notion that we need to educate our young people is even more compelling today than it was in the 1960s and the 1970s.

This is a chart, ``Jobs Requiring at Least Some College Education by 2018.''

In 1973, less than 30 percent of jobs required a college education. You could leave high school--if you had good work habits and good skills--and you could manage to make a living, buy a home, rise up through the ranks of managing production on the floor, and get into management if you were talented, ambitious, et cetera.

Now, you see, by 2018 you are looking at over 60 percent of the jobs, nearly two-thirds, that will require some college. Here we were heavily subsidizing college education. Now we are proposing to say: No, students have to absorb the costs. Families have to absorb the cost. This cannot be a cost to the government in terms of our budget. That logic just doesn't seem compelling to me at all.

We also know not only is college becoming more important in the sense of the jobs that need to be filled, but here is the other reality.

This is the lifetime earnings. You can see there is a huge increase in lifetime earnings with education. As we make it more difficult to go to higher education, we are basically telling people they are not going to earn as much as they could. When we are wondering today about why there is so much inequality in this country, why wages are not going up, it comes back in large part to the fact that we need higher skilled workers, better educated citizens.

As we impose more costs on students and families to go and get this master's degree or professional degree or doctorate degree or bachelor's degree, the market will tell us the higher the cost, the fewer people will do it. We are essentially telling those people they are locked in wherever they are. They are not going to be the ones who move from that humble abode to the middle-class home and beyond.

That, I think, frankly, is one of the most disturbing aspects that people are facing all across this country, the realization and the fear that their children will not do better than they did. Our parents, all of them, I think, could say with great confidence: I am working hard, I am struggling, but I know my children will do better.

One of the reasons our constituents across this country are saying we are not getting it right is this growing perception and feeling that, no, their children will not do better. By the way, this vote speaks volumes about our commitment to making sure the next generation of Americans does better.

Just look at the numbers. This is how you get well compensated in the United States. Our country is based upon the notion that education is the engine that will pull you forward. That is the way we are going to deal with this notion of inequality of income. That is the American solution. Again, I think as we depart from this tradition we are going to find ourselves in an increasingly difficult situation.

We are essentially asking in the proposal that is before us for low- and middle-income students to assume more of the cost of higher education--and their parents. Some can, but they will have less to invest in other things. Some cannot, and they will miss this train, literally.

Even though in constant dollars the maximum Pell grant--we are still providing grants--is nearly where it was in terms of the 1970s, it is paying for a much lower percentage of the cost of higher education. I think that is an important point to note.

This is not just about the level of Federal support. That is why I have urged us to stop and look at a comprehensive approach. What is happening--these are the Pell grants indicating how they went up dramatically in the 1970s and then tapered off and then finally, based upon President Obama's initiative, I believe, in 2009, they went up again based upon our changing from bank-based lending to a direct lending program. We shifted resources to the Pell grants. The Pell grants have been going up.

What has also been going up is tuition. So when we are talking about the road to opportunity, when we are talking about dealing with this program comprehensively, just simply restructuring rates is not going to get it because this is what we are looking at: average tuition and fees at public and private universities. The green line is the 4-year private. That is shooting up out of sight. But we also know, and this might be anecdotal, those are the schools, the elite schools, if you will, that in many cases provide even an express road to opportunity for so many people. That is why they are so competitive to get into. Those costs are rocketing out of sight.

But just the 4-year public colleges, which used to be the backbone of our whole country where with a modest fee you could get a great education, they are going up. We know from testimony that has been recorded here, a lot of it is because, as we are pulling back from supporting students and their families, guess what, States are doing the same thing.

We had years and years of reduced budgets to our university system which have been reversed in only the last few years by the present Governor. We are pulling back. What happens as a result of that? Tuition goes up.

When we look back to the mid-1970s, if a student got a Pell grant, that student could cover most of the cost of a 4-year education at a State school. Students cannot do that now. What does that mean? They have to borrow. Students have to borrow if they are in a situation where they are relatively low income, very low income, or of modest means.

The consequence of this has resulted in an explosion of borrowing. This is the total FFEL--that is the old name for the lending program-- and DL, the direct lending program that is used today for Stafford loans. These are the loan amounts from 1966. At the bottom here, it is very small. It is off the chart. Through the 1970s, it was rather constant. It started to spike up here.

Here is the curve. There is a little bit of a downward spike here, but that might be because people are dropping out. They cannot afford to borrow. I am hearing stories--and my colleagues are hearing stories--of people leaving school. They are saying: What is in it for me? I can't afford to graduate from college with a $25,000 or $50,000 debt and then get a job--or maybe not get a job--that is paying $35,000 a year. I will never get out of that hole.

There has been an extraordinary explosion of lending. As lending has grown, there is more of a need to take steps to curtail the lending or to help students deal with this lending. There is over $1 trillion in outstanding Federal student loan debt that young people are going to have to somehow amortize and pay off through their lifetime.

We have already had studies from the Federal Reserve and leading authorities who say this will delay home acquisition and all the things we thought would happen almost automatically or routinely in this country. A student goes to college, graduates, and then by their late twenties they have done enough in their job to buy a home, start a family, and become a pillar of the middle class. That hope and dream is receding.

There is another aspect of this that gets into the whole accounting issue

we have to deal with. CBO looked at these issues and scored them. They indicated that between 2013 and 2023--and that is over the next 10 years--we will generate about $184 billion worth of profit for the Federal Government. It is the difference between what the students are paying us back and what we are using to borrow. It is essentially the difference between our costs and their repayment to us. This is a remarkable shift from investing in students throughout all of these decades--post-World War II--to now essentially being able to generate income from students.

Since 2007, we have been seeing a positive return to the Federal Government on student loans--even from loans made under the old bank- based system--because of the way the interest rates have run, because of our borrowing costs, and because of the costs students have to pay.

Given the fact we are able to generate $184 billion over 10 years, I think we should be able to find our way through to a 3.4-percent rate for at least another year, but that has proven elusive in terms of the votes on the floor.

I think all of this strongly suggests we have a major challenge to reconfigure our student lending system, our grant system, and our work- study system. We have a major challenge in lowering the cost of a college education. Rather than taking off like a rocket, the costs should be coming down. We cannot do that in a matter of 2 or 3 days. It is going to take some comprehensive and coherent work over many weeks and months.

The problem we face in terms of looking forward and making changes is we have locked the interest rate at 6.8 percent under our budget rules. As a result, everything we do has to rotate around 6.8 percent.

The proposals by my colleagues would lower interest rates in the first few years. However, in order to make up for the 6.8-percent assumption in the budget, it would have to raise interest rates in the out-years. For the first several years we are going to provide an increasingly expensive but starting relatively inexpensive--approach to student borrowing. But that has to be made up arithmetically by a higher cost for those succeeding generations.

For example, if you are a senior in high school today, you will do reasonably well--not as well as 3.4 percent, but reasonably well. If you have a younger sibling who is in eighth or ninth grade, he or she will pay for you because those rates--just to make up the gap--will be much higher. We know it will be higher.

I must commend the authors of the legislation who have at least put in a cap for the various lending programs. Originally, as this proposal made its way through the Senate, there were no caps, so rates could have soared to astronomical heights. Still, even with the caps, over the long term the succeeding generations of students--and this is a long-term proposal and not a proposal that has a finite period of time--will have rates that will go up and up and up.

The key aspect that is driving all of this is the assumption that we should not be investing in higher education, as we have for decades, and that we have to have a budget-neutral solution. Rather than saying we can go ahead and do things, such as close tax loopholes, let's move that money into higher education, which I would argue would be beneficial for everyone in the short and long run.

We have been locked into this budget-neutral approach, and there is a $715 million surplus, but it is as close to zero, as far as budget neutrality, as they could get.

I go back to the point of revenue neutral, which means that given the present law of a fixed rate of 6.8 percent for undergraduate loans, 7.9 percent for other loans, we are going to enjoy it now and pay later. That is the essence of the proposal before us. Students could pay much more later.

I also think the idea that we are going to fix this 2 years or 3 years hence is not reasonable because the cost of fixing it goes up with each year. If our principle and our presumption is that it always has to be revenue neutral, there might be some good ideas about fixing it, but where is the money? That is what is going to have to be included to fix it.

I think we can do better. I will be offering an amendment with Senator Warren which will cap this proposal at 6.8 percent for student loans and 7.9 percent for the PLUS family loan--the parent loan--that will be comparable to what the fixed loan rates are today. This way we can at least tell all of our constituents: No student will be worse off--not just over 3 or 4 years--over the next 10 to 20 years, or however long this legislation endures. I think that is something that would be a useful improvement.

We are paying for it by a surcharge for people who are making over $1 million. It is a very small surcharge. We should be able to say: We can find the resources to invest in the future of the country and to support and subsidize students so they can improve their skills, move into the middle class, and move the country forward. We have always done it. We can do it today.

I urge my colleagues to favorably consider the amendment when it is proposed.

Again, there have been extraordinary efforts on the part of many-- principled and thoughtful--to try to deal with this issue. I go back to my initial point: If we want to deal with it, we have to have time, and, frankly, we have to have resources. The way this is evolving, we don't have time and we are unwilling, it appears at this juncture, to commit significant resources to solve this problem in a comprehensive and coherent way that will benefit students and families and in the long run will benefit this country.

With that, I yield the floor and note the absence of a quorum.

Mr. President, over the last few weeks many of my colleagues have been engaged in a very serious, very deliberate, very thoughtful attempt to deal with the issue of student loan interest rates, which doubled July 1 for subsidized loans. They have contributed significantly in terms of trying to move this issue forward to reach a thoughtful and appropriate conclusion.

From what I have heard, under their approach--the Bipartisan Student Loan Certainty Act of 2013--I don't think, despite the good efforts and good intentions, that they have reached the objective, which is to make college affordable for all of our students and to somehow try to prevent this tidal wave of student financial debt, which is in some cases overwhelming to so many students and families across the country. Instead of emphasizing the students, I think what they have done is just tried to shield the government from investing in those students.

The clear impact of the legislation that is being proposed is that it will increase the cost of education for students. We were in a position where we legislatively reduced the rate to 3.4 percent. We had an extension for 1 year to this July. It doubled to the previous rate in existing law of 6.8 percent.

What this proposal does is to keep the rate relatively low at first-- although it goes up a bit higher than the 3.4 percent--but invariably, mathematically, it gets very high. They have placed some caps there-- and that is something for which I salute the authors, their efforts to put caps on the different programs--but those caps are very high also.

The inevitability is that the one sure thing is that over the course of the next few years, students will pay more for higher education at a time when they can afford it less and less and at a time when we need more fully qualified graduates to take the jobs of this new century to be competitive internationally.

I think we have before us, despite all these great efforts, legislation that will shift more and more costs to students. Instead of preventing the doubling of these rates to 6.8 percent, it would gradually raise these rates above 6.8 percent. We might see 1, 2, or 3 years of rates that are relatively below that number, but inevitably, mathematically, those rates will go beyond 6.8 percent, and the caps are rather high.

High school students of today will be paying a lot more for their student loans, and their families will be paying a lot more. It will add to the debt of these students and their families. It will restrict their ability to become not only qualified workers in our economy but also the people who drive the economy, young people who buy homes, buy automobiles, and who are able, because of their skills, to earn enough to contribute not just to the productivity of the country but their own ability to make purchases and keep that engine of the economy moving forward.

There is no real guess as to what level it would go up to because now we are moving away from fixed rates and moving toward an adjustable- rate. The rates have been pegged to a 10-year Treasury bill--a rate that we know is going up. It has gone up nearly 1 percent since just May, and in this environment it is likely to continue to go up. The rate students could pay could rise much more quickly than the projections even that CBO is suggesting. It could rise because of Federal Reserve policy. If they decide to unwind quantitative easing, and in such a way that rates shoot up, then those rates could spike very dramatically.

Students and advocates have raised their voices loud and clear urging us not to take this kind of action. They have said that no deal is better than a bad deal. The people we are trying to

help are actually saying: No, that is not the kind of help we need.

With deep regret, I believe this is not the right approach going forward. What the students and advocates have asked us to do is to keep it at 3.4 percent. I have proposed legislation to do that for a year so that we could work on some of the fundamental issues that are driving costs, such as the incentives and disincentives in colleges for tuition; the issue of--which is separate but very important--how we not only provide reasonable interest rates but how we refinance all those students who are overwhelmed by debt, how they take advantage of the historically low rates of today. All of those difficult issues are being put off. I think they should be engaged, and I think we need the time to engage on those issues.

Unlike the approach of at least another year of 3.4 percent, the proposal before us would lock in about $184 billion in student loan revenue. That is in the current CBO baseline. Then there is an additional $715 million that this proposal would generate. All of that is coming out of the pockets of students and families.

Paying for college is tough. This legislation, unfortunately, could make it tougher because it would put in a permanent structure for setting student loan interest rates that could quickly result in students and parents paying more for student loans. This is not a temporary fix to get us to a better place in terms of incentives for tuition, in terms of refinancing, in terms of letting students more actively and more affordably pursue college education; this is the long term.

It is simple math. In a zero budget environment--and that is one of the principles incorporated in this legislation--reducing what students pay today means that students will have to pay more tomorrow. If we are assuming a 6.8-percent fixed rate over 10 years and we lower that rate, as this legislation does, then just do the math--it is going to have to be higher to keep it zero or neutral with respect to the budget, and that is what is going to happen. So we are going to have some relief today, but it will be followed inevitably by students who will pay more and individually have a much larger burden to bear.

I think we are in the position of taking steps that are going to make college more expensive at a time when we have to make it more affordable not only for individual families and students but for the future and success of our economy.

We are also departing from our past experience with market-based interest rates in the Federal student loan programs. This proposal also locks in historically high surcharges on top of basing the loans on a higher cost instrument. Previously we were using the 91-day T-bill, and because it was a short-term note, the interest rates were lower relative to the 10-year note. Now we are using a much higher baseline, and then we are adding historically higher premiums to that baseline for graduate students and parents. So the legislation builds in additional costs that we haven't used even when we had rates that were based on market conditions.

Under the market-based rates that were in effect from 1998 to 2006, students benefited from historically low interest rates. These rates were indexed, as I said, at the lower 91-day Treasury bill rate rather than the 10-year Treasury bill rate. As I mentioned before, we already know this 10-year Treasury bill rate is moving up.

We are making these changes from the perspective of interest rates at exactly the wrong time--at the bottom of the interest rate curve as it starts its climb up. That argues, to me--and, frankly, I think most people, if they were going to make a choice on a loan today, would try to pick a fixed rate, even if it was a little higher than the introductory rate on a variable loan, because of the experience of the last several years and because of what they are seeing all around them--rising interest rates over time.

This year, borrowers who are repaying these loans--I am talking about the loans that were made in that period of time, 1998 through 2006-- have an interest rate of 2.35 percent, and over the last 5 years their rate averaged 2.41 percent. They have benefited from the declining rate. They have benefited from the huge expansion of Federal Reserve quantitative easing. They have benefited from an economy that slowed down, ironically, so that interest rates were falling. Now we are on the other side of that curve, and students won't benefit from the market rates. They will actually see higher rates as we go forward.

We offered these rates in the context of the old program where we had to also subsidize banks. Today, I would think, with the banks out of the picture and with the government, through direct lending, doing the lending, we should be able to find a solution where we can actually lock in much lower rates for students. This is the kind of solution that will take time--the time, I believe, that we could have spent and should spend by extending the 3.4 percent rate another year and looking creatively and thoughtfully at a whole spectrum of issues but with the goal of trying to give students and families the assurances that they can afford college and also that college will be affordable in the sense that the cost of college will start coming under some type of control. That takes a lot of work, and we are not doing that work today. Instead, under this proposal, we are adopting a rate structure permanently that, because of where we are in the economy, will invariably mean that students will pay more and more each year.

I have mentioned before that because of the great effort of some of my colleagues--Senator Manchin, Senator King, Senator Alexander, Senator Burr, Senator Durbin, and Chairman Harkin, I could go on and on--there have been some improvements made in the initial version of this legislation, particularly caps on individual loan programs. Those caps are very high. Under the new proposal, the cap for the undergraduate loans is 8.25 percent, and then there are caps that go all the way up to 10.5 percent. Again, let's step back here. We are putting a cap at those levels because there is a reasonable expectation that we will reach those levels. As a result, we are going from the current law, which is 6.8 percent, to as high as--in some cases for parent loans--10.5 percent. This is a huge swing not in favor of the students but to their disadvantage.

This is why I am working on an amendment, which I hope to offer, that would put the cap at 6.8 percent for all Stafford loans and at 7.9 percent for the parent PLUS loan.

Again, if we are looking at a fixed rate of 6.8 percent and we can't do better than that 2, 3, 4, 5 years from now, we have to ask ourselves whether we really need to make these changes or whether we should make these changes.

If we adopt the amendment I propose, at least we are telling parents they won't be worse off than current law and they will be better off-- because of interest rates at the moment--in the next several years. I hope we can do that.

We are looking at Federal student loan debt that is over $1 trillion. This can only mathematically increase that debt. We should be investing in our students, giving them the benefit of relatively low-cost loans so they can go to school, get on with their lives, and get our economy moving again.

This is also an issue that goes to one of the core issues we face as a country, and indeed it is a core issue across the globe--the growing inequality of income and, in a sense, opportunity in our country and countries across the globe.

In the United States, the great engine for opportunity has always been education. If we make it more expensive, then fewer people can take advantage of it. If fewer people take advantage of it, the inequality will grow because they won't have the chance for the good- paying jobs. By the way, in a competitive global economy, we could see our position slip because we don't have these talented people.

So this is an issue that strikes not only at the technical aspects of a program, this goes to the heart of what it is that gives opportunity to America, and I believe it is education. I believe that if we make it expensive, fewer opportunities will be available. If we make it expensive, we will be less productive and less competitive.

I believe that despite the efforts of extraordinarily talented and dedicated colleagues, we can do better and we should do better. As such, I reluctantly

oppose the underlying legislation. I would at least hope we could cap it if the amendment I offered would be accepted.

I yield the floor.

Mr. President, I am pleased to join with my colleague, Senator Whitehouse, to help mark the 375th anniversary of the settlement of Portsmouth, RI.

Portsmouth is predominantly located on Aquidneck Island in Narragansett Bay, and also encompasses a number of smaller islands including Prudence, Hog, Patience, and Hope. It is the second oldest community in Rhode Island and is home to over 17,000 people. With over 50 miles of coastline, Portsmouth enjoys beautiful views of the surrounding bay and islands.

Portsmouth has a long and rich history. In 1638, Roger Williams convinced religious dissenters from the Boston Colony to settle the area now known as Portsmouth. One of these dissenters, Anne Hutchinson, perhaps the most well-known of the founders of Portsmouth, rebelled against the Puritanical lifestyle in Massachusetts Bay, undergoing a rigorous trial before being banished and excommunicated from the Boston Church. Hutchinson founded the town of Portsmouth with fellow colonists who were also searching for religious freedom. Portsmouth is believed to be the first town in the New World that was established by a woman. The signing of the Portsmouth Compact in March of 1638 created the first true democracy in America.

The town played a role in our Nation's fight for independence. The Battle of Rhode Island, which took place in 1778, was significant to the history of the Revolutionary War because it was the first joint operation of American and French forces and also was the only battle in which black Americans fought as their own unit as part of the First Rhode Island Regiment, alongside Native Americans. The site

of the battle is designated as a National Historic Landmark by a plaque and monuments at Patriots Park. Portsmouth was also home to a general army hospital that treated thousands of wounded Union soldiers and Confederate prisoners during the Civil War.

With its vast shoreline, Portsmouth's maritime legacy is historically noteworthy. It was the site of the Navy's first PT-boat training facility, the Motor Torpedo Boat Squadron Training Center in Melville, where President John F. Kennedy trained. Portsmouth is now fittingly the home of US Sailing, which is the governing body for the sport of sailing in the United States.

As we celebrate the 375th anniversary of Portsmouth's settlement, I would like to recognize the residents of Portsmouth for all of their efforts to preserve one of our country's most treasured places. Like the town's motto for this anniversary celebration proclaims, Portsmouth has a proud heritage and a bright future. Congratulations to the Town of Portsmouth on its 375th anniversary.

Mr. President, today I am reintroducing bipartisan legislation to provide support for environmental education in our Nation's classrooms. I thank Senators Kirk, Murray, Tom Udall, Durbin, and Whitehouse for agreeing to be original cosponsors of the No Child Left Inside Act of 2013.

According to the National Association for Environmental Education, 47 states and the District of Columbia have taken steps towards developing plans to integrate environmental literacy into their statewide educational initiatives. In Rhode Island, organizations such as the Rhode Island Environmental Education Association, Roger Williams Park Zoo, Save the Bay, the Nature Conservancy, and the Audubon Society, as well as countless schools and teachers, are offering educational and outdoor experiences that many children may never otherwise have, helping inspire them to learn. In partnership with the Rhode Island Department of Education, these organizations have developed a statewide environmental literacy plan that is now being put into action.

Given the major environmental challenges we face today, our bill seeks to prioritize teaching our young people about their natural world. For more than three decades, environmental education has been a growing part of effective instruction in America's schools. Responding to the need to improve student achievement and prepare students for the 21st century economy, many schools throughout the Nation now offer some form of environmental education.

Yet, environmental education is facing a significant challenge, and remains out of reach for too many children. With many schools being forced to scale back or eliminate environmental programs, fewer and fewer students are able to take part in related classroom instruction and field investigations, however effective or in demand these programs are.

The No Child Left Inside Act would increase environmental literacy among elementary and secondary students by encouraging and providing assistance to states for the development and implementation of environmental literacy plans and promoting professional development for teachers on how to integrate environmental literacy and field experiences into their instruction.

The legislation would also support partnerships with high-need school districts to initiate, expand, or improve their environmental education curriculum, and for replication and dissemination of effective practices. Finally, the legislation would support interagency coordination and reporting on environmental education opportunities across the Federal Government. This legislation has broad support among national and State environmental and educational groups.

The American public recognizes that the environment is a central issue to our future health and well-being. In the private sector, business leaders also increasingly believe that an environmentally literate workforce is critical to their long-term success. They recognize that better, more efficient environmental practices improve the bottom line and help position their companies for the future.

Environmental education helps prepare the next generation with the skills and knowledge necessary to be competitive in the global economy. Studies have shown that it enhances student achievement in science and other core subjects and increases student engagement and critical thinking skills. And it promotes healthy lifestyles by encouraging kids to get outside.

That is why I encourage my colleagues to cosponsor the bipartisan No Child Left Inside Act and to join with Senator Kirk and me to include its provisions into the reauthorization of the Elementary and Secondary Education Act.

Mr. President, today I am reintroducing bipartisan legislation to provide support for environmental education in our Nation's classrooms. I thank Senators Kirk, Murray, Tom Udall, Durbin, and Whitehouse for agreeing to be original cosponsors of the No Child Left Inside Act of 2013.

According to the National Association for Environmental Education, 47 states and the District of Columbia have taken steps towards developing plans to integrate environmental literacy into their statewide educational initiatives. In Rhode Island, organizations such as the Rhode Island Environmental Education Association, Roger Williams Park Zoo, Save the Bay, the Nature Conservancy, and the Audubon Society, as well as countless schools and teachers, are offering educational and outdoor experiences that many children may never otherwise have, helping inspire them to learn. In partnership with the Rhode Island Department of Education, these organizations have developed a statewide environmental literacy plan that is now being put into action.

Given the major environmental challenges we face today, our bill seeks to prioritize teaching our young people about their natural world. For more than three decades, environmental education has been a growing part of effective instruction in America's schools. Responding to the need to improve student achievement and prepare students for the 21st century economy, many schools throughout the Nation now offer some form of environmental education.

Yet, environmental education is facing a significant challenge, and remains out of reach for too many children. With many schools being forced to scale back or eliminate environmental programs, fewer and fewer students are able to take part in related classroom instruction and field investigations, however effective or in demand these programs are.

The No Child Left Inside Act would increase environmental literacy among elementary and secondary students by encouraging and providing assistance to states for the development and implementation of environmental literacy plans and promoting professional development for teachers on how to integrate environmental literacy and field experiences into their instruction.

The legislation would also support partnerships with high-need school districts to initiate, expand, or improve their environmental education curriculum, and for replication and dissemination of effective practices. Finally, the legislation would support interagency coordination and reporting on environmental education opportunities across the Federal Government. This legislation has broad support among national and State environmental and educational groups.

The American public recognizes that the environment is a central issue to our future health and well-being. In the private sector, business leaders also increasingly believe that an environmentally literate workforce is critical to their long-term success. They recognize that better, more efficient environmental practices improve the bottom line and help position their companies for the future.

Environmental education helps prepare the next generation with the skills and knowledge necessary to be competitive in the global economy. Studies have shown that it enhances student achievement in science and other core subjects and increases student engagement and critical thinking skills. And it promotes healthy lifestyles by encouraging kids to get outside.

That is why I encourage my colleagues to cosponsor the bipartisan No Child Left Inside Act and to join with Senator Kirk and me to include its provisions into the reauthorization of the Elementary and Secondary Education Act.

Mr. President, today I introduce the Family Engagement in Education Act with my colleagues Senator Coons and Senator Whitehouse. I thank Representative Thompson for introducing the House companion of this bipartisan bill.

Our legislation will strengthen family engagement in education at the local, state, and national levels. It will empower parents by increasing school district resources dedicated to family engagement activities from one percent to 2 percent of the district's Title I allocation. It will also improve the quality of family engagement practices at the school level by requiring school districts to develop and implement standards-based policies and practices for family-school partnerships. It will build State and local capacity for effective family engagement in education by setting aside at least 0.3 percent of the State Title I allocation for statewide family engagement in education activities, such as establishing statewide family engagement centers to continue and enhance the work that had been supported through the Parent Information Resource Centers. For states with Title I-A allocations above $60 million, the State Educational agency will make grants to at least one local family engagement in education center to provide innovative programming and services, such as leadership training and family literacy, to local families and to remove barriers to family engagement, and to support State-level activities in the highest need areas of the State. Finally, at the national level, our legislation will require the Secretary of Education the convene practitioners, researchers, and other experts in the field of family engagement in education to develop recommended metrics for measuring the quality and outcomes of family engagement in a child's education.

Research demonstrates that family engagement in a child's education increases student achievement, improves attendance, and reduces dropout rates. A study by Anne Seitsinger and Steven Brand at the University of Rhode Island's Center for School Improvement and Educational Policy found that students whose parents support their education through learning activities at home and discuss the importance of education perform better in school. Yet too often, family engagement is not built into our school improvement efforts in a systematic way. The Family Engagement in Education Act will promote meaningful family engagement

policies and programs at the national, state, and local levels to ensure that all students are on track to be career and college-ready.

This legislation builds on my successful efforts in the last reauthorization of the Elementary and Secondary Education Act, ESEA, the 2001 No Child Left Behind Act, to incorporate provisions throughout the law to strengthen and boost parental involvement. It is also in line with the administration's blueprint for the ESEA reauthorization, which calls for doubling the amount that school districts are required to set aside for parental involvement and encouraging states to use some of their Title I funding to support local family engagement centers in education.

Developed with the National Family, School, and Community Engagement Working Group, which includes organizations such as National PTA, United Way Worldwide, Harvard Family Research Project, and National Council of La Raza, and endorsed by hundreds of local, state, and national organizations, this legislation represents the broad consensus that we must do a better job of engaging families in all aspects of their children's education.

I urge my colleagues to cosponsor the Family Engagement in Education Act, and to work for its inclusion in the forthcoming debate to reauthorize and renew the Elementary and Secondary Education Act.

Mr. President, today I introduce the Family Engagement in Education Act with my colleagues Senator Coons and Senator Whitehouse. I thank Representative Thompson for introducing the House companion of this bipartisan bill.

Our legislation will strengthen family engagement in education at the local, state, and national levels. It will empower parents by increasing school district resources dedicated to family engagement activities from one percent to 2 percent of the district's Title I allocation. It will also improve the quality of family engagement practices at the school level by requiring school districts to develop and implement standards-based policies and practices for family-school partnerships. It will build State and local capacity for effective family engagement in education by setting aside at least 0.3 percent of the State Title I allocation for statewide family engagement in education activities, such as establishing statewide family engagement centers to continue and enhance the work that had been supported through the Parent Information Resource Centers. For states with Title I-A allocations above $60 million, the State Educational agency will make grants to at least one local family engagement in education center to provide innovative programming and services, such as leadership training and family literacy, to local families and to remove barriers to family engagement, and to support State-level activities in the highest need areas of the State. Finally, at the national level, our legislation will require the Secretary of Education the convene practitioners, researchers, and other experts in the field of family engagement in education to develop recommended metrics for measuring the quality and outcomes of family engagement in a child's education.

Research demonstrates that family engagement in a child's education increases student achievement, improves attendance, and reduces dropout rates. A study by Anne Seitsinger and Steven Brand at the University of Rhode Island's Center for School Improvement and Educational Policy found that students whose parents support their education through learning activities at home and discuss the importance of education perform better in school. Yet too often, family engagement is not built into our school improvement efforts in a systematic way. The Family Engagement in Education Act will promote meaningful family engagement

policies and programs at the national, state, and local levels to ensure that all students are on track to be career and college-ready.

This legislation builds on my successful efforts in the last reauthorization of the Elementary and Secondary Education Act, ESEA, the 2001 No Child Left Behind Act, to incorporate provisions throughout the law to strengthen and boost parental involvement. It is also in line with the administration's blueprint for the ESEA reauthorization, which calls for doubling the amount that school districts are required to set aside for parental involvement and encouraging states to use some of their Title I funding to support local family engagement centers in education.

Developed with the National Family, School, and Community Engagement Working Group, which includes organizations such as National PTA, United Way Worldwide, Harvard Family Research Project, and National Council of La Raza, and endorsed by hundreds of local, state, and national organizations, this legislation represents the broad consensus that we must do a better job of engaging families in all aspects of their children's education.

I urge my colleagues to cosponsor the Family Engagement in Education Act, and to work for its inclusion in the forthcoming debate to reauthorize and renew the Elementary and Secondary Education Act.

Madam President, let me commend Senator Stabenow, Senator Harkin, Senator Warren, Senator Franken, and Senator Hagan, particularly, who is the cosponsor of the legislation I have proposed.

My proposal would keep the student loan interest rate for subsidized Stafford loans at 3.4 percent while we deal with a very complicated and complex set of issues. It is not just the rate structure; it is the issue of providing appropriate incentives to control the costs of higher education. It is also the issue of refinancing existing debt and prospective debt so that this huge wall of debt, the avalanche of debt affecting college graduates and professional school graduates today, can be addressed. I don't think we can do that--because these are complicated programs--off the cuff, as we are attempting to do today or as we have been over the last several days.

It turns out that if we do not extend this rate for at least a year, but instead take up the so-called bipartisan proposal eventually rates will rise on students across the board. That is because the law now calls for a 6.8-percent rate for the Stafford subsidized and unsubsidized loans and 7.9 percent for PLUS loans--fixed rates--and in order to score this as a zero in terms of the Congressional Budget Office and deficit effects, we have to over that time make up all of that interest.

The proponents of the alternate approach are suggesting we will go with a lower rate now, but that simply means mathematically we will have to have higher rates in the future. The question of when that future arrives is a function of the way interest rates will be moving in the overall economy, and every indication is those interest rates will start rising, and perhaps quickly. The Federal Reserve has already indicated they are beginning to pull back on their quantitative easing, which means rates are likely to go up. We have seen a significant rise in the 10-year T-bill rate. Since May, it has gone up almost a full percentage point. So we are in a rising rate environment, and the other side proposes moving from a fixed rate to a floating rate, without an effective cap.

What we know is that--it might not be next year or the following year but relatively quickly--we could likely see and will likely see students paying higher than the 6.8-percent rate and, without a cap, it could be significantly higher.

If we adopt the proposal suggested by my colleagues--and they have been working with great energy and great sincerity to try to come to a solution--I am afraid we are going to ultimately end up seeing students paying much more, and that is not what we should be about.

We have a situation right now, even with the 3.4-percent rate that doubled to 6.8 percent on July 1, where the Federal Government is making about $50 billion this year, between the cost of funds and the repayments being made by students, so students have become profit centers for the Federal Government rather than, as I think the intention of the program was, that the Federal program was going to help students get through college so they can help us as productive workers in our economy.

It is projected that these Federal student loan programs between now and 2023, over a 10-year period, will make $184 billion for the Federal Government, in terms of the difference between what students are paying back

and the cost of borrowing from the government. So there is a lot we could do--but not in 24 hours--to redesign our program so students are not essentially being hammered with huge debts as we are benefiting profitably from those students.

The CBO estimates that under this Bipartisan Student Loan Certainty Act, between 2017 and 2023, students would pay an additional $37.8 billion more on their loans than they would under the current rate of 6.8 percent. This goes to my initial point. The first few years have been designed so interest rates will be lower than 6.8 percent. However, according to the CBO, between 2017 and 2023 they will be much higher--so if a person is a high school student right now, they are looking at paying a lot of money if they intend to go to college--about $37.8 billion more--because it all has to balance out to effectively generate as much revenue as a 6.8-percent interest rate, which is the current rate.

Students know that. That is why they have come to us and said, Listen, thanks, but no thanks. This short-run discount of a few years in terms of the interest rate, we know we might get the benefit if we have already started or are just finishing college. We definitely know that our younger brothers and sisters in high school and another generation of Americans will be paying for it.

So I don't think we should take that approach. I think what we have said is let's wait. We have a lot of work to do. We want to look at proposals that might actually align the real cost of Federal lending for a college education and the real charges we impose on students. Right now, my sense is what our colleagues have done in their bipartisan approach has been essentially to make sure the first few years look good--they are certainly less than 6.8 percent, close to 3.4 percent--but then they have to put in a rather arbitrary delta--an increase in costs--because at the end of the 10-year period they are going to have to make up all of the interest that would have been charged at 6.8 percent. I don't think that is the way to approach fundamental reform of college loans in this country.

There is another point I think is important to make as well, which is we have always either had a fixed rate or an adjustable rate with a cap on each loan program--a cap on subsidized Stafford loans, unsubsidized Stafford loans, and on PLUS loans for families. Now, in the bipartisan proposal, they don't have a cap. There is some discussion that if students consolidate loans, they will get an 8.25-percent cap. But consolidation can only take place after a student is in repayment. And before a student is in repayment, all of that interest on the unsubsidized Stafford loans and the PLUS loans is accumulating and being capitalized into what the student owes. So when the student consolidates, they have a much bigger principal to pay off. There might be a cap of 8.25 percent, but it is a much bigger principal. By the way, the loan is extended over a longer period of time, so they also have to pay for that longer extension of time.

That is not the cap we have had before in the context of these programs. It has been a cap on the individual loan, a cap on the subsidized loan and unsubsidized loan, and a cap on the PLUS loans. I think that is a major fault within the proposal we are seeing today.

The other issue, which goes to the index, is that a 10-year T-bill interest rate has been chosen. Typically, we have chosen a 91-day T- bill, and the 91-day T-bill is cheaper, frankly. We start off with a much lower index, which lowers what the student has to pay, and then we add other costs to it, including the discount estimate of default, and all of those things come up with the final rate. But we are going to a 10-year T-bill rate, which means students will be paying more relative to a 91-day T-bill rate. Again, I don't think that is what we want to do.

We want to take the time to try to address this whole set of issues, to do it in a thoughtful way, to understand that one of the big challenges we have is not just the issue of what rate but also how do we keep college costs in check. How do we provide the kind of education students need to be competitive in the workplace? How do we deal with the interaction between all of these different types of loans? How do we go ahead and--again, this might be one of the biggest challenges we face going forward--how do we somehow allow these students who are drowning in debt to effectively refinance these loans so they can buy homes, they can buy cars, they can participate in the economy? That is not included in this proposal.

Indeed, one of my concerns is with these rates locked in--and this is long-term legislation--we won't have the proper incentive to effectively deal with these issues; we will just let them slide along. I think that would be to our great detriment and, more importantly, to the detriment of families throughout the country.

There have been--and appropriately so--comments and criticism of this short-term approach. We should have fixed it last year. Well, we haven't fixed it, and I think we have to give ourselves the time to fix it.

There is the suggestion that we are dealing with a portion of the loans--the subsidized Stafford loans--and everybody else won't get a benefit. From the numbers we have seen from CBO, one thing is certain: In the last years of the other side's proposal, from at least 2017 to 2023, everyone--subsidized, unsubsidized, and PLUS loans--will be paying more. So the one conclusion we can draw, if we go to the alternative approach, is that eventually every borrower will be paying more.

Therefore, I very strongly urge that we move forward with this cloture vote to get on to the legislation. As Senator Harkin rightly pointed out, once we are on the legislation, it is open to amendment. At least we can debate the proposals from all of my colleagues that could improve or change or modify the underlying bill. But if we don't get to cloture, then we are not moving forward, and I think we should at least move forward.

With that, I yield the floor.

Madam President, I ask unanimous consent that the order for the quorum call be rescinded.

Madam President, we are about to take this vote. It is vitally important. The proposal is very straightforward, to extend the interest rate for subsidized Stafford loans at 3.4 percent. It is fully paid for. It will allow us to work through a very complicated set of issues. It will allow us to avoid raising rates this year and work toward a proposal we hope will avoid rising rates in the future.

The alternative proposal eventually raises rates on every student, not immediately, but CBO indicates by at least 2017 the rates will be up.

This is on top of a huge cascade of student debt we have to deal with. In fact, one of the major issues we should deal with is how do we refinance the existing loans that are at high rates. Refinancing will be even more important if we were to enact the rising rates coming from the proposals on the other side.

I urge all of my colleagues to support cloture and move forward to debate this bill.

I yield the floor.

Mr. President, I ask unanimous consent that the Committee on

Agriculture, Nutrition, and Forestry be authorized to meet during the session of the Senate on July 10, 2013, at 2:30 p.m. in room SH-562 of the Hart Senate Office Building.

Mr. President, I ask unanimous consent that the Committee on Finance be authorized to meet during the session of the Senate on July 10, 2013, at 10 a.m. in room SD-215 of the Dirksen Senate Office Building, to conduct a hearing entitled ``Repealing the SGR and the Path Forward: A View from CMS.''

Mr. President, I ask unanimous consent that the Committee on Health, Education, Labor, and Pensions be authorized to meet during the session of the Senate on July 10, 2013, at 10 a.m. in room SD-430 of the Dirksen Senate Office Building.

Mr. President, I ask unanimous consent that the Committee on Homeland Security and Governmental Affairs be authorized to meet during the session of the Senate on July 10, 2013, at 10 a.m. to conduct a hearing entitled ``Lessons Learned from the Boston Marathon Bombings: Preparing for and Responding to the Attack.''

Mr. President, I ask unanimous consent that the Committee on the Judiciary be authorized to meet during the session of the Senate on July 10, 2013, at 10 a.m., in room SD-226 of the Dirksen Senate Office Building, to conduct a hearing entitled ``Judicial Nominations.''

Mr. President, I ask unanimous consent that the Special Committee on Aging be authorized to meet during the session of the Senate on July 10, 2013, to conduct a hearing entitled ``Diabetes Research: Reducing the Burden of Diabetes at All Ages and Stages.''

The Committee will meet in room G-50 of the Dirksen Senate Office Building beinnging at 2 p.m.

Mr. President, I ask unanimous consent that the Subcommittee on Consumer Protection, Product Safety, and Insurance of the Committee on Commerce, Science, and Transportation be authorized to meet during the session of the Senate on July 10, 2013, at 10 a.m. in room 253 of the Russell Senate Office Building.

The Committee will conduct a hearing entitled, ``Stopping Fraudulent Robocall Scams: Can More Be Done?''