Jim Jeffords

Mr. JEFFORDS

Mr. JEFFORDS. Mr. President, I rise to once again express my concern over the plight of Medicare beneficiaries who are in need of home health care services. I am pleased to cosponsor the Home Health Access Preservation Act of 1998, with my colleagues on the Senate Finance Committee, as an attempt to address these concerns. The Interim Payment System which was enacted by this Congress for the reimbursement of home health care services is not achieving the policy goals that Congress wants nor is it not serving the best interest of American citizens. The act is appropriately titled because, without a correction, access to home health services for Medicare's most vulnerable beneficiaries will be seriously damaged. Since the new reimbursement system has been implemented, no fewer than 1,200 agencies have left Medicare program and most of these 1,200 have been forced to cease operations. Although many of our health policy actions are based upon allowing the market to determine the optimum efficiency of our health care system, we must recognize that not all areas and all sectors are prepared for a rapid change in how these forces operate. The problem of access to home care is particularly troublesome in rural areas and inner cities where these services are sorely needed. My home State of Vermont is a case in point. Home health agencies and their patients are facing a true crisis. There are only 13 agencies in the State, all not-for-profit, each serving a distinct and separate area. The system was developed to meet the needs of our largely rural State, and all of these agencies have a long tradition of providing quality care to our citizens. We cannot accept the loss of a single agency without serious consequences for patients and other sectors of care. I want to emphasize that today we are proposing a revision to the home health reimbursement system because of our deep concern for the welfare of those frail elders and disabled individuals who have come to depend upon home care for their very existence. Yes, we are concerned about fiscal responsibility. We remain determined to eliminate fraud and abuse within the Medicare program. Of course, we must find a way to preserve the Medicare Trust Fund for future generations. But it is not acceptable to seek these goals by any mechanism that will impose an even greater burden on those who are most in need of our help. The Home Health Access Preservation Act of 1998 is budget neutral. It does not change the fact that home health agencies will have to work hard to remain financially viable and allocate their resources carefully. The Act does, however, level the playing field for home health agencies. Under the present IPS system, agencies in close proximity to one another are expected to operate competitively under highly divergent payment limits. Furthermore, under the current IPS system, the most efficient agencies and those that care for the most difficult cases, are hit hardest by the reduction in reimbursement. Thus the Act does provide some relief for agencies in the worst predicament. Finally, it is important to recognize that the Home Health Access Preservation Act represents an interim resolution to our most pressing concerns. The implementation of a prospective payment system as directed by Congress represents the preferred solution. Thus, the bill requires the Secretary to provide regular quarterly updates to Congress on progress toward the development of the prospective payment system for home health care. But for now, Congress must pass legislation to ensure that home care remains an option for Medicare beneficiaries. We also must pledge to work with the Health Care Financing Administration and the home health industry to replace the interim payment system with a permanent system which better meets the needs of patients and is fair to health care providers. This Congress struggles with many challenges, but I doubt that there are many that are of greater significance than home health care. Access to home care affects a significant number of persons, has a serious influence on their mental and physical health, and its financial impact is measured in billions of dollars. We must act. We must act quickly to curtail the negative consequences of the payment system as it exists today.

Mr. JEFFORDS

Mr. JEFFORDS. Mr. President, 1998 is an important year for Vermont and the nation as it marks the 100th anniversary of the death of a great statesman, Senator Justin S. Morrill. Senator Morrill was a remarkable man; his authorship of the Land-Grant College Act gave, and continues to give, millions of Americans the opportunity to pursue higher education. To recognize this accomplishment, the Stratford Historical Society is holding a symposium on July 16 and 17, 1998 to pay homage to Senator Morrill and his legacy. Senator Morrill was one the most influential politicians in the mid- nineteenth century. During his 43 years in Congress, he introduced many innovative bills and worked to improve the lives of millions of Americans through higher education. The Land-Grant College Act provided public lands for agricultural colleges and, in turn, set the standard for American public universities. In addition to these accomplishments, Senator Morrill was also instrumental in the creation of the Washington Monument and the Library of Congress. In fact, on November 4, 1997, I was honored to attend a ceremony at the Library of Congress to unveil a plaque in the Great Hall of the Jefferson Building honoring Senator Morrill. The plaque was presented to the Library on behalf of the people of Vermont by the Vermont Center for the Book, on the occasion of the 100th anniversary of the Jefferson Building. The plaque honors the vital role that Senator Morrill played in making the Jefferson Building a reality. Mr. President, Justin S. Morrill was a dedicated statesman who spent his life helping others. He revolutionized education and, as poet Robert Frost once noted, ``For me there is no greater name in American education than that of Senator Justin Smith Morrill.'' Such an amazing man deserves recognition and, on this 100th anniversary of his death, I pay tribute to him and his accomplishments.

Mr. JEFFORDS

Mr. JEFFORDS. Yes, you may have it.

Mr. JEFFORDS. This amendment contains items that have been agreed to on both sides, and I ask for its immediate adoption.

Mr. JEFFORDS. Mr. President, I move to reconsider the vote by which the amendment was rejected.

Mr. JEFFORDS. Mr. President, I rise in strong opposition to the Harkin amendment. It sounds nice but it really doesn't do what was anticipated. It saves maybe $42 a year for the students; that is, if the program doesn't go belly up. It undoes a very careful balance between the share of the risk that the student takes, that the guaranty agencies take, and that the Federal Government takes. It unbalances it. It would put about 22 guaranty agencies out of business. The present system, which is the FFEL system, is working very well. The direct lending is helped with competition. The last thing we want to do is put out the system which takes care of 80 percent of the colleges and 66 percent of all loans. It is a dangerous amendment. And I strongly oppose it.

Mr. JEFFORDS. I must oppose the amendment offered by my colleague from New Mexico. He has done a wonderful job in assisting us in taking a serious look at the problems we have with respect to teachers and whether or not they have a major in the subject which they will be teaching. The problem with this amendment is that it mandates to the States that they must do something. The bill itself provides incentives for them to make sure that the people wanting to be teachers have studied the things which they will teach. We do it by enticement and through assistance with loan programs--with programs--whereas this amendment would order it done. It is a mandate, and I think it is inappropriate and that it would be counterproductive.

Mr. JEFFORDS. Mr. President, I will be very brief. What we are faced with here is a bill that says these are ideas we ought to study, but we ought to have them studied not by an agency that is dedicated to killing the program, so we give it to the Department of Treasury. We say here is an idea; study it, and then make recommendations, and then we can maybe go to a pilot if it looks good. You don't give it to an agency who is dedicated to doing the program in unless you obviously want to kill the program. And that is obviously the design here. I yield the remainder of my time.

Mr. JEFFORDS. I yield the Senator from Indiana such time as he may require.

Mr. JEFFORDS. Mr. President, I yield myself such time as I may consume. Mr. President, I rise in strong opposition to the amendment being offered by my colleague Senator Kennedy. While I share his interest in exploring mechanisms for improving the delivery of student loans, as chairman of the Labor Committee, I strongly oppose his effort to provide the Department of Education--whose desire to disadvantage the FFEL program has been aptly demonstrated--with unbridled authority to conduct an experiment on the FFEL program. The impetus for this concept arose out of the lengthy deliberations we have had over the past eighteen months about setting the appropriate interest rate for students and lenders. In 1993, when the Student Loan Reform Act was being drafted, its authors--including Senator Kennedy-- anticipated that the Federal government would shift entirely from the FFEL program to the Federal Direct Loan program. A transition provision was included in the law which changed the way that student loan interest rates were to be calculated effective July 1, 1998. This change was primarily intended to reflect the budget scoring needs of the Direct Lending program. The consequences for student borrowers in the FFEL program, however, would have been dramatic. There is general agreement that, if the interest rate that was set for July 1, 1998 and which was delayed until October 1, 1998 is allowed to go into effect, it will become unattractive for lenders to participate in the FFEL program. S. 1882, as reported from the committee, confronts the challenge of trying to provide students with the lowest viable interest rate on their student loans while ensuring sufficient lender participation to preserve open and full access to student loans. After nearly a year of consultation with students, lenders, representatives of the higher education community, the administration and financial services experts, the committee put forward a compromise interest rate package. This package sharply reduced lender yield by 30 basis points while allowing students and their families to enjoy the lowest interest rates in nearly twenty years. The process of developing this package was long and difficult and the stakes were very high. While by no means perfect, the bipartisan compromise meets the twin challenges of low rates for students and continued stability in the FFEL program. As I wrestled with my desire to balance the twin objectives of reducing the interest rate paid by students and preserving access to loans under the FFEL program, I encountered several budget analysts who were interested in using market-based mechanisms to establish student loan interest rates. It became clear to me, however, that market-based mechanisms, while attractive a first blush, quickly reveal themselves to be far more complicated to design and implement than is ever fully appreciated. These analysts, who often focus only upon economic considerations, often fail to recognize that student loan programs are designed primarily to offer a social benefit--that is, to offer loans, at reasonable rates, to students without respect to credit history, educational program, loan size, geographic location, or potential as a consumer of future credit products. Market-based mechanisms, if they are to be implemented, must be carefully designed to ensure that all students continue to have equal access to student loans without regard to any particular characteristics of the borrower or their program of education. Further, any changes to the delivery system for the FFEL program, must strive to preserve the high level of service that students and institutions of higher education currently enjoy. Under an auction model, schools and borrowers may be forced to deal with a different lender and servicer each year. Regional lenders in small states may lose the ability to participate in the program. Students may lose the ability to select the lender of their choice. And equally important, particularly in light of the collapse last year of the Department's loan consolidation program, students may find themselves forced to make payments to myriad lenders each of whom has different practices and procedures. An auction, improperly designed, could add new and unintended layers of complexity to the program. As a result of these concerns, as well as concerns about the ability of the Department of Education to administer an auction model, the American Association of Medical Colleges and others have publicly stated their deep reservations about moving toward a market-based model. These issues may be resolvable but I cannot support providing the Department with the authority to experiment on the FFEL program until they have been studied and addressed to my satisfaction and the satisfaction of my colleagues on the Senate Labor Committee. In an effort to answer some of these questions, our bill directs the Secretary of the Treasury to conduct a study of the feasibility of employing market-based mechanisms. After consultation with students, lenders, and institutions of higher education, the Secretary of Treasury is required to analyze the potential impact of these mechanisms on the delivery of student aid, the implications for students and institutions of higher education with regard to access to student loan capital, and provide a plan for structuring and implementing a mechanism is a manner that ensures the cost effective availability of student loans for students and their families. This report shall be provided no later than September 30, 1999. It is my strong belief that any pilots, if appropriate, should only be developed after careful study and full Congressional participation. In this spirit, S. 1882 contains a provision directing the Secretary of Treasury to conduct a thorough study and report to Congress on the feasibility of designating and implementing market-based mechanisms for setting student loan interest rates. I look forward to receiving this report and working with the Congressional Budget Office, my colleagues in the Senate, and all of the participants in the FFEL and Direct Lending programs to fully assess whether or not market-based mechanisms can contribute to improvements in the availability, cost, and efficiency of the student loan programs. In closing, I want to make one very important additional point. From all of this talk, one might think that there is a crisis within the FFEL program which we are trying to fix. The FFEL program continues to be the program of choice of the vast majority of colleges and universities. As a result, the higher education community has deep misgivings about the Kennedy amendment because it is concerned that efforts by the Department to conduct experiments upon the FFEL program will disrupt the benefits and services that students and institutions currently enjoy. For all of these reasons, I urge my colleagues to oppose this amendment. I retain the remainder of my time.

Mr. JEFFORDS. Mr. President, I ask for the yeas and nays.

Mr. JEFFORDS. No, it did not. Mr. President, I ask unanimous consent that it be in order to ask for the yeas and nays on the three amendments with one show of seconds.

Mr. JEFFORDS. Mr. President, I ask unanimous consent that there be 2 minutes, equally divided, of debate between the votes for an explanation of the amendments.

Mr. JEFFORDS. I believe we are reaching conclusion on this amendment. It is my intention to make a few comments and then I believe Senator Harkin will close in a few minutes. In the interim, let me first make a very few comments. We are comparing apples and oranges here and you can make the apples look bad if you want to because you can't compare the oranges. The ``oranges'' are the direct lending program. It is a great one to cover things up. What you do when you lend out the money is create an accounts receivable on your ledger sheet. It doesn't show up anywhere regarding who doesn't pay back; it just shows up who does pay back. So it is very hard to trace where the losses are. On the other hand, the private sector one is a balanced one, with the student paying a 1 percent insurance fee which helps take care of default. The lenders absorb 2 percent of the cost of defaults, which helps, and the guaranty agencies absorb 5 percent, and the Federal government absorbs the remainder, which balances out and provides the money to pay for the default. So you can't really compare the two programs. You can make this one look bad because you don't know what the other program has done. There is no way of telling. Mr. President, I ask unanimous consent that following the remarks of Senator Harkin, the Harkin amendment be set aside, that Senator Kennedy be recognized to offer his amendment, that there be 30 minutes equally divided on the Kennedy amendment, and that no second-degree amendments be in order. I further ask that upon the conclusion of debate on the Kennedy amendment, votes occur first on the Kennedy amendment, and then on the Bingaman amendment, and finally on the Harkin amendment, and that there be no second-degree amendments to any of the amendments.

Mr. JEFFORDS. So for the information of all Senators, Mr. President, we expect three votes to occur at about 9:45 or 10 o'clock, first on the Kennedy amendment, then the Bingaman amendment, and then on the Harkin amendment.

Mr. JEFFORDS. Mr. President, I rise in strong opposition to the amendment put forward by my colleague, Senator Harkin. I think what is really intended here is an effort to try to undermine the effectiveness of the FFEL Program. I know my good friend from Iowa is a fan of direct lending. I know the same is true of my colleague from Massachusetts. And any way that they can try to undermine the FFEL Program and increase the capacity of the direct loans to somehow supplant it, is an effort which I can understand. I have been involved in this a long time. I was involved in creating the commission that ended up recommending direct lending. We have tried very hard to make sure these programs operate on a basis of fairness and comparability. So far, that has worked well. This bill provides nearly $1 billion each year in new benefits. Many of these benefits were paid for by offsets found within the guaranteed student loan program. Pell grants--S. 1882 raises the maximum Pell grant to historically high levels and authorizes $85.6 billion in Pell grants over the next 5 years. Other student assistance--S. 1882 authorizes more than $15 billion over the next 5 years for work-study grants, TRIO Programs, SEOG, childcare grants for low-income students and other important programs. Loan forgiveness for child care providers--S. 1882 authorizes more than $50 million over the next 5 years to provide loan forgiveness to low-income individuals who pursue careers as child care providers. Loan forgiveness for teachers--S. 1882 authorizes more than $615 million over the next 10 years to provide loan forgiveness to teachers who pursue teaching careers in private or public secondary or elementary schools that serve low-income families. Extended repayment options--S. 1882 permits, at a cost of $290 million over 5 years, borrowers in the FFEL program with debt levels equal to or greater than $30,000 to be offered extended and graduated repayment terms similar to those available in direct lending. Student loan interest rate--And finally, and without doubt the most important benefit we are offering to students, is the low interest rate. S. 1882 preserves two vital and healthy loan programs while providing students with the lowest interest rates they have enjoyed in nearly 20 years. By some estimates, this interest rate will provide students with a new benefit (in reduced interest costs) of nearly $11 billion. These examples speak for themselves and they reflect the strong commitment I share with my colleagues to encouraging greater participation in higher education. The debate in which we are now engaged does not reflect upon one's commitment to student benefits. S. 1882 already provides nearly $1 billion in new student benefits each year. The issue which we must now confront is whether we are truly committed to preserving the stability of two student loan programs. The Harkin amendment, I believe unintentionally, would destroy the hub of the FFEL program by putting more than twenty-two guaranty agencies, including the Vermont Student Assistance Corporation, out of business--out of business. I want to reiterate this point. In order to provide some students with a maximum of a $42 per year benefit, this amendment undermines the guaranty agency financing model and threatens the continued viability of the FFEL program both now and in the future. The choice is quite clear--a vote for the amendment offered by Senator Harkin is a vote to destabilize the FFEL program. A vote against the amendment offered by Senator Harkin is a vote to preserve the many benefits that the FFEL program so successfully offers to students and their families. I strongly urge my colleagues to oppose this amendment. I point out that the $172 that was mentioned is over 4 years. It doesn't sound quite as much when you talk about 4 years as it does in 1 year. That is a few six-packs of beer a year. It is significant, perhaps a single text book, but certainly not something that is going to make a huge difference to any student. I point out, this Federal fund and the insurance premium were created to try to take care of student loan defaults, to take care of the times when student's default on their loans, or loans are discharged due to death or disability. Mr. President, 43 percent of the total cost of the FFEL Program are student loan defaults. This insurance premium helps take care of those defaults. I would like to address for a moment the student and family benefits that are provided in this bill. S. 1882 reflects a strong bipartisan-- in fact, unanimous commitment of members of the Senate Labor Committee--to craft a bill which strengthens and expands the access to higher education. We have built up a dual system of competition perhaps. But we have two student loan systems that are more in balance now, and this bill balances those two systems again. This amendment would attempt to unbalance it, to again favor the direct lending program by taking a benefit away from one program and giving it to the other, and along the way, perhaps putting many of the present guaranty agencies that provide assistance to our college students out of business. So I urge Senators to take a look at what this amendment really does. The minimal gain, $42 a year, which might possibly occur, is no balance to the risk of putting this whole program into a position where it could fail, at a cost of billions to students and the Federal Government.

Mr. JEFFORDS. I point out, this will just take a very few minutes.

Mr. JEFFORDS. I ask unanimous consent the Bingaman amendment be temporarily set aside. I further ask unanimous consent that Senator Domenici be recognized to speak for up to 10 minutes, and upon the conclusion of his remarks, that Senator Warner be recognized, and following that, we take up the amendment of Senator Harkin.

Mr. JEFFORDS. It is one I don't think will take any time.

Mr. JEFFORDS. I reluctantly rise in opposition to this amendment. I do so reluctantly because the Senator from New Mexico and certainly the Senator from Mississippi have been very active in trying to accomplish the goals which are intended by this amendment. The bill itself already, with the assistance of the Senator from New Mexico--in many cases his own language--has provided incentives and has carefully outlined programs to reward the States for accomplishing the role of making sure that the teachers, the new teachers, have a major in the area that they intend to teach. So I applaud him for those, but I just think it goes too far, and I think it is counterproductive if you order the States to do something, which I agree they should do, but I think it will be counterproductive for the purposes of getting States to understand why they should and to do it not because they are told to but because they want to. On the ``want to'' side, also, States are rewarded when they do so by grants and funding, and those that do not will not be eligible for some of the funds that would be eligible to those that do. So there are incentives built in already to accomplish the goal. This provision just goes too far and will result not in improving teacher preparation programs but will instead provide little or no incentive for States to reform teacher preparation or for schools of arts and sciences to work with their schools of education. Mandating at the Federal level that States or partnerships require academic majors for prospective teachers in order to be eligible for title II funds is counterproductive to the goals of that title. Title II requires that schools of arts and sciences work with schools of education to improve and expand the academic rigor of these programs. By excluding these States and partnerships from competing for title II money, we are discouraging change in the very States and schools that need it the most. About 20 States do not currently require students to have majors in academic content areas, and 30 do. So we should not exclude those that are not presently doing it from getting funds to help them do it. In other words, those of us who oppose it believe that the carrot is much more effective in this area than the stick. Title II will demand much of these grantees that receive the funds. Grantees will be required to show that they have increased the number of courses taught by teachers with academic majors in a particular field of study or they will lose their grants. It is important to note that the amendment would deny States or institutions other Federal funds provided under this act, excluding title IV assistance. This, too, is of concern to me. Requiring a major is not an issue that the Federal Government should be mandating. It is an issue that has historically been decided by States and institutions of higher learning. And while we encourage it in title II, it is not appropriate for the Federal Government to mandate it, as a prerequisite for participation in the title II grant program. Finally, many States are moving towards requiring majors and increasing the academic content knowledge of prospective teachers. It does not seem at all sensible to deny funds to the folks who are now moving in the right direction. This is a very, very critical area, and this is an important amendment, and it should be carefully reviewed. It has some support, but I believe the bill is well balanced as it presently is written, that this amendment will be counterproductive of the goals of the bill, and therefore I must reluctantly oppose the amendment.

Mr. JEFFORDS. I ask unanimous consent that Senator Collins be recognized to speak on the bill for up to 15 minutes, and that following her remarks, Senator DeWine be recognized to speak on the bill for up to 15 minutes, and that following their remarks, Senator Bingaman be recognized to offer his amendment.

Mr. JEFFORDS

Mr. JEFFORDS. Mr. President, I ask unanimous consent that the Subcommittee on National Parks, Historic Preservation and Recreation of the Committee on Energy and Natural Resources be granted permission to meet during the session of the Senate on Thursday, July 9, for purposes of conducting a subcommittee hearing which is scheduled to begin at 2:00 p.m. The purpose of this hearing is to receive testimony on S. 1333, a bill to amend the Land and Water Conservation Fund Act of 1965 to allow national park units that cannot charge an entrance fee or admission fee to retain other fees and charges; S. 2129, a bill to eliminate restrictions on the acquisition of certain land contiguous to Hawaii Volcanoes National Park; S. 2232, a bill to establish the Little Rock Central High School National Historic Site in the State of Arkansas; and S. 2106 and H.R. 2283, bills to expand the boundaries of Arches National Park, Utah, to include portions of certain drainages that are under the jurisdiction of the Bureau of Land Management, and to include a portion of Fish Seep Draw owned by the State of Utah, and for other purposes.

Mr. JEFFORDS. Mr. President, I ask unanimous consent that the Committee on Armed Services be authorized to meet on Thursday, July 9, 1998, at 10:00 a.m. in open session, to receive testimony on U.S. Export Control and Nonproliferation Policy and the role and responsibility of the Department of Defense.

Mr. JEFFORDS. Mr. President, I ask unanimous consent that the full Committee on Environment and Public Works be granted permission to conduct a hearing Thursday, July 9, 9:00 a.m., Hearing Room (SD-406), on S. 1222, the Estuary Habitat Restoration Partnership Act; S. 1321, the National Estuary Conservation Act; and H.R. 2207, the Coastal Pollution Reduction Act.

Mr. JEFFORDS. Mr. President, the Finance Committee requests unanimous consent to conduct a hearing on Thursday, July 9, 1998 beginning at 9:30 a.m. in room 215 Dirksen.