Ted Kennedy

Mr. KENNEDY

Mr. KENNEDY. Mr. President, I see our leader leaving the floor. He was expressing his frustration about the lack of action. I join him in underlining what he has stated here. Yesterday, a number of us, including the chairman of the Joint Economic Committee, listened to Mr. Bernanke. Mr. Bernanke was before the Joint Economic Committee talking about how they had let go more than $200 billion over the period of these last weeks--$200 billion in secret transactions, without any guarantees to the American taxpayers. And here we have a proposal that the Senator from Illinois, Mr. Durbin, and Senator Dodd and others are involved with in the Banking Committee, trying to do something about the fact that homes are being foreclosed while we are here on the floor of the Senate. What is it about the other side that they are quite prepared to see hundreds of billions of dollars flow out of the Treasury, and when you stand up and say: Can we not this afternoon help stop some of these foreclosures of homes of working-class people, they say: No go, no way, we are not going to let you take action, but we are fine with the hundreds of billions of dollars that have flowed out of the Treasury in the last several days. What possible justification is there for that? Finally, when I asked the Federal Reserve--I said: Well, we have the immediate crisis, but we are also going to have the crisis in the States. States have two options: they can either raise their taxes or cut services. What are they going to cut? Medicaid is first. They are the poorest of the poor. When we ask the leader of the Federal Reserve, the architect--because he is the man in charge--whether he believes we ought to reach out and help those families, he said he did not have a position on that and that is a position that will have to be taken up by the Congress of the United States. Why doesn't he tell that to the Republican leaders? Why? Here you are trying to take some kind of a position, and this is the old Chicago movie that I remember so well where they talk about ``Give us the old razzle-dazzle. I will razzle- dazzle me, too.'' We are finding out that the American homeowners, who are hard pressed, are being given the old razzle-dazzle. I applaud the determination and resolution the leader has shown on this issue. Real people are hurting. We are here this afternoon waiting to take some action, ready to move ahead on a proposal that has broad support, and we find out the emptiness and vacuousness of the Republican response.

Mr. KENNEDY. I will yield.

Mr. KENNEDY. Well, I have been aware of it because we have listened to our good leaders, including yourself, Senator Durbin, Senator Schumer, and Senator Dodd, talking about between 8,000 and 12,000. I had a chance to be out in Youngstown, OH, recently. Five-thousand homes are empty there, and it is increasing every single day just in that one community. That is being replicated in my State. People are saying: Where is the action? Where is the leadership? When are you going to do something on this issue? We are interested in getting something done. Mr. Bernanke was asked, after he became Chairman of the Federal Reserve: How are things going in terms of our economy? ``Fine,'' he said. He never exercised the bully pulpit to stop the explosiveness that is taking place in the housing market and put so many homeowners at risk. This is as bad as Katrina and as bad as the Iraq war. We have a similar response from the administration, and that is a failure of leadership and a failure of action. The American people ought to understand that.

Mr. KENNEDY. Well, it is difficult to believe, Mr. President. We had our moment just last week in which those of us who were there in the Rotunda listened to our leader, who spoke so well, so movingly, as well as the other leaders, both Republicans and Democrats, to honor the anniversary of the war. Now, in the last few days, we have another moment of special significance, and that is the 4,000 soldiers--just with regard to Iraq--who have been lost and 500 more in terms of Afghanistan. I was very grateful to the Senator and to our other colleagues--and I am sure on the other side as well--who thought it would be useful to memorialize in the Congressional Record the names of these extraordinary men and women, listing their names, hometowns, their ranks, and their service, and that we could include that in the Record at this time. We are trying to do it at an appropriate time because we have been reminded about the loss of the 4,000--not as an add-on to some other kind of action here but to give respect and dignity and honor to these individuals and do so by having a rollcall vote to send a special message to their families and friends in their communities that we honor their service. Why is it that we cannot get an agreement on that? The good Senator--I will not insult his intelligence. I read the resolution, and it may be 8 lines long. It is honoring these extraordinary men and women and in tribute to their valor. Why is it that we cannot have a time when we could bring the membership together to honor those names? What is the possible problem? Where is the Republican leader? Can he explain to the American people why we cannot have that? Usually, if they are going to object, at least they indicate why. Why don't they take the floor? Why can't they give an explanation to the American people? Look at these pages. On each one of these pages is 50 names. Look at these pages. There are 50 names on each and every one of them with their home addresses. We ought to be able to take a few moments for those who want to speak to be able to express themselves and pass this resolution and include it in the Record at this time, where we have paused as a Nation out of respect for the loss of some 4,000 Americans. I thank the majority leader for all he has done. Since I have the floor, I will just take a few moments here, obviously, before the Senator from Illinois, whose amendment is pending. I will withhold at any time he thinks he can get action. Mr. President, this is the resolution we will be offering. It honors the sacrifice of the members of the Armed Forces who were killed in Iraq and Afghanistan: Whereas 4,009 members of the United States Armed Forces have lost their lives in support of Operation Iraqi Freedom and 487 members of the United States Armed Forces have lost their lives in support of Operation Enduring Freedom; Whereas we honor the ultimate sacrifice that these men and women made for our country; Whereas the sacrifices of the fallen are in keeping with the highest traditions of the United States Army, Navy, Marine Corps, Air Force, and Coast Guard; Whereas, as their families and loved ones have sacrificed as well, we honor them in commemorating the memory of those that lost their lives; Whereas the following 4,009 members-- It starts off listing the fallen members of the Armed Forces.

Mr. KENNEDY. Yes.

Mr. KENNEDY. Mr. President, I thank the majority leader for his leadership in making this all possible. Mr. President, the war in Iraq has deeply divided our country. But whatever our views are about the war, we know our soldiers are serving nobly under extraordinarily difficult circumstances and that far too many are making the ultimate sacrifice for our country. The war continues to impose an enormous human toll on our soldiers, their families, and their loved ones. Our men and women in uniform have served with great courage and honor for 5 years, and last week, during the recess of Congress, we reached a sad milestone--the loss of 4,000 service men and women in support of Operation Iraqi Freedom. An additional 30,000 service men and women have been wounded. We have also lost nearly 500 service men and women in support of Operation Enduring Freedom in Afghanistan. This loss of life is deeply distressing, and the impact of the wars in Iraq and Afghanistan continues to be devastating to families and communities around our Nation. We honor their service, and we pray that God's grace and mercy may ease the anguish of those they have left behind. It is fitting, therefore, that today we honor and remember the courageous men and women who gave the last full measure of their devotion to our country in these wars. From Lexington and Concord and Gettysburg, to Normandy and Iwo Jima, to Korea and Vietnam, to Iraq and Afghanistan today, these heroes are part of a long line of courageous patriots who stood their ground with uncommon valor and sacrificed for all of us. Since the terrorist attack by al-Qaida on September 11, millions of Americans have proudly and voluntarily defended our country and our Constitution by serving in our Armed Forces, our Reserves, and our National Guard. Their devotion to duty is beyond question, and their valor is proven. They volunteered to serve and help us meet the immense challenge we face. They knew the vast danger to life and limb and were well aware that at any moment they might make the ultimate sacrifice. And as of today, 4,496 have made that sacrifice in Iraq and Afghanistan. They were all patriots. They put themselves in harm's way to protect us all. And because of their dedication and sacrifice, we continue to enjoy the freedoms we cherish in our democracy. Each of these men and women has a poignant story to tell. Just as poignant are the fond memories of their loved ones here at home. I know something of that feeling. I was 12 years old when my mother became a Gold Star mother. It still seems like only yesterday when that knock on our door came in 1944, and we learned that my oldest brother, Joe, had been lost in World War II. I know there is no easy way to mend these broken hearts, no way to lift the almost unbearable burden from the families and friends of those we lost. We mourn the loss of these heroes. We honor their sacrifice and extend our deepest condolences to their families. Words cannot ease the grief of losing a loved one, but I hope the families may find some comfort in the words of Abraham Lincoln in that famous letter he sent to a bereaved mother during the Civil War. He wrote: Dear Madam, I feel how weak and fruitless must be any words of mine which should attempt to beguile you from the grief of a loss so overwhelming. But I cannot refrain from tendering to you the consolation that may be found in the thanks of the Republic they died to save. I pray that our Heavenly Father may assuage the anguish of your bereavement, and leave you only the cherished memory of the loved and the lost, and the solemn pride that must be yours to have laid so costly a sacrifice upon the altar of freedom. The consequences of the decisions we make in Congress profoundly affect our military, their families, and the communities they have left. We have an obligation to our soldiers to make sensible decisions that will not place them needlessly in harm's way. It is fitting that we now pause to recognize, remember, and honor those who have lost their lives far from home for our grateful Nation in Iraq and Afghanistan.

Mr. KENNEDY

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

Mr. KENNEDY

Mr. KENNEDY. Mr. President, Americans are facing economic challenges at every turn. They see jobs disappearing, homes being foreclosed, debts soaring, and benefits worth less and less. Now families are finding that the loans they rely on to afford the high cost of college may also be at risk. Some lenders have stopped making private student loans, and others have even temporarily stopped making loans under the Federal program. We can't allow problems in the credit market to prevent students from going to college. We have been working with the Secretary of Education to take steps to see that all Federal backstops are in place and operational in order to protect students from these problems. Today, I am introducing legislation for additional steps to protect students by reducing their reliance on loans, and by improving the existing Federal student loan programs to give them better terms and conditions. The legislation does three things. It increases grant aid for the neediest students. It expands options for students and parents under the Federal loan programs so that fewer of them will have to turn to higher cost private loans. It takes steps to shore up the reliability of the current Federal loan programs so that families will have timely and reliable access to Federal loans. Over 6 million students relied on Federal loans last year. It is essential to make sure this support is there for them when they need it. In the past 20 years, the cost of college has tripled, and more and more students are relying on student loans to afford a college education. In 1993, less than half of all graduates took out loans, but in 2004, nearly \2/3\ did so. The average U.S. student now graduates with more than $19,000 of student loan debt. As a result, they are under increasing pressure to give up lower-paying jobs and careers they may prefer, due to the burden of repaying their loan debts. Legislation was enacted last year that increased grant aid and made Federal loans cheaper for students by reducing interest rates. We also provided that no graduates should have to pay more than 15 percent of their income in monthly loan payments, and that those who enter public service will have their loans completely forgiven. But these benefits will be meaningless if students cannot obtain the loans needed to gain a degree. In recent weeks, the credit market crisis has made it more difficult for lenders to obtain capital for student loans. As a result, some lenders are leaving the student loan market and those operating outside the Federal loan program are cutting back on loans to high risk borrowers. So far, because of the attractiveness of the Federal guarantee in the Federal loan program, other lenders are stepping in to fill the gaps in that program. Since the interest rates in that program are capped, students are protected from inflated interest costs. But students who need to go beyond the Federal loan program will have a more difficult time finding lenders, and their rates will go up. Also, parents who traditionally had various options for borrowing to finance college for their children are seeing those options disappear. Some no longer have access to low-cost home equity lines of credit. Others are being turned down for additional loans as they struggle to pay their own mortgages. As I mentioned, we are already taking action to ensure that programs already in place to protect students and families from credit market disruptions are fully operational. I have urged Secretary Spellings to make it as easy as possible for colleges and families to participate in the existing loan program that allows students and parents to borrow directly from the Federal Government, without going through a bank. This Direct Loan program uses Treasury funds. It does not rely on capital from the private financial markets, so it's insulated from the market disruptions now taking place. I have also urged the Secretary to put in place a plan to activate the ``Lender-of-Last-Resort'' program, which enables the Secretary to advance capital to designated lenders and guaranty agencies, so they can help students who are having trouble finding loans through other banks. These programs are now in the law, and nearly 2,000 colleges are already signed up to use the Direct Loan Program. We're also taking steps to help students and parents who must borrow outside the Federal loan program, since they are the ones most likely to be affected by the credit market decline. Currently, however, many students and parents don't know about their Federal options. According to Department of Education estimates, between 40 and 60 percent of students who turn to high-cost private loans are not actually taking full advantage of Federal grants and loans first. We're taking steps to correct that problem in the Higher Education Reauthorization bill that's in conference now. But there is much more we can do to reduce families' reliance on high-cost private loans. The legislation I am offering today will increase access for students and families to low-cost Federal loans. It will also strengthen the backstops in the Federal program, to ensure students and families will continue to have access to Federal loans. The legislation cuts back in several ways on the number of private loans that families have to take out: It increases Pell Grant aid for the lowest income students. It increases the amount that students can borrow under the Federal loan program. It makes Federal loans for parents more attractive by enabling parents to defer payments on the loans while students are in college just as students can defer payments on their own loans. It also takes steps to shore up the Federal loan program to ensure there are no disruptions in access for students. It makes it easier for schools to use the ``Lender-of-Last-Resort'' program when students or schools have problems finding lenders. It provides an additional backstop to give lenders access to the capital they need for new loans, if the situation worsens. I will take a moment to describe each of these provisions. The best way to help students and families afford college is to increase grant aid. More aid up front means fewer loans and less debt on graduation day. That is why the Democratic Congress delivered on our promise last year to raise the Pell Grant. The maximum grant will increase to $5,400 by 2012--an increase of $1,350 over the level at which it had stagnated under the current administration. This increase in up-front aid means that students eligible for the maximum Pell grant will have to borrow $6,000 less in loans over the course of their college career. The legislation I am introducing builds on that progress, and focuses on students who need it most. Currently, over 2.6 million students-- half of all Pell Grant recipients--come from families whose income, under the Federal formula, makes them eligible for the maximum amount of Federal assistance because they are determined to be unable to contribute to their children's college bills. Still, after all grant aid, these families face an average unmet need of $5,600, which they are forced to borrow in order to pay for college. This bill brings additional assistance to these students, by increasing the maximum Pell Grant for these students by up to $750. Because Federal grant aid has not kept pace with the rising cost of college in recent decades, many students have been forced to turn to loans. The bill helps students who still need to borrow for college by guaranteeing their access to additional low-cost federal loans, rather than forcing them to turn to the more expensive private loan market. Currently, undergraduate students who are dependents of their parents can take out loans of between $3,500 and $5,500 annually, depending what year of college they're in. The total amount they can borrow is $23,000. Independent students can borrow about double that amount. Consider what this means for a middle-class family in Massachusetts struggling to send a child to college. Here is a family that makes $68,700--the median income in our State. On average, these families will spend $17,424 a year for college. Based on the federal formula, the parents are expected to contribute between $8,000 and $10,000 a year from their earnings with the rest to be obtained through grants and loans. After accounting for all federal, state, and institutional aid, this family still faces over $2,600 in unmet costs each year--on top of their expected family contribution. The estimate is conservative, because many parents don't have the $8,000-10,000 they're expected to contribute. To make up the difference, many families can take out federal parent ``PLUS'' loans at a 7.9 percent interest rate. If they don't qualify for such loans because of poor credit, their children may have to turn to higher cost private loans. The bill increases eligibility for Federal student loans in order to give students a better, lower-cost option than relying on private lenders. It allows undergraduates dependent on their parents to borrow up to $1,000 more a year. It tracks current law by allowing independent students to borrow twice that amount. It also allows students whose parents are not able to borrow under the Federal parent loan program because of poor credit to borrow an additional $2,000 per year. In addition, the bill increases the total amount that students can borrow over the course of their college career. Dependent students will be able to borrow up to $29,500. Independent students, and students whose parents don't have access to PLUS parent loans, can borrow up to $57,500. Further, the legislation makes federal parent loans more attractive. Currently, most parents have the option of borrowing low-cost federal loans--up to the cost of attendance--for their children. In the 2006- 2007 school year, 600,000 parents borrowed approximately $8 billion in PLUS loans, and the average loan was $13,600. Many parents in recent years have not taken advantage of PLUS loans, because they had other options, such as home equity lines of credit, or private loans with good terms and conditions. This year, for the first time in a decade, the number of PLUS loan borrowers declined--by about 160,000. At the same time, student and parent dependence on private loans has increased. In the 2006-2007 school year, over $17 billion in private student loans were used to finance higher education. With the credit crunch making it harder and more expensive for parents to borrow from private sources, this legislation will make it easier for parents to obtain Federal loans. Specifically, it allows parents to defer payment on those loans until their children graduate from school--just as students are able to do under their own Federal loans. This provision protects parents from having to make any payments over the next few years, and allows them to use that time to meet other financial obligations, such as getting their mortgages back on track. In addition to these provisions that significantly reduce families' need to turn to the private loan market, the legislation also takes two important steps to strengthen the backstops in the Federal loan program, to ensure that students and parents can continue to have timely, uninterrupted access to Federal loans. First, it makes it easier for students and schools to participate in the ``Lender-of-Last-Resort'' program. Current law requires designated lenders to make loans to students who are having trouble finding a Federal student loan elsewhere. But the program requires individual students to demonstrate that they can't find a loan before they can turn to a ``lender of last resort.'' If the current market worsens, more lenders may stop making Federal student loans, and this ``lender-of-last-resort'' process will become untenable. Nationally, 18 million students are enrolled in colleges and universities. We can't require each of them to demonstrate they can't find another lender before using this safety net. The legislation instead allows financial aid officers and colleges to make this determination on behalf of all their students, so that students can easily obtain a loan through a ``lender of last resort.'' Consider the difference this would make at state universities, some of which enroll more than 50,000 college and graduate students and generally rely on one or two primary lenders. The Clinton Administration enacted such a policy in 1998--the last time lenders threatened to leave the program. The legislation requires the Secretary to make clear that colleges have this option should they need it. Finally, many lenders who have announced they will not be able to make loans for this college year have had to make that decision because they cannot obtain capital for those loans through their traditional sources in the private financial markets. Many of these lenders sell the loans they originate in order to replenish their capital and make new loans. But these so-called ``secondary markets'' have begun to close because of the credit crunch. Some lenders can't find a buyer for their loans. They are stuck with the loans now on their books, and have no capital for new loans in the fall. Over the past month, this has caused some lenders to announce that they will stop making new Federal loans. This legislation provides a back-up plan for lenders who need it, in case the private credit markets are unavailable to lenders. It allows the Secretary of Education to act as a ``secondary market of last resort,'' by buying the loans that lenders are currently holding on their books and cannot sell. This will not cause students any greater complexity--under the program established by this legislation, student loans will continue to be serviced under the same terms and conditions that the borrower signed up for. The Department can contract with the same loan servicers that private banks use, and the transition will be seamless for borrowers. We hope that these additional protections for students and families will not be needed. But given the uncertainties in the overall economy and the credit markets, Congress has an obligation to shore up programs on which millions of students heavily depend. Few things are more important than ensuring that families can afford a college degree for their children, and the goal of this legislation is to make that possible. I urge my colleagues to support it. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. KENNEDY

Mr. KENNEDY. Mr. President, Americans are facing economic challenges at every turn. They see jobs disappearing, homes being foreclosed, debts soaring, and benefits worth less and less. Now families are finding that the loans they rely on to afford the high cost of college may also be at risk. Some lenders have stopped making private student loans, and others have even temporarily stopped making loans under the Federal program. We can't allow problems in the credit market to prevent students from going to college. We have been working with the Secretary of Education to take steps to see that all Federal backstops are in place and operational in order to protect students from these problems. Today, I am introducing legislation for additional steps to protect students by reducing their reliance on loans, and by improving the existing Federal student loan programs to give them better terms and conditions. The legislation does three things. It increases grant aid for the neediest students. It expands options for students and parents under the Federal loan programs so that fewer of them will have to turn to higher cost private loans. It takes steps to shore up the reliability of the current Federal loan programs so that families will have timely and reliable access to Federal loans. Over 6 million students relied on Federal loans last year. It is essential to make sure this support is there for them when they need it. In the past 20 years, the cost of college has tripled, and more and more students are relying on student loans to afford a college education. In 1993, less than half of all graduates took out loans, but in 2004, nearly \2/3\ did so. The average U.S. student now graduates with more than $19,000 of student loan debt. As a result, they are under increasing pressure to give up lower-paying jobs and careers they may prefer, due to the burden of repaying their loan debts. Legislation was enacted last year that increased grant aid and made Federal loans cheaper for students by reducing interest rates. We also provided that no graduates should have to pay more than 15 percent of their income in monthly loan payments, and that those who enter public service will have their loans completely forgiven. But these benefits will be meaningless if students cannot obtain the loans needed to gain a degree. In recent weeks, the credit market crisis has made it more difficult for lenders to obtain capital for student loans. As a result, some lenders are leaving the student loan market and those operating outside the Federal loan program are cutting back on loans to high risk borrowers. So far, because of the attractiveness of the Federal guarantee in the Federal loan program, other lenders are stepping in to fill the gaps in that program. Since the interest rates in that program are capped, students are protected from inflated interest costs. But students who need to go beyond the Federal loan program will have a more difficult time finding lenders, and their rates will go up. Also, parents who traditionally had various options for borrowing to finance college for their children are seeing those options disappear. Some no longer have access to low-cost home equity lines of credit. Others are being turned down for additional loans as they struggle to pay their own mortgages. As I mentioned, we are already taking action to ensure that programs already in place to protect students and families from credit market disruptions are fully operational. I have urged Secretary Spellings to make it as easy as possible for colleges and families to participate in the existing loan program that allows students and parents to borrow directly from the Federal Government, without going through a bank. This Direct Loan program uses Treasury funds. It does not rely on capital from the private financial markets, so it's insulated from the market disruptions now taking place. I have also urged the Secretary to put in place a plan to activate the ``Lender-of-Last-Resort'' program, which enables the Secretary to advance capital to designated lenders and guaranty agencies, so they can help students who are having trouble finding loans through other banks. These programs are now in the law, and nearly 2,000 colleges are already signed up to use the Direct Loan Program. We're also taking steps to help students and parents who must borrow outside the Federal loan program, since they are the ones most likely to be affected by the credit market decline. Currently, however, many students and parents don't know about their Federal options. According to Department of Education estimates, between 40 and 60 percent of students who turn to high-cost private loans are not actually taking full advantage of Federal grants and loans first. We're taking steps to correct that problem in the Higher Education Reauthorization bill that's in conference now. But there is much more we can do to reduce families' reliance on high-cost private loans. The legislation I am offering today will increase access for students and families to low-cost Federal loans. It will also strengthen the backstops in the Federal program, to ensure students and families will continue to have access to Federal loans. The legislation cuts back in several ways on the number of private loans that families have to take out: It increases Pell Grant aid for the lowest income students. It increases the amount that students can borrow under the Federal loan program. It makes Federal loans for parents more attractive by enabling parents to defer payments on the loans while students are in college just as students can defer payments on their own loans. It also takes steps to shore up the Federal loan program to ensure there are no disruptions in access for students. It makes it easier for schools to use the ``Lender-of-Last-Resort'' program when students or schools have problems finding lenders. It provides an additional backstop to give lenders access to the capital they need for new loans, if the situation worsens. I will take a moment to describe each of these provisions. The best way to help students and families afford college is to increase grant aid. More aid up front means fewer loans and less debt on graduation day. That is why the Democratic Congress delivered on our promise last year to raise the Pell Grant. The maximum grant will increase to $5,400 by 2012--an increase of $1,350 over the level at which it had stagnated under the current administration. This increase in up-front aid means that students eligible for the maximum Pell grant will have to borrow $6,000 less in loans over the course of their college career. The legislation I am introducing builds on that progress, and focuses on students who need it most. Currently, over 2.6 million students-- half of all Pell Grant recipients--come from families whose income, under the Federal formula, makes them eligible for the maximum amount of Federal assistance because they are determined to be unable to contribute to their children's college bills. Still, after all grant aid, these families face an average unmet need of $5,600, which they are forced to borrow in order to pay for college. This bill brings additional assistance to these students, by increasing the maximum Pell Grant for these students by up to $750. Because Federal grant aid has not kept pace with the rising cost of college in recent decades, many students have been forced to turn to loans. The bill helps students who still need to borrow for college by guaranteeing their access to additional low-cost federal loans, rather than forcing them to turn to the more expensive private loan market. Currently, undergraduate students who are dependents of their parents can take out loans of between $3,500 and $5,500 annually, depending what year of college they're in. The total amount they can borrow is $23,000. Independent students can borrow about double that amount. Consider what this means for a middle-class family in Massachusetts struggling to send a child to college. Here is a family that makes $68,700--the median income in our State. On average, these families will spend $17,424 a year for college. Based on the federal formula, the parents are expected to contribute between $8,000 and $10,000 a year from their earnings with the rest to be obtained through grants and loans. After accounting for all federal, state, and institutional aid, this family still faces over $2,600 in unmet costs each year--on top of their expected family contribution. The estimate is conservative, because many parents don't have the $8,000-10,000 they're expected to contribute. To make up the difference, many families can take out federal parent ``PLUS'' loans at a 7.9 percent interest rate. If they don't qualify for such loans because of poor credit, their children may have to turn to higher cost private loans. The bill increases eligibility for Federal student loans in order to give students a better, lower-cost option than relying on private lenders. It allows undergraduates dependent on their parents to borrow up to $1,000 more a year. It tracks current law by allowing independent students to borrow twice that amount. It also allows students whose parents are not able to borrow under the Federal parent loan program because of poor credit to borrow an additional $2,000 per year. In addition, the bill increases the total amount that students can borrow over the course of their college career. Dependent students will be able to borrow up to $29,500. Independent students, and students whose parents don't have access to PLUS parent loans, can borrow up to $57,500. Further, the legislation makes federal parent loans more attractive. Currently, most parents have the option of borrowing low-cost federal loans--up to the cost of attendance--for their children. In the 2006- 2007 school year, 600,000 parents borrowed approximately $8 billion in PLUS loans, and the average loan was $13,600. Many parents in recent years have not taken advantage of PLUS loans, because they had other options, such as home equity lines of credit, or private loans with good terms and conditions. This year, for the first time in a decade, the number of PLUS loan borrowers declined--by about 160,000. At the same time, student and parent dependence on private loans has increased. In the 2006-2007 school year, over $17 billion in private student loans were used to finance higher education. With the credit crunch making it harder and more expensive for parents to borrow from private sources, this legislation will make it easier for parents to obtain Federal loans. Specifically, it allows parents to defer payment on those loans until their children graduate from school--just as students are able to do under their own Federal loans. This provision protects parents from having to make any payments over the next few years, and allows them to use that time to meet other financial obligations, such as getting their mortgages back on track. In addition to these provisions that significantly reduce families' need to turn to the private loan market, the legislation also takes two important steps to strengthen the backstops in the Federal loan program, to ensure that students and parents can continue to have timely, uninterrupted access to Federal loans. First, it makes it easier for students and schools to participate in the ``Lender-of-Last-Resort'' program. Current law requires designated lenders to make loans to students who are having trouble finding a Federal student loan elsewhere. But the program requires individual students to demonstrate that they can't find a loan before they can turn to a ``lender of last resort.'' If the current market worsens, more lenders may stop making Federal student loans, and this ``lender-of-last-resort'' process will become untenable. Nationally, 18 million students are enrolled in colleges and universities. We can't require each of them to demonstrate they can't find another lender before using this safety net. The legislation instead allows financial aid officers and colleges to make this determination on behalf of all their students, so that students can easily obtain a loan through a ``lender of last resort.'' Consider the difference this would make at state universities, some of which enroll more than 50,000 college and graduate students and generally rely on one or two primary lenders. The Clinton Administration enacted such a policy in 1998--the last time lenders threatened to leave the program. The legislation requires the Secretary to make clear that colleges have this option should they need it. Finally, many lenders who have announced they will not be able to make loans for this college year have had to make that decision because they cannot obtain capital for those loans through their traditional sources in the private financial markets. Many of these lenders sell the loans they originate in order to replenish their capital and make new loans. But these so-called ``secondary markets'' have begun to close because of the credit crunch. Some lenders can't find a buyer for their loans. They are stuck with the loans now on their books, and have no capital for new loans in the fall. Over the past month, this has caused some lenders to announce that they will stop making new Federal loans. This legislation provides a back-up plan for lenders who need it, in case the private credit markets are unavailable to lenders. It allows the Secretary of Education to act as a ``secondary market of last resort,'' by buying the loans that lenders are currently holding on their books and cannot sell. This will not cause students any greater complexity--under the program established by this legislation, student loans will continue to be serviced under the same terms and conditions that the borrower signed up for. The Department can contract with the same loan servicers that private banks use, and the transition will be seamless for borrowers. We hope that these additional protections for students and families will not be needed. But given the uncertainties in the overall economy and the credit markets, Congress has an obligation to shore up programs on which millions of students heavily depend. Few things are more important than ensuring that families can afford a college degree for their children, and the goal of this legislation is to make that possible. I urge my colleagues to support it. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. KENNEDY

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

Mr. KENNEDY. Madam President, I understand we are in morning business; is that correct?

Mr. KENNEDY. Fine. I will use such time as I might use that I am entitled under that procedure.

Mr. KENNEDY. Madam President, a few minutes ago, I was over at the Joint Economic Committee, where we had Mr. Bernanke, who is the head of the Federal Reserve, talking about the economic challenges we are facing in this country and what the administration, and Federal Reserve are going to do about it. I must say, we were long in analysis in terms of how we got here but very short in terms of giving a great deal of hope to the American people as to the next steps that are going to be taken by the administration to help resolve this problem. That is, I find, enormously distressing. I think American families ought to be certainly encouraged by the efforts that are being made in this body to try to develop a housing program, led by Senator Dodd and also by Senator Shelby and a number of others. I understand the leaders are going to have some announcements later on in the day about the progress that is being made, which is, I think, a very important and significant effort. Hopefully, it will result in providing some help and assistance to families so they can remain in their homes and, hopefully, permit some of those who have been foreclosed on to regain the opportunity to return to their homes. We have seen in recent weeks a widespread breakdown in the financial markets. The crisis has had far-reaching effects on the rest of the economy, leaving 7.4 million Americans unemployed and 2 million families at risk of foreclosure. Approximately 7,000 families a day are facing that. It is true in my State of Massachusetts. It is true throughout New England and other parts of the country. We need to act quickly now to keep families in their homes. We are looking forward to our committees making a recommendation on legislation that will permit us to do so. It is time to restore confidence in our credit markets. That means cracking down on abusive practices in the mortgage industry and shining more light on the operations of investment companies such as Bear Stearns. The Federal Government stepped in with nearly $30 billion to bail out Bear Stearns. That is a lot of corporate welfare coming before any relief for the millions of families on the brink of losing their homes. Hundreds of billions of dollars in subsidized loans are being given out freely to banks and investment houses, but the administration is telling millions of Americans struggling to find work that it is too soon to give them additional unemployment benefits. That is unacceptable, and Congress needs to act. I reviewed at the meeting earlier today the general economic circumstance we find ourselves in as a result of these costs over these last years. Since the President took office, the dollar has lost a third of its value. The Federal debt has skyrocketed by nearly $4 trillion. Our debt to foreign investors has increased by $1 trillion. The stock market on average has grown by only 2.5 percent each year since 2001, far lower than the 7.5-percent annual returns it averaged since 1968, and it lost $2.7 trillion in value since last May--$2.7 trillion in value since last May. Finally, this crisis has wiped out $2.7 trillion in home values in the past year alone. Some economists believe we could lose as much as $8 trillion before the crisis is over. So I reminded Mr. Bernanke of what I hear from my constituents in Massachusetts who see their hard-earned savings being wiped out. Now we are reading in the papers that older workers are being forced to put off their retirement because of losses in the values of their home and retirement savings. So we ought to know what we can do to help respond to the staggering loss of the Nation's wealth and how working families can cope with their lost savings and wealth. That is a fair question, and I must say I didn't feel we got much of an answer during the course of the hearing this morning. Some have said we have a devalued dollar and this will increase our exports. But it is true that after the dollar has been weakening for 6 years, the value of our imports is still roughly twice that of our exports, and we are still running a huge trade deficit. Some have said the Fed is taking appropriate steps by lowering interest rates and offering discount loans, but it is true that even after an extended period of lowering interest rates, the economy is still floundering. One of the very important and significant consequences of this whole economic dilemma is its impact upon the States. States are finding enormous challenges in dealing with their economic situation, and they have two alternatives. They have two alternatives and both of them are bad and will have very adverse impacts on middle-class and working families. First, they can raise their taxes which, at a time when families are hard-pressed to make ends meet, is the wrong policy. Secondly, they can reduce or cut back on services such as Medicaid and other programs that reach out to the neediest in the community. That, obviously, has enormously adverse impacts. There are ways of helping the States. We have done it in the past. When I asked Mr. Bernanke whether he would favor this administration providing some help and assistance to the States so they don't have to reduce services for their neediest people, he said that is a decision for Congress to make. Well, I asked him. He is the head of the Federal Reserve. Where is the administration? What is their position? I know the power of the Congress on fiscal policy, but where is the administration? We want to work with the administration to try and restore our economy. When Mr. Bernanke says: Well, we are trying to develop a policy of economic growth and price stability, we are all for that. We have seen that. We saw it in the early 1960s with President Kennedy and we have seen it at other times, including in the 1990s. That is a desired goal. But just stating that as being the desire for the administration at a time when we are facing these serious economic challenges remains, I think, an inadequate answer. The idea that the Chairman of the Federal Reserve would state to the Congress that he effectively has no position and the administration has no position on fiscal policy, on providing help and assistance to the States, is mind- boggling to me--mind-boggling--a complete failure to understand the economic challenges people are facing. I asked the Chairman whether he thought we ought to have a system to effectively regulate the safety of financial products at a time when the financial community has been involved in products that are risky for consumers. We have a regulatory agency--the FDA--that tries and does a pretty good job of addressing the increasing challenge in terms of food safety. We have an FDA to try to deal with and make sure our prescription drugs are going to be safe and efficacious. It does a pretty good job. We are working to try to strengthen those agencies. We have a regulatory agency, the Consumer Product Safety Commission, to try to keep toys that are dangerous to children away from children. So we have a tradition of establishing regulations and regulatory agencies to help protect the consumer. Given the abuses we have seen with financial products in recent times, should we not have a similar agency to help protect consumers from unsafe financial products? Consumers are hard working. They spend a good deal of their time working all day and the rest of the time trying to look after their children. They spend some time with their children helping them to read and with their education, and they don't have a lot of time to go through the various complex financial statements that have become the common rather than the rare. Generally, we had what I consider to be kind of a wishy-washy answer on this one: That the Federal Reserve has some powers--it is useful to have some power--but no precision with regard to what can be done in order to protect average working families from the existing abuses that are out there. I was discouraged by these responses at a time when we have a serious economic challenge. Families in my State are working and trying to keep their homes, trying, even at this time of the year, to get sufficient resources for home heating oil. Families who may experience the joy that many have in the last week when they receive the notices from colleges in my part of the country that have accepted their children to go on to higher education and then are sobered up by the extraordinary costs and wondering whether they can afford it. Frequently, they use their house as collateral, and now they wonder whether they can afford it. They see the ever-increasing cost of gasoline, and they are struggling and wondering if they can hold onto their jobs, let alone their health insurance. Serious economic times demand leadership at the executive level and demands leadership in the Congress and demands a bipartisan response to these challenges. We do not have that at this time. I will review briefly for the Senate about where we are in terms of our economic challenges. I was asked yesterday morning--or 2 mornings ago, Monday morning--in Boston whether we were in an economic recession. I answered yes. When asked how one would describe it, Americans surveyed think the economy now is in recession; 76 percent say there is good reason why they should believe so. We have seen the response to these economic challenges. We have seen some $260 billion in subsidized loans to banks by the Federal Reserve. We don't know how the public taxpayer is being protected with these loans. We don't understand how the public interest is being protected. We have seen public loans at other times, and the most dramatic one was the automobile industry when the Congress actually was repaid for the loans. It was a successful negotiation, without which we would have seen the complete collapse of the automobile industry in this country and the loss of millions of jobs. It was carefully worked out and the public interest was protected. We don't know what those $260 billion in subsidized loans now will mean. Yet when we asked: Could we get the administration to help and assist us with the extension of the unemployment benefits, the answer was no. No. No to $10 billion to help individuals who work and who want to work, who have a history of working and are losing their jobs because of the economic downturn and need to have that help and assistance in the interim before they get the next job. Would the administration help them? The answer was no. Yet there is $260 billion in loans to the banks. This isn't right. This isn't fairness. This isn't being responsive to the needs of families and working people in this country. This chart gives an idea about what is happening. While wages have been stagnating, consumers have been facing increasing costs, including the 84-percent increase in gasoline. We have seen health insurance costs continue to rise by 44 percent, college tuition by 47 percent, and wages effectively stagnant over this period, putting enormous pressure on these families. This chart shows that millions of American families face losing their homes. The number of foreclosures were in the thousands in January of 2006, 100,000 in 2007, and 150,000 in January of 2008; it is up 124 percent from 2006. These are families who are losing their homes. This is a reflection of the loss of homes by hard-working people in this country. We have now seen the growth of a tent city, something that I think none of us ever thought would again take place in this country. All of us are mindful of the extraordinary pressures that still exist on families as a result of Hurricane Katrina and the hardships those people are facing. But by and large, we don't generally think that because people are going to lose their houses to foreclosure, they are going to be pushed outside. The growth of this tent city has been a new phenomenon in the landscape of America. This shows that home prices in major cities have fallen now by 11 percent in the last year alone. This chart shows what has been happening in different parts of the country, and it has generally been going down across the country. Some areas are suffering a great deal more than others. The losses in California, Las Vegas, and some of the States in the South have gone down a good deal more than others, but nonetheless it has been across the board, and it has been serious. This chart demonstrates that the economy is shedding more and more jobs. In January of 2008, 22,000 jobs were lost. In February of 2008, 63,000 jobs, meaning 85,000 jobs were cut in just the past 2 months. We are going to get more jobs numbers on Friday of this week, and most believe we will see this continued trend of individuals losing their jobs. How many more indicators do we need? When you find out you are losing your home, you are unable to keep your job, the costs of all kinds of essentials which you need to have any quality of life are going through the roof--not to recognize we have some important responsibilities to our fellow citizens. This chart shows 7.4 million Americans are competing for 4 million jobs. These are the numbers of Americans who are unemployed. These are the job openings that are out there at the present time. So we have many more unemployed than there are job openings. If that is the case-- and these people want to work, they are glad to work, we want to give them an opportunity to work. Historically, we have said to those people: We are going to give you some unemployment compensation to carry you for a while until we get this number of job openings up, a restoration of our economy, and then you will be able to get the job. But these same people who have worked hard to try to provide for their family, they need to be eligible for some unemployment compensation. The trust fund itself is in surplus at this time. Workers have paid into the fund--and if they haven't paid in, they are unable to gain resources, generally speaking. So this is the reason we have been struggling to get some help and assistance in unemployment. This is a rather ominous chart because this says economists predict unemployment will skyrocket next year. This says in 2007 the unemployment rate was 4.5 percent, 4.8 percent in 2008, and in 2009 it will be 6.5 percent. The lag time, historically, has reflected itself in the increasing numbers of unemployed. In 2009, we are going to see increasing unemployment across this country. That is the phenomenon. If we know unemployment will continue to increase--and that was the testimony before the Joint Economic Committee--why aren't we preparing ourselves to reach out and make sure this kind of pressure that is on these families is reduced or at least accommodated to some extent? We know what is going to happen. This administration missed the boat, so to speak, in understanding where we are going in terms of the economy. They should have known, but they didn't know. For some of us who look at the record of the administration, whether it is on Katrina or Iraq, we can understand how they have missed the boat on a number of different issues. We are finding out they certainly missed the economic boat. Millions of Americans could lose their health insurance in a recession. We are seeing job losses and workers' declining bargaining power and benefit cuts. In a mild or moderate recession, 4.2 million Americans will lose their health insurance. We know when that happens, when they lose it, effectively the waiting room becomes the emergency room; that becomes their primary care. The average cost is $423 for a visit to the emergency room. When families lose health insurance, they go to the emergency room. And who picks up the tab if they don't have the money? It is the taxpayers who pay for it one way or the other. This will mean additional pressure on local taxpayers who are going to be increasingly pressured themselves because they will lose benefits and they are going to have to pay more in taxes, and the spiral continues. Yet we have very little willingness from the administration to assist States and local communities to help permit these families to retain their health insurance, which they could do, and which we have done at other times. This chart is a sad indicator. This says food stamp use nears record levels as the crisis squeezes workers. We have 28 million Americans who are projected to receive food stamps in 2009--record numbers in the history of this country, with families needing to use food stamps because they are desperate. This program was meant to be an emergency program, and it is. But we are finding more and more Americans dependent upon it. Just visit the food banks as I have. We have such superb food banks in Boston and in Massachusetts which have been enormously effective. They are well run, and they involve the community. We are finding out about the difficulty they have in getting good food and also the kind of pressures they are seeing every single day at the food banks. This is what is happening. This puts millions more into poverty by 2011. The number of people in poverty has grown during this administration by nearly 5 million people, and over 1 million children have gone into poverty. This is going to get even worse in a recession. These numbers are growing. I listened this morning with a good deal of interest about the increasing number of school dropouts. Colin Powell was on most of the morning programs talking about it. It is directly attributable to the increased poverty. When you get increased poverty in communities, you are going to have increasing numbers of children who will drop out, increasing amounts of gangs, and increasing amounts of violence, make no mistake. We have seen the complete insensitivity of the administration to providing assistance to local communities, whether it was in the COPS community policing program which was such a success or the Byrne grant programs that assist local law enforcement. The administration says: no, no, we have to cut those programs back. We are seeing increasing poverty, with all of its dangerous aspects. These are very interesting charts. This one shows 22 percent more workers are exhausting Federal unemployment benefits today than at the start of the 2001 recession. Since 1991, we have extended unemployment compensation by 13 weeks some seven times. That's seven times. In the last 20 years--listen to me now--we have not had as high of a rate of long-term unemployment at any time Congress has first extended benefits as we have at the present time. This is an extraordinary phenomenon. These are fellow citizens who have worked hard, want to work, are continuing to look for jobs. They haven't even dropped out of the job market. Yet they are being cut loose here and being denied the unemployment compensation. So what we are demonstrating is increasing insensitivity to these families. I will just take a few more moments. There are things that can be done. If we were able to get Mr. Bernanke to indicate that he believed some economic stimulus program could be put into place, we are looking for those that have been tried, tested, and demonstrated to have been effective. You can see on this chart that for every dollar invested in food stamps, it had $1.73 of impact in boosting the economy. For unemployment, it was $1.64 of growth that you were buying for every dollar invested. For infrastructure, it is $1.59. The tax cuts the administration favors do not have as positive an impact. That is what we need. We need to have programs that will provide help and assistance for them. This chart illustrates how the costs are rising faster than the rate of inflation. So I think we know what needs to be done. We need an economic stimulus program that is targeted to middle-class and working families and will benefit them. We heard today in the Joint Economic Committee about what we have been doing for the large investment firms which get hundreds of billions of dollars, but still there is not the will or desire to try to help real families who are having a most difficult time of it. That is wrong. I don't think the American people will tolerate that. They should not. They should be assured that there are many of us who will not tolerate it and will work effectively until we develop the kind of economic program that is really going to reach out to these families and say to our fellow citizens that help is on the way. Madam President, I suggest the absence of a quorum.

Mr. KENNEDY

Mr. KENNEDY. Mr. President, I ask unanimous consent that the Committee on Commerce, Science, and Transportation be authorized to meet during the session of the Senate on Wednesday, April 2, 2008, at 2:30 p.m., in room 253 of the Russell Senate Office Building.

Mr. KENNEDY. Mr. President, I ask unanimous consent that the Committee on Environment and Public Works be authorized to meet during the session of the Senate on Wednesday, April 2, 2008, at 10 a.m. in room 406 of the Dirksen Senate Office Building to hold a hearing entitled, ``Oversight on the Listing Decision for the Polar Bear Under Endangered Species Act.''

Mr. KENNEDY. Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Wednesday, April 2, 2008, at 9:30 a.m. to hold a hearing on Iraq.

Mr. KENNEDY. Mr. President, I ask unanimous consent that the Committee on Foreign Relations be authorized to meet during the session of the Senate on Wednesday, April 2, 2008, at 2:30 p.m. to hold a hearing on Iraq.

Mr. KENNEDY. 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 Wednesday, April 2, 2008, at 11 a.m. to conduct a hearing entitled ``Nuclear Terrorism: Assessing the Threat to the Homeland.''

Mr. KENNEDY. Mr. President, I ask unanimous consent that the Senate Committee on the Judiciary be authorized to meet during the session of the Senate, to conduct a hearing entitled ``Oversight of the Department of Homeland Security'' on Wednesday, April 2, 2008, at 9:30 a.m., in room SH-216 of the Hart Senate Office Building. Witness list The Honorable Michael Chertoff, Secretary, United States Department of Homeland Security, Washington, D.C.

Mr. KENNEDY. Mr. President, I ask unanimous consent that the Readiness and Management Support Subcommittee of the Committee on Armed Services be authorized to meet during the session of the Senate on Wednesday, April 2, 2008, at 2:30 p.m., in open session to receive testimony on Department of Defense contracting in Iraq and Afghanistan.

Mr. KENNEDY. Mr. President, I ask unanimous consent that the Subcommittee on Emerging Threats and Capabilities of the Committee on Armed Services be authorized to meet during the session of the Senate on Wednesday, April 2, 2008, at 10 a.m., in open session to receive testimony on the Cooperative Threat Reduction Program; and the proliferation security initiative at the Department of Defense and Nuclear Nonproliferation Programs at the National Nuclear Security Administration in review of the Defense authorization request for fiscal year 2009 and the future years Defense program.

Mr. KENNEDY

Mr. KENNEDY. Mr. President, I welcome this opportunity to pay tribute on the occasion of his retirement to Dr. Michael David Freed of Children's Hospital Boston for his service to the hospital and the thousands of children and young adults from Massachusetts and beyond who have benefited from his care. Dr. Freed has had a long and distinguished career at the hospital and Harvard Medical School, beginning in 1970, when he arrived to complete his fellowship training. At Children's Hospital, he rose to become senior associate in cardiology in 1976 and chief of the Division of Inpatient Cardiology in 1996. Dr. Freed is a physician's physician. His commitment to providing the best possible care for children with heart disease is unwavering. He has used his breadth and depth of knowledge, his clarity of thought, his empathy, and his sense of humor to train more than 200 pediatric cardiology fellows and innumerable pediatric residents in the fundamentals of congenital heart disease. As a member of the Sub-board of Pediatric Cardiology, he ensured the highest quality of care by setting standards for board certification for young pediatric cardiologists. At Children's Hospital, Dr. Freed has chaired or served on more than two dozen committees, projects, and task forces, ranging from quality improvement and patient care to graduate medical education and governance. His contributions extend well beyond Boston. He has served on the executive committees of all three major national organizations in his field--the American Heart Association, the American Academy of Pediatrics, and the American College of Cardiology, where he currently serves on the board of trustees. He is also a member of editorial boards in the field of cardiology, and regularly has been included on lists of ``top physicians'' ranging from the book ``Best Doctors in America'' to Good Housekeeping and Boston Magazine. He is consulted by other pediatric cardiologists from around the world who seek his opinion on the care of their patients. Dr. Freed has also written extensively in the field of pediatric cardiology and cardiac surgery and is particularly recognized for his work in the newborn physiology of congenital heart disease, infective endocarditis, and valvular heart disease. He has authored more than 60 original articles, contributed more than 40 reviews, chapters, and editorials, and developed more than 25 clinical communications and instructive CD ROMs. His leadership in establishing clinical practice guidelines for early postoperative management of children in Boston undergoing open-heart surgery was a model for the development of such guidelines nationally. In addition, he has been a member of national working groups to develop guidelines on optimal care of individuals with heart disease. I commend Dr. Freed for his outstanding career and his achievements in improving the quality of care for children and young people with congenital heart disease in Boston and throughout the world, and I wish him well in retirement.

Mr. KENNEDY

Mr. KENNEDY. Madam President, let's look at what the law is and what the Alexander amendment provides. The law currently says that if there is a need to speak English on the job, fine; employers can require that. But employers cannot use English-only rules as an excuse when they want to fire minorities who are performing the job correctly. In this fact situation, those employees had performed the job correctly for 5 years. In addition, this amendment reduces the EEOC's ability to fight all forms of discrimination because it cuts the entire budget. That means race, age, religion, and disability cases will be harmed. I hope the amendment will be defeated.

Mr. KENNEDY. Madam President, I believe the pending amendment is the amendment I offered earlier; am I correct?

Mr. KENNEDY. Madam President, everyone is aware of the credit crisis and its impact on homeowners. This amendment is designed to ensure that the crisis does not impact students. The amendment ensures that Congress can act to provide low-interest loans to students who need them. It will bring stability and security to our higher education system. My amendment strengthens the Federal Student Loan Program so that secure, low-interest student loans will always be available to Main Street America, even when Wall Street is in turmoil. I urge my colleagues to support this amendment.