Tom Petri

Mr. PETRI

Mr. PETRI. Mr. Speaker, I salute the Chairman's leadership in this matter. Mr. Speaker, the true social safety net of this country is not made up of speeches delivered in this hall or even legislation passed in this hall. The true social safety net of this country is the productive capacity of the American people and the American economy. Passage of this legislation will enhance that productivity that will improve, thereby, the social safety net and the well-being of all Americans. I would join my colleagues in supporting this legislation that is backed by the National Conference of State Legislatures, the National Governors Association, the National League of Cities, the U.S. Conference of Mayors, the U.S. Chamber of Commerce, the AFL-CIO, the American Public Transit Association and the Representatives of America's Motorists, the AAA, the Senate of the United States by an 88- to-5 vote, and the President of the United States, who suggested the offsets that some of my colleagues deplore. But it has his support. It should from my colleagues. It is a good bill.

Mr. PETRI

Mr. PETRI. Mr. Speaker, I ask unanimous consent that on Wednesday, June 3, 1998, the Speaker be authorized to entertain motions to suspend the rules and pass the following: H.R. 2604--Religious Liberty and Charitable Donation Protection Act of 1997; H.R. 3504--John F. Kennedy Center for the Performing Arts Authorization Act; H.R. 3808--Designating the Carl D. Pursell U.S. Post Office; H.R. 3630--Designating the Steven Schiff Post Office; H.R. 2798--Designating the Nancy B. Jefferson Post Office; H.R. 2799--Designating the Reverend Milton R. Brunson Post Office Building.

Mr. PETRI

Mr. PETRI. Mr. Speaker, I yield myself such time as I may consume. Let me be very brief, and perhaps those speakers will not be back by the time I finish and we can wrap it up with concluding remarks. Mr. Speaker, I want to report that the bipartisan leadership of our committee, the gentleman from Wisconsin (Mr. Oberstar) and the gentleman from West Virginia (Mr. Rahall), as well as myself and the gentleman from Pennsylvania (Mr. Shuster), our chairman, have been working hard in a number of conference meetings, not of the full conference, but of the leadership of the full committee in the House and the other body. As the dean of my delegation knows, conferences are a very difficult thing involving a lot of give and take, and we appreciate the advice of our colleagues as we attempt to work things out. We certainly are very aware of the concern that we all share that we are fair to the veterans of our country. The bill is close to being concluded, but not there. The amendment that has been offered, or the motion to instruct that has been offered before us is one that is helpful in that the structure of any offset has not been determined. There are negotiations going on with OMB and the other body and a variety of people to try to see if we cannot be sure that there are some improvements for our veterans in this bill if they are dealt with at all. We were under instructions to try to stick within the budget agreement, not use any offsets that could not be defended, and to minimize, to the extent we possibly can, offsets that the administration had indicated they were going to come forward with through their budget process for other programs. In that spirit, we have cut back significantly on the size of this bill. When it passed the House it was at $217 billion, it is currently being contemplated and scored at about $200 billion over 6 years, all of which would come in gas tax revenue, paid at the pump for transportation by the American motorists. The actual scoring effort should mean that we would be within that figure, but still keep the principle that new money coming in in user fee revenues be used to try to make our highways more safe, save lives and improve our Nation's competitiveness. Again, these motions can be offered to conferences. They have been offered in the past by members of my party when the roles were reversed, and we appreciate the concern that the motion represents, and it is a give and take process. We are going to do the best we can, but we are going to try to come back with a product at the end of the day that is an improvement over current law and that all Members will be proud to support. Mr. Speaker, I yield back the balance of my time.

Mr. PETRI. Mr. Speaker, I reserve the balance of my time.

Mr. PETRI. Mr. Speaker, I yield 2 minutes to our distinguished colleague, the gentleman from California (Mr. Cunningham).

Mr. PETRI. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from Arizona (Mr. Hayworth).

Mr. PETRI

Mr. PETRI. Reclaiming my time, Mr. Chairman, I thank my colleague. And in light of the interest from Senator Kennedy and others in the other body, and in light of the interest on both sides of the aisle in this body in pursuing this approach and the study that is in the bill. Mr. Chairman, I would ask unanimous consent to withdraw my amendment at this time.

Mr. PETRI. Mr. Chairman, this amendment which I am offering along with the gentleman from New Jersey (Mr. Andrews) would institute an auction process to allocate to private lenders the rights to make federally-guaranteed student loans. Under our amendment, private lenders would submit bids to the Secretary in a yearly auction somewhat similar to the auctions of Treasury securities. In this way, a market mechanism would be used to determine the payments required by banks to provide the Nation's students with loans at reasonable interest rates. The amendment would end the recurring battle between student groups and lenders over the industry on student loans, which results in the price of private sector services being set by political negotiation without regard to the actual cost of the services. The amendment also has the potential to save the American taxpayers billions of dollars through competition for this profitable business. Up to now, with the exceptions of in-school interest and the overall interest cap, the banks have always received the same interest the students paid on student loans. This bill breaks that link for the first time. Under this bill, the banks will receive one-half percent more interest than the borrowers pay, with the American taxpayers picking up the difference on every loan for as long as it is outstanding. That will be an administrative monster as well as a drain on the Treasury. Our amendment would keep the students' interest rates the same as they are in the bill. However, the banks, depending on whether winning bids were positive or negative, would either make a one-time payment for the right to make blocks of loans on those terms or would receive a one-time payment from the government to make it worth their while to make these loans. In either case, the process would be simpler and use a market-based price discovery mechanism. If the banks are right that these loans are unprofitable even under the terms provided by the bill, this process provides them an opportunity to get better terms. I personally do not believe for a minute that that would happen, however. I am convinced that the competition produced by this approach will drive down by a substantial amount the cost of these loans to the U.S. Government. I urge all my colleagues to support this amendment.

Mr. PETRI. Mr. Chairman, I offer an amendment.

Mr. PETRI. Mr. Chairman, I thank the distinguished chairman of the committee for yielding me this time. Mr. Chairman, the Higher Education Act is one of the supremely important laws which comes before this House. It has wide ramifications for our society and for our economy. I want to commend my full and my subcommittee chairmen and my colleagues on the Committee on Education and the Workforce who have worked so diligently on this reauthorization, even as I comment on one disturbing aspect of it. In the history of guaranteed student loans, what the students paid has always been what the banks received, with the exception of in- school interest on subsidized loans and interest above a capped amount, which have been paid to the banks by the government. That has been true until now. Under this bill, H.R. 6, for the first time this link will be broken. The banks will receive one-half percent more interest than the student borrowers pay, with the taxpayer paying the extra one-half point to the banks on every loan for as long as that loan is outstanding. That is an administrative monster as well as a huge cost increaser. Why are we doing this? Because the banks swear on a stack of Bibles that they will lose money if we cut them further. They will drop out of the program and students will not get loans. Mr. Chairman, I have heard that particular Chicken Little before. When I first became a member of the committee 19 years ago, the banks got 3\1/2\ percent over T-bills on these loans, and they swore then on a stack of Bibles that if we cut them, they would drop out. So we cut them to 3.1 percent. Guess what? Nobody dropped out. Since then, it has been the same story every time we bring up this act. They swear on a stack of Bibles, we cut them a little bit anyway, and nobody drops out. Does anybody see a problem here? This whole process is fundamentally flawed. We are setting prices for private parties in a political negotiation. Congress should not be setting prices. We need a market process to do that. We have that in direct lending, where all private services are procured through competitive bidding. We do not have that in guaranteed lending. That is why the gentleman from New Jersey (Mr. Andrews) and I are proposing a loan rights auction process to determine how much the banks are paid and to get rid of the continuing extra half point bank subsidy now in the bill.

Mr. PETRI. I yield to the gentleman from California.

Mr. PETRI. I yield to the gentleman from Michigan.

Mr. PETRI. I yield to the gentleman from New Jersey.

Mr. PETRI

Mr. PETRI. Mr. Chairman, I yield such time as he might consume to the gentleman from Indiana (Mr. Pease), a member of the committee.

Mr. PETRI. Mr. Chairman, I thank the gentleman for yielding this time to me, and I would just like to make a few points. The Kasich amendment, hearing some of the people describe it, sounds like a pretty good idea: Keep the money in the States where it is generated and where it can be spent most efficiently, instead of sending it out to Washington and having all sorts of red tape added and then sending it back so we do not get as much investment for our infrastructure as we pay for. Is that what the Kasich amendment does? No. Last time I checked, what was the Federal gas tax? 18.4 cents. How much does the Kasich amendment send back? 18.4 cents? No, 11 cents. What happens to the rest? Stays in Washington, at least a lot of it, and is spent on other things. So in my State, in Wisconsin, what is being said? This is saying we want to increase taxes at the State level because we will give them in Washington 11 cents, and in order to maintain the transportation investment in their infrastructure they will have to raise their gas taxes how much? 11 cents? No, 15 cents. As my colleagues know, the Governors and a lot of experts watching what is happening in our national Federal system have been pointing out that people in Washington cut back on spending and it has to be picked up at the State and local level and higher taxes at the State and local level, and then we pat ourselves on the back for supposedly cutting burdens when all we are doing is shifting it to the State and local level. The Governors have been criticized here on this floor, but I think they are elected too and are due our respect. They were out here just a few weeks ago pointing out that over the last 20 years the Federal percentage of investment in our Nation's transportation infrastructure have been gradually declining. We have been talking pretty big out here, but we have been transferring the budget responsibility, the need for raising the revenue to maintain our roads and bridges in the United States, from Washington back to the State and local units of government. This would radically accelerate that, and it would basically shortchange every State in the United States by about 4 cents. Please vote ``no.''

Mr. PETRI. Mr. Chairman, I would just like to make several points. First of all, I have watched one-minutes sometimes and hear the spin people are trying to give to this Congress. Some Members are saying we are a do-nothing Congress. And then Members are stepping forward and saying we should not do something. We are trying to meet a major need of our country by passing this bill at an appropriate time, as asked by the national Governors who wanted us, if we possibly can, to get this done so that they can go forward with their construction seasons and plans this summer by May 1. If we had some assurances that the budgeteers would act in a reasonable and timely way, that is one thing. But knowing how these things work around here, they are not going to, I do not think. We do not have any assurance that we will have a budget resolution passed and ready to guide Congress by May 1 or thereby. We will be lucky, last year I think it slipped into June or July. So that means if we waited for this process, we are into September or October and Congress will be gone. This is saying we do not want to address the needs of the country. We do not want to deal with the donor State question in this Congress. That is what it is saying. They want to be a do-nothing Congress, not a do-something Congress. I think that is just plain wrong. I have some suggestions for our budget friends as they say where we can find this money. We are giving up $9 billion, writing it off the debt of the United States. No scoring for that. We are lowered, by the budget resolution, the caps, by about $9 billion below what we are actually spending. That mistake could be corrected. That is not really an increase in spending, when we just continue in constant levels, yet they score us with cuts. We are giving up $14 billion of interest over the life of this bill. That is not being scored either.

Mr. PETRI. Mr. Chairman, this is also worth pointing out, that this was an open process, with 4 full days of hearing, 170 Members of Congress testifying in public, supported by hundreds of local mayors and officials from across the United States, pointing out the merits of these particular projects.

Mr. PETRI. Mr. Chairman, I demand a recorded vote.

Mr. PETRI. Mr. Chairman, I yield back the balance of my time.

Mr. PETRI. Mr. Chairman, I am delighted to yield 1 minute to my esteemed colleague, the gentleman from New Jersey (Mr. Andrews). (Mr. ANDREWS asked and was given permission to revise and extend his remarks.)

Mr. PETRI. Mr. Chairman, I yield 1 minute to the gentleman from Iowa (Mr. Boswell).

Mr. PETRI. Mr. Chairman, I yield 1 minute to the gentleman from Pennsylvania (Mr. Fox).

Mr. PETRI. Mr. Chairman, I understand it is an authorization, but we had the senior member of the committee from my State and others in the authorization committee, appropriation committee, which would have to actually appropriate money, saying that this was taking away from priorities that they felt were important. Now we are adding to their burden, I think. But I would be interested to see how they vote on this amendment because if they really are concerned and consistent, this would receive a ``no'' vote, not a ``yes'' vote from those gentlemen.

Mr. PETRI. I yield to the gentleman from Minnesota.

Mr. PETRI. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, I have no further requests for time. I recognize the other side is entitled to close debate on their amendment, so I just would proceed to conclude by saying that while I understand the gentleman's interest in this program, we have included funds in this bill for this program. A lot of Members have expressed concern in debate, and a lot of others who have looked at this bill, that we are already spending more than we feel is prudent. To increase spending beyond what the committee has asked for is something that I think is highly problematic. I would think that this would be an interesting test to see whether Congress would like to stay within the parameters of this bill or feels that the committee sort of undershot and we should be spending even more than we have been asked for in this bill. I think it best to plan and see that we walk before we run. We do have $42 million in this bill plus $20 billion that is eligible if State and local transit authorities feel these needs are needs that need to be addressed. We do not need to add another $100 million dollars to a bill that is already quite generous in the transportation area. Mr. Chairman, I urge a ``no'' vote.