Jack Reed

Mr. REED

Mr. REED. Mr. President, we are 5 days into the government shutdown, but unfortunately there has been no progress in resolving this issue. I disagree with some policies championed by my colleagues on the other side of the aisle, and indeed I sometimes disagree with the President and Members of my own party on specific policy prescriptions. Case in point: raising the student loan interest rate and the so-called JOBS Act. In both cases I tried to make my best argument on the merits of the issue, and then we voted, moved on, and I am still working to try to improve both laws. I haven't given up, but I have not shut the government down because my views didn't prevail. So I say to my colleagues on the other side, the way to change laws you do not like is not to shut down the government at the expense of your fellow Americans and at the expense of our economy; it is to try to build consensus and persuade a broad swath of the American people that there is a better way of doing things and making concrete proposals. It has been pointed out many times before that the House of Representatives has attempted to repeal the Affordable Care Act 45 times at last count, I believe, but I have yet to hear any credible plan put forth to replace it or strengthen it or make it work better. And the American people want our constructive efforts to succeed. They would like it modified if it needs modification. But the attitude of some of our colleagues has been to just strip away the whole book of significant legislation--and replace it with what? We don't know. That is irresponsible. This Senate and this Congress is a great institution. Our Founding Fathers, in their wisdom, set up a system with plenty of room for debate, different points of view, and checks and balances. But checks and balances are not what is happening today. The government has been shut down not because Congress can't agree on levels of funding. We agree. We have actually agreed with the House on their level. The real reason is that some on the other side of the aisle--and I do think it is just a small cadre--have a very different vision about the government itself. And this is not hyperbole. We can all recall that during the Republican Presidential primaries we had candidates seeing who could out-promise whom in terms of eliminating aspects of the Federal Government. They proposed getting rid of the EPA, the Commerce Department, the Department of Education, FEMA, and the Department of Energy--not reforming these agencies, not changing their missions, not making them more efficient or more effective, but just doing away with them--and that spirit is animated in the House today, unfortunately. I am particularly glad that view did not prevail in the last election because these agencies are vital to all Americans. Looking back at Rhode Island, we were victims of serious historic flooding over the last several years. If FEMA had not been there to step in and help us, we would still be trying to pull ourselves together. As a small State, like Connecticut and other States, we do not have the resources to do it. We saw the same thing with Hurricane Sandy. They were there helping efficiently and effectively. And that is one of the agencies my colleagues are not allowing to operate today. Many small business men and women in my community, manufacturers, et cetera, have been aided immensely by the Department of Commerce. That is something else that was on the hit list during the Presidential primaries by Republican candidates. Those of us who enjoy clean water, fresh air, and the importance of a healthy environment--i.e., every American--even if they do not notice it or admit it, their health and the health of their children would be jeopardized severely if EPA was eliminated. There are calls repeatedly to make it more efficient, more effective, make it more businesslike, and those calls have to be recognized and heeded. But the notion that we would just wipe it away and the private markets or private self- interests would ensure that our air is clean, that our water is clean, and that our health is protected is not something that is either realistic or, indeed, even something that is arguable. There is room in this country for a range of views, and I recognize that many of my colleagues, who consider themselves members of the tea party, are simply doing their best to represent the views of those who sent them here. But I would hope everyone who has been entrusted with the responsibility of government could work together to at least make the government function--i.e., to stay open. That is a basic responsibility our constituents entrusted us with when they sent us to Washington. There is nothing patriotic about shutting down the government, putting hundreds of thousands of people out of work, and potentially forcing our country into default. And the hundreds of thousands out of work are not just government employees. As my colleague from Connecticut pointed out, now defense contractors are beginning to furlough. These industries are the heart and soul of so many communities. When these jobs are lost, there is a multiplier effect, which affects the entire community. And this cascading series of economic problems will get worse each day we keep this government closed. Both sides need to work together, but we have already significantly compromised on our side. Again, as the Senator from Connecticut pointed out, we are voting for a continuing resolution at the House level, not our level--a multibillion-dollar gap. We have accepted that. At least for the interim period, the 6 weeks or so of this continuing resolution, we accept the House's position. And of course, for many of us who have been arguing vociferously to end this sequestration, to increase investment, this was a significant compromise. We are not seeing that reciprocated on the other side; it is ``my way or the highway,''--stop ObamaCare or nothing gets done, Government doesn't work, and we will default on our credit. That is reckless, irresponsible, and does not serve the interest of those who sent us here. It is time for those who are proposing the wild plans of shutting down the government if they don't get exactly what they want to grasp the reality of the situation. We cannot keep this government closed. This closure will last as long as Speaker Boehner wants it to. He can, under the rules of the House, call up this bill within hours--perhaps less-- or Republicans can join Democrats and sign a discharge petition to bring it to the floor regardless of the Speaker's position. Those are two paths that should be taken immediately to open this government. We all have a shared responsibility for the government. As I sense it, one of the basic rationales of this government is to keep the lights on, keep people working. Let's get to the difficult negotiations on how we improve efficiency, how we improve operations, but we have a responsibility to keep our government open--to open it and then keep it open--and the longer this shutdown drags on, the more people will be affected. Cancer patients, young mothers, scientific researchers, Federal employees, people who take prescription drugs all are being negatively impacted. Government contractors are being laid off. Let's work together and reopen the government for business. Let's continue to debate the issues. We have many issues we can debate but not under the sword of Damocles--of a government that is closed and an economy that is beginning to lose more and more of its momentum and strength. That harms the American people irresponsibly and recklessly for a very narrow self-interested principle. There is another aspect here too. It is not just the government shutdown, but we are coming perilously close to a potential default on the debt of the United States. The government closure is affecting our economy dramatically, but a default on our debt could be catastrophic. There is a growing risk that this brinkmanship on the part of the Republican Party could force us to default. We are only 12 days away from a potential default because the tea party Republicans would rather play their games over the Affordable Care Act, ObamaCare, than choose to do what we have always done--pay our bills. This is not about borrowing more money to spend more. This is about paying for those things we agreed on--Republicans and Democrats-- through congressional appropriations, through legislation creating programs such as Medicare and Medicaid and Social Security. These are obligations we have incurred, and we won't be able to pay all of them. Indeed, on October 17, unless my Republican colleagues end their obstruction, the Nation will not be able to pay its bills, causing dire consequences for American workers and our economy. Many commentators have pointed out a default will destabilize the national and global economy. It could cause another financial crisis and over the span of a month cause an estimated $106 billion shortfall of Federal spending that would cause a severe economic contraction. If we can't pay our debts, then we will contract federal activity. That contraction will be multiplied in the economy. Our economic growth will slow. In fact, not only decelerate, it could collapse. Ironically, one aspect of that is it will almost overnight increase our deficit as less economic activity produces less revenue, there are more people who are laid off and eligible for unemployment insurance. It is a downward spiral. Economists on both sides agree that it is just the specter of default that has serious economic consequences. In fact, we have already seen the 1-month interest rate of Treasurys jump over the 6-month and the year-long rates. The markets are already voting. They are nervous. They are nervous that the Republicans will carry out these threats, and you can see it in what they are demanding in order to buy the short-term paper of the United States versus the longer term paper.

Mr. REED

Mr. REED. Madam President, I want to recognize the work of the Marshall Legacy Institute, MLI, and extend my congratulations on its 16th anniversary. While serving as Secretary of State, GEN George C. Marshall devised a plan to rebuild Europe after the devastation of World War II. Founded in 1997 on the 50th anniversary of the plan that bears General Marshall's name, the MLI's goal is to extend the plan's legacy by helping rebuild today's war torn countries. Over the past 16 years, the MLI has focused on assisting severely mine-contaminated countries, like Bosnia and Herzegovina, Iraq, and Afghanistan, by clearing mines, offering survivors' assistance programs, and providing educational outreach to children. This work is vital to civilians who, when they are finally able to return to their homelands after war, often face the unpredictable threat of landmines. It is also critical to protecting the brave men and women of our Armed Forces, who risk their lives every day to defend our country and often serve where landmines pose a significant threat to their safety. One such servicemember is PFC Barrett Austin, a combat engineer in the 4th Brigade Special Troops Battalion, 4th Infantry Brigade Combat Team, 3rd Infantry Division who bravely served our country in Afghanistan, and who died on April 21, 2013, after his vehicle was struck by an improvised explosive device. Private First Class Austin's dedicated service, selflessness, and sacrifice were the qualities that General Marshall exemplified and valued. It is therefore fitting that the MLI pay tribute to this soldier through its Mine Detection Dog Partnership Program by naming a mine detection dog in his honor. I thank MLI for its 16 years of service, and for its continued efforts to make our world a safer place.

Mr. REED

Mr. REED. Mr. President, first let me commend the chairwoman for her extraordinary leadership in so many different ways, including her articulate explanation of the crisis we face at the moment and her compelling argument that a piecemeal approach to resolving the government shutdown will not work, since the pieces are so critically interrelated. I rise to speak about this government shutdown as well. Today is day three of the Republican government shutdown, and it seems increasingly clear that Speaker Boehner is trying to drag this out long enough to merge the shutdown with brinkmanship over whether to pay our Nation's bills. This attempt to gut existing law and put the full faith and credit of the United States at risk is no way to run a country. If we are dragged into the commingling of the Republican government shutdown and the Republican proposals to default on our debt, we could be facing a catastrophic financial situation that would affect not just government operations but markets worldwide, and that is not something we should even contemplate. So we have to move very quickly to a resolution of this manufactured crisis. When I hear a discussion of what is going on, the words I hear used are words such as ``reckless,'' ``irresponsible,'' and, indeed, words much worse than these all across this country. The bottom line is the average American is fed up. They expect government to open, to serve them, to perform its basic function--not selective functions but its full range of functions. Survey after survey notes two simple things: No. 1, the government should be reopened for business. No. 2, the effort by some to connect the Affordable Care Act to funding the government should be ceased. These aren't the views of one particular political party; they are the views of a very, very large majority of Americans, and I share their sentiment. The government should not be closed. The Affordable Care Act should not be tied to reopening the government. There is a very simple solution here: Pass the short-term, continuing resolution at current levels of spending so then we can begin the process of resolving the budget impasse. Let me say that again: Pass the bill that funds the government at the current level of spending. Doing so means keeping, in effect, the sequester--something that many on the other side of the aisle have demanded. Frankly, I would hope that having done that, we could then seriously get into discussions with the leader and with the chairwoman on our side about how we create a budget for 2014 that does away with the sequester. This was inherent in the budget resolution which I supported last March. Regrettably, the tea party has refused to allow negotiations on the budget, even though we heard day in and day out complaints by our colleagues in a previous session of Congress that we need a budget, we need a budget, we need a budget. Well, we produced a budget, and now we are being blocked. What is happening instead of moving to meaningful, comprehensive budget negotiations is that we are in a government shutdown, and now the Republicans are trying to extricate themselves from this manufactured crisis, created by their own hands, by sending over piecemeal bills to fund preferred and selected agencies of the government. As the chairwoman pointed out, it doesn't work, because the government is related. NIH can make discoveries, but if the FDA is not authorized and operating so they can approve their use by people, it doesn't work. We can't disassociate these things. We saw today in Rhode Island about 26,500 women and children might lose their WIC benefits, their nutrition benefits, their support. Ignoring them and helping others is not going to benefit this country. In fact, it will contribute, I think, to decline. We have looked at the National Guard, veterans' benefits, and national parks. Those are all worthy elements, but they are not the entire range of elements we must perform. I believe the other side is trying to come up with some type of coherent argument for their actions. Is this about the debt? We have made progress in reducing our deficit. Because of actions we have taken, we have reduced projected deficits over 10 years by $2.4 trillion. Do we have to do more? Yes. But we have to do it in a current, thoughtful way. Is it about the sequester? Well, let's talk about the sequester. Let's talk about it in the context of a budget and appropriations bills for 2014. Is it about the Affordable Care Act? Well, it has begun. There has been a huge demand in the first few days and it is working through problems. And there will be problems. There is no major initiative of this kind that is rolled out by any business or any government that doesn't have issues, and those issues will be dealt with. What is very clear, though, is closing the government and then, in sort of an ad hoc way, opening up parts is no way to operate. It is unfair to the American people who aren't getting services they expect and deserve. Also, it's unfair to furloughed Federal employees at the Defense Department and elsewhere--not just the Defense Department but all Departments--some of them are working without the certainty that they indeed will be paid. There is a simple way to avoid this situation. The House should stop preventing an up-or-down vote on the Senate's continuing resolution and open the government. The Speaker can call up that vote in less than an hour, get it on the floor, and go ahead and reopen our government. Then reopen the thoughtful, careful, collaborative discussions about where we are going in terms of our budget, in terms of our deficit, in terms of serving the American people. I have heard a lot of talk such as: Oh, we have to have a lot of negotiations and compromise, et cetera. I have supported legislation I believe in strongly. I have opposed legislation, but I don't think I have ever stood up and said it is either my way or nothing happens. That is not the way to responsibly represent the people of America. It is the give-and-take of principled compromise. Sometimes there is legislation that reaches this floor that I can't support, but I think in a democracy it is the majority, ultimately--after we go through our procedural convolutions--it is the majority ultimately that prevails. There is a strong sense, as reflected in the newspapers, that the majority of the House of Representatives wants this situation resolved. They want all government agencies opened. And through the procedural votes on this side, it is very clear that our colleagues were willing to allow a majority vote to come to this floor, which carried. So the majority of the House and the Senate are with the American people. We just have to get the leadership of the House to get with the American people. We have to talk about some of these serious issues, but I think the best place to do so, in my view, is in the context of budget negotiations, and we have been repeatedly blocked from bringing the budget to conference. In fact, many of our Republican colleagues--and I will give them credit; many of them have stood up and said we have to go to the budget negotiations in the conference. Senator McCain said, for example, ``It's not the regular order for a number of Senators, a small number, a minority within a minority here, to say they will not agree to go to conference.'' That is what is happening. It is happening in terms of a minority of Republican Members in the House who are demanding that this Speaker not relent on this government shutdown, and it is happening here to a degree with respect to the conference committee on the budget. We have to go ahead and do our job. We have had colleagues on the other side talk about how the closure has detrimental effects. The Member who represents Yosemite National Park was very sad it was closed. I am also distressed that it is closed. I chair the subcommittee that appropriates funding for our national parks. We do our best to maintain the parks, to make sure we support those individuals who work for the Park Service. I understand the impact is not just within the confines of the park, it is the businesses all around the park. That is what we said a week ago. That is what I said a week ago, asking, in terms of our deliberations, that we pass a continuing resolution. So this should come as no surprise to those people who voted against keeping the government open. But this is not just about the value of a national park. It is about all the functions the government performs. It is about those women and children who receive benefits through the WIC Program. It is about those Federal workers who are furloughed who cannot perform their duties. We have to go ahead and open up our government. We have to recognize what a democracy ultimately is all about: It is the will of the American people--the majority of the American people--that has to be reflected, ultimately, by the Representatives and the Senators. Again, I think it is very clear, except for the bottleneck at the House leadership, that the majority of the House and the majority of the Senate want this government to open up. Let's do it. We need a vote. We have to stop relitigating the Affordable Care Act. It passed. It was upheld as constitutional by the Supreme Court. It is open for business starting on October 1, with significant interest by the public. There were 3,000 page-hits per minute in Rhode Island as it opened up on October 1, which I am told by the technologists is an amazing number. There were 2,000 calls to our call center--people who were looking for insurance, to buy it in a private marketplace, which is the core of the Affordable Care Act. So we have to move forward. If we do not move forward, SBA lending is effectively cut off, so small business men and women, who are struggling to get their businesses going, to keep them going, and hire Americans, will not have that ability to receive support from the SBA. We need, as they say--and everyone has become familiar with this term--a clean CR that opens everything up. If we do not, then we know the impact is going to be dramatic. In 2011, economists estimated that a shutdown would cost the economy 0.2 percent of GDP each week. And it accumulates. Looking back to 1995 and 1996, when a Republican House also shut down the government for 27 days, it reduced GDP growth by roughly 0.5 percent. Those are jobs, not just statistics. Those are lots of jobs and confidence in our economy. If we do not have jobs and confidence, then we are not doing our job and we are not fulfilling what we were sent here by the people to do: grow the economy, give us work, give us confidence that you can at least perform the basic functions of government. Now we have to move forward. I am uncertain as to how long this will continue to fester. We should do this immediately. As I said, procedurally the House--and I had the privilege to serve there for 6 years--can bring this continuing resolution up on very short notice and get, which I believe they have, the majority votes they need to pass it. That should be done. Then we can sit down and work again--work hard on those issues that face us in the context of budget negotiations and a conference and also recognize that while we are here involved in this manufactured crisis, the world is moving. The world is moving in ways in which we cannot be so preoccupied that we do not sense: foreign affairs issues in Syria, foreign affairs issues across the globe; international economic issues; future competitive issues with other economies. While we are fixated and focused on this manufactured crisis, which is completely unnecessary, we are not doing the important work, we are not anticipating the problems that are developing right now in the world or in our economy, we are not investing in jobs and in job creation, we are not looking ahead. We have to do that also. I would urge a quick, decisive vote on a continuing resolution so we can get back to the business of leading America. With that, I yield the floor.

Mr. REED

Mr. REED. Mr. President, I yield 3 minutes of proponent time to Senator Coats, as well as, by agreement of the other side, 3 minutes of opponent time.

Mr. REED. Mr. President, I yield 5 minutes of proponent time to the Senator from Massachusetts, Mr. Markey.

Mr. REED. Mr. President, I yield 8 minutes to the Senator from New Hampshire, Mrs. Shaheen.

Mr. REED

Mr. REED. I ask unanimous consent for an additional 30 seconds.

Mr. REED. We are not going out there and saying: Listen, let us borrow some more money so we can spend this new money. We are just trying to pay for programs and appropriations that have been approved by Congress, both Republicans and Democrats in both the House and the Senate. These are accumulated debt. Many of the debts were accumulated in the previous administration while we were fighting two wars. We are not--and we shouldn't--turn our back virtually for the first time in our history on what we have voted previously to spend. Indeed, if we do that, it will create chaos in the economic markets. It will create chaos like we have never seen before. The international markets are so fragile that we dare not risk this. With that, I yield the floor.

Mr. REED. Mr. President, I will begin where Senator Pryor left off, and that is to commend our chairwoman for her extraordinary leadership--not only on behalf of her constituents but for the Nation. These are very difficult times, and we all feel much more confident because of her leadership, because of her commitment, because of her incredible and energetic advocacy for commonsense solutions, in terms of not just her work on appropriations but in terms of the way we conduct ourselves in the Senate. We are fortunate to have her leadership. Along with many of my colleagues I am here to address the looming fiscal deadlines, and, more importantly, how to keep our economy growing and increasing jobs. That is why I believe we were sent here, not to engage in some of these procedural arguments, not to challenge the basic presumptions and the history of our country--which show that, with few exceptions, we have always managed to keep our government open, and with virtually no exceptions we have paid our bills. Yet today we are consumed by these debates when most every American in every corner of this country is asking us: What about our jobs? What about growth? What about the future for our children? So we have to refocus on growing our economy and investing in our country. A big part of that is to fund our government and to pay our debts. Let me start by pointing out that denying health insurance to 30 million Americans doesn't help the economy and it doesn't create jobs. It will do quite the opposite--it will set us back. We had substantial debate and we passed legislation; the Supreme Court of the United States declared the legislation constitutional, and we are going forward now, as most Americans want us to do, to deploy it, to fix it where it needs to be fixed, but not to use it as a political wedge for purely political means. We are for the first time about to achieve the dream of many people in many decades--that every American will have affordable access to health care; and, by the way, to do what other nations have been able to do and reduce the cost of health care so it's affordable, not just today but in the generations ahead. I think the idea that you would threaten a government shutdown to try to defeat this objective is unfortunate and inappropriate. We are facing two fiscal deadlines, and they can be reduced to very simple questions: Do we fund the government? Do we pay the Nation's bills? My answer, and the answer of the vast majority of constituents, is: Yes, we do. We have to. We understand we have to have an economy that works and a government that helps that economy work. We have to be efficient and effective. But we simply can't leave to the mercies of the market and fate what happens in our economy. We have to take purposeful action. That means we have to have a government that is prepared and able and has the resources to act. If Republicans force a shutdown of the government, it will have extraordinarily adverse consequences to thousands of Rhode Island workers, my constituents, and people all across this country. It would hurt our economic growth. Rather than doing this, we should be working to expand our growth. We should be doing more to get people back to work. But, instead, we have heard Republicans from both Chambers talking about another round of brinkmanship. We saw this in August 2011, and the results there were palpable. It set back our economy. It suppressed job creation. It took what looked like growing economic momentum and it deflated that momentum. Our credit rating was downgraded for the first time in anyone's recollection and perhaps in history. It was a shortsighted political game that hurt people all across this country. Yet Republicans are here again, apparently prepared to play the game. People do not want us to gamble with their futures, their children's futures. They want us to be helping them, both sides investing in those futures in a positive and collaborative way. But we are back arguing over whether to pay existing bills. Will we pay our bills by voting to raise the debt ceiling? Will we keep the government open and working so we can help people who need help, so we continue to research issues, so we continue to innovate, so we continue to build, literally, the country? We believe we must do this. This March, Senate Democrats passed a budget that set spending levels, responsibly replaced the sequester, reduced the deficit, and included a $100 billion targeted jobs and infrastructure package that would start creating new jobs quickly, begin repairing the worst of our crumbling roads and bridges, and help train our workers to fill 21st century jobs. The Republican-controlled House also passed a budget. It is in stark contrast to ours, but they have a budget too. The basic constitutional approach, the basic procedural approach is to bring those two budgets to conference, to iron out the differences, and to have a plan to go forward to fund the government. But we cannot do that because repeatedly Republicans here have objected to going to conference. This is ironic since the refrain we heard several years ago from Republicans was ``the Senate Democrats don't have a budget, they don't have a budget, et cetera.'' This of course was a political refrain; it ignored the fact that in the Budget Control Act of 2011 we actually set budget limits and effectively had a budget. But now the Republican refrain is sort of, ``never mind, they have a budget,'' and Senate Republicans object to conferencing the Senate and House budgets because they do not want the Congress to have a budget. We need to pass a budget. We need to responsibly deal with sequestration. We have to create jobs and strengthen the middle class. Last Friday, the House Republicans played their latest card in this gambit, which they have extended over several years, to achieve their political goals by holding the economy hostage. This time they want to defund health care reform as a condition of keeping the government open--indeed, a tactic that I believe even some Republicans in this body have rejected, and I think sensibly rejected. There is no doubt if the House position prevails it will hurt our economy, it will reduce revenue, it will waste taxpayers' dollars. According to the Congressional Budget Office, the shutdowns of the mid- 1990s reduced GDP by half a percent. Those shutdowns during the Clinton administration, again prompted by a Republican political agenda in the House, not an economic agenda, cost Americans jobs and growth. It is estimated every week the government shuts down it will cost the economy about $30 billion. This is a very expensive political gambit--something that should be rejected on its face but also rejected because of the harm, the demonstrable economic harm, it will do to the country. If you do care about jobs and the economy, the last thing you want to do is shut down the government. First of all, it eliminates directly a lot of people who work for the Federal Government--who pay taxes, who provide critical services. The secondary effect is they cannot do their job so economic activity stalls. Then the tertiary effect is that the local vendors in the community who rely on government contracts lose their business. It is a downward spiral. Everyone here, particularly my colleagues, the chair men and women of the appropriations subcommittees, recognize this. Senator Pryor was articulate about some of the effects on the agricultural sector. I have the privilege of chairing the Interior appropriations subcommittee. A shutdown would be very disruptive. For example, lease sales and permits for oil, gas and coal and other minerals on Federal lands would be stopped. Processing onshore oil and gas drilling applications would be stopped. Processing applications for permits to drill offshore will stop. Review and approval of offshore exploration and development plans will stop. What will be the effect? This will delay revenue, obviously, both to the Federal Government and for the private sector, as those private entrepreneurs who are out there investing their own capital to try to develop natural resources and provide them to the marketplace will lose out too. Another example, public access to recreation on Federal lands will virtually cease. The national parks, national monuments, and national wildlife refuges will be closed to visitors. Campgrounds, lodging, visitor centers, marinas, food services, and other concessions will be closed, with thousands of people without jobs. Businesses that operate in the parks or as outdoor outfitters will not be able to access permitted areas. If you go to any national park there is typically around it a group of small businessmen and women who provide backpacking gear, who provide rental of rafts and boats and outdoor equipment. What happens when the park closes? Their business goes to zero, practically. That is a consequence that is predictable, in fact, inevitable in the event of a shutdown. There is another aspect to this government shutdown too. While many Federal employees will be furloughed--again directly losing their pay, not contributing their tax dollars to the national economy--there are some who will not be. In the Interior Department alone, thousands of Federal workers will continue their jobs in order to protect life and property, but they will not be paid. This will include the Park Police. They were one of the first responders a few days ago to the Navy Yard shootings. Typical of their ethic of service and dedication to the country, they risked their lives, rushed to that place to try to protect fellow Americans. Those men and women of the Park Police will still stand guard, but they will not be paid. It also includes park rangers who provide valuable safety. It would include tribal law enforcement officers for our tribal police departments, tribal child protection services, and the oil and gas inspectors who have to go out and make sure existing operations are being conducted in a technically appropriate way. Turning to the EPA, Administrator Gina McCarthy has said, in her words: ``EPA effectively shuts down with only a core group of individuals who are there in the event of a significant emergency.'' EPA is planning to furlough approximately 95 percent of its total workforce. Staff will not be reviewing air, water, and hazardous waste permit applications or writing such permits. This will slow construction of new facilities and major improvements to existing ones, impacting jobs and impacting industry's overall willingness to plan investments. This could shrink construction in the United States, it could halt major construction projects, because you can't just take out the permitting process, or nullify it; these projects cannot go forward legally without permits, permits from EPA, permits from local regulators. We could have a huge construction contraction. We will have projects that have been planned, that are going forward, that will be put on hold, and it will ripple through the economy. EPA, for example, also will stop certifying that manufacturers are complying with all vehicle emission standards and without EPA certification, automakers will have a difficult time selling products in the United States. One of the great examples of what the President's leadership has done, the revitalization of the American automobile industry, could be jeopardized simply because they cannot have their vehicles certified by the EPA, which has basically closed. A shutdown compounds the hidden costs of the sequester. Sequestration is an inefficient and blunt instrument. It forces the Agency to make drastic decisions that frustrate that mission, that do not allow them to prioritize their work, and it frustrates our work here and throughout the United States. It will complicate and compound our life going forward. We are already feeling--put aside for the moment a potential government shutdown--the effects of the pending sequestration. We are seeing forced furloughs up in Rhode Island at the Newport Navy Base and other facilities and we are seeing the ripple effect of that. The local businesses are seeing demand go down, revenues go down. Their financial stability is being threatened. Rhode Islanders who have been laid off in private enterprises, through no fault of their own, are seeing their unemployment insurance cut by the sequester already. The average weekly benefit of $377 is being cut by $46. The Rhode Island Department of Labor and Training estimates 6,000 to 7000 Rhode Islanders are being affected, taking $1.4 million per month directly out of our economy. Our economy is at 9.1 percent unemployment. This is something that is causing pain and hardship to families throughout my State. The sequester is cutting back on the very modest benefits that they might be receiving after losing employment. Head Start is an extraordinarily valuable program that serves more than 2,400 children in my State. For fiscal year 2013, the sequestration has reduced funding by $1.3 million, which is a big number when it comes to the smallest state in the Union. To manage these sequestration cuts, staff have been laid off, transportation has been reduced, as have other support services. Even with those savings, 370 slots--children, don't call them slots--children will not gain access to Head Start. That means in many cases their parents cannot continue to work because they cannot leave their child alone, and the problem becomes more and more complicated. These problems have profound implications and they reach very far across the spectrum. Then there is one other point I wish to make. Some people are saying sequestration is bad, but we just have to deal with the defense aspects of it because that is the most important thing--that these other programs, they can go away. Norm Augustine is one of the premier leaders in the defense industry. He is former chairman of Lockheed Martin, former Secretary of the Army. He served on so many different boards as one of the great public servants as well as one of the great industrial leaders--National Academy of Engineering, Defense Science Board, American Institute of Aeronautics and Astronautics. In his speech recently, Mr. Augustine said that much of the nondefense spending people are dismissing as unimportant is more critical to our national security or as critical as some of the defense programs. He talked about how today's youngest generation will be the first in history to be less well educated than their parents, if trends continue. They are likely to be less healthy, particularly if we do not continue to support the health care improvements of the Affordable Care Act. One of the startling discoveries is that the military, according to Mr. Augustine, is claiming that 70 percent of today's young people are ineligible for military service because of mental, physical, and moral shortcomings. The mental and physical shortcomings are a function of two things-- education and health care. Republicans are proposing to say: Let's cut them. Let's defund the Affordable Care Act. Who will be the beneficiaries of the Affordable Care Act and better Head Start and better education? Probably those 70 percent of the young people who cannot qualify to be recruits in the Army. So if you think we have a problem of national defense, we do have a problem of defense, but it is not simply solved by buying more platforms, more ships, more planes; it is by having a generation of Americans who can stand and serve. I could go on, but I simply want to say we are in a situation where we have to basically do what we have always done, stood and said: We are going to keep the government moving. We are going to make choices about priorities, but we are going to keep our government open. We will debate those choices and we will debate those priorities and we will come to a conclusion and we will move forward and we are going to pay the debts we already accumulated. The American people should understand this is not like an initial offer of a debt security.

Mr. REED

Mr. REED. Mr. President, I ask unanimous consent that Rita Culp, a detailee from the Environmental Protection Agency to the Committee on Appropriations, be granted floor privileges for the remainder of the 113th Congress, and Tiffany Taylor, a detailee from the Department of the Interior to the Committee on Appropriations, be granted floor privileges for the remainder of the first session of the 113th Congress.

Mr. REED

Mr. REED. Mr. President, today I am introducing, along with Senator Blumenthal, the Stop Subsidizing Multimillion Dollar Corporate Bonuses Act. This bill closes a loophole that allows publicly traded corporations to deduct an executive's pay over $1 million from their tax bill. Under current tax law, when a public corporation calculates its taxable income, generally it is permitted to deduct the cost of compensation from its revenues, with limits up to $1 million for some of the firm's most senior executives. However, a loophole has allowed many public corporations to avoid such limits and freely deduct excessive executive compensation. For example, because of this loophole, if a CEO receives $15 million in compensation in a given year, that amount can cause the corporation's taxable income to decline by $15 million. With the current corporate tax rate at 35 percent, the corporation in this case would pay less tax to the U.S. Treasury, up to 35 percent of $15 million, leaving the corporation's shareholders to bear only $9.75 million of the $15 million cost of executive pay, while U.S. taxpayers foot the remaining $5.25 million. The Stop Subsidizing Multimillion Dollar Corporate Bonuses Act would allow a public corporation to deduct compensation up to only $1 million. Using the same example, this would mean that corporate shareholders would bear $14.65 million of the $15 million in compensation. Over a ten-year window, the Joint Committee on Taxation has estimated this legislation would close a loophole that costs U.S. taxpayers over $50 billion by making some simple changes to existing law. First, our legislation extends section 162(m) of the tax code to all employees of publicly traded corporations so that all compensation is subject to a deductibility cap of $1 million. Publicly traded corporations would still be permitted to pay their executives as much as they want, but compensation above and beyond $1 million would no longer be bankrolled, in part, through our tax code. Second, our bill removes the exemption for performance-based compensation, which currently permits compensation deductions above and beyond $1 million when executives have met performance benchmarks set by the corporation's Board of Directors. As a result, publicly traded corporations would still be able to incentivize their executives, but all such incentives would be subject to a corporate deductibility cap of $1 million. Finally, our legislation makes a technical correction to ensure that all publicly traded corporations that are required to provide quarterly and annual reports to their investors under Securities and Exchange Commission rules and regulations are subject to section 162(m). Currently, this section of the tax code only covers some publicly traded corporations who are required to provide these periodic reports to their shareholders. Discouraging unrestrained compensation packages shouldn't hinge on whether a publicly traded corporation falls into one SEC reporting requirement or another, and my bill closes this technical loophole. With this legislation, we aim to put an end to some of the extravagant tax breaks that exclusively benefit public corporations. This is simply a matter of fairness at a time of fiscal belt tightening, when so many of our constituents have already sacrificed. I want to thank Senator Blumenthal and his staff for working with me on this issue, and I urge our colleagues to join us by cosponsoring this legislation.

Mr. REED

Mr. REED. Mr. President, today I am introducing, along with Senator Blumenthal, the Stop Subsidizing Multimillion Dollar Corporate Bonuses Act. This bill closes a loophole that allows publicly traded corporations to deduct an executive's pay over $1 million from their tax bill. Under current tax law, when a public corporation calculates its taxable income, generally it is permitted to deduct the cost of compensation from its revenues, with limits up to $1 million for some of the firm's most senior executives. However, a loophole has allowed many public corporations to avoid such limits and freely deduct excessive executive compensation. For example, because of this loophole, if a CEO receives $15 million in compensation in a given year, that amount can cause the corporation's taxable income to decline by $15 million. With the current corporate tax rate at 35 percent, the corporation in this case would pay less tax to the U.S. Treasury, up to 35 percent of $15 million, leaving the corporation's shareholders to bear only $9.75 million of the $15 million cost of executive pay, while U.S. taxpayers foot the remaining $5.25 million. The Stop Subsidizing Multimillion Dollar Corporate Bonuses Act would allow a public corporation to deduct compensation up to only $1 million. Using the same example, this would mean that corporate shareholders would bear $14.65 million of the $15 million in compensation. Over a ten-year window, the Joint Committee on Taxation has estimated this legislation would close a loophole that costs U.S. taxpayers over $50 billion by making some simple changes to existing law. First, our legislation extends section 162(m) of the tax code to all employees of publicly traded corporations so that all compensation is subject to a deductibility cap of $1 million. Publicly traded corporations would still be permitted to pay their executives as much as they want, but compensation above and beyond $1 million would no longer be bankrolled, in part, through our tax code. Second, our bill removes the exemption for performance-based compensation, which currently permits compensation deductions above and beyond $1 million when executives have met performance benchmarks set by the corporation's Board of Directors. As a result, publicly traded corporations would still be able to incentivize their executives, but all such incentives would be subject to a corporate deductibility cap of $1 million. Finally, our legislation makes a technical correction to ensure that all publicly traded corporations that are required to provide quarterly and annual reports to their investors under Securities and Exchange Commission rules and regulations are subject to section 162(m). Currently, this section of the tax code only covers some publicly traded corporations who are required to provide these periodic reports to their shareholders. Discouraging unrestrained compensation packages shouldn't hinge on whether a publicly traded corporation falls into one SEC reporting requirement or another, and my bill closes this technical loophole. With this legislation, we aim to put an end to some of the extravagant tax breaks that exclusively benefit public corporations. This is simply a matter of fairness at a time of fiscal belt tightening, when so many of our constituents have already sacrificed. I want to thank Senator Blumenthal and his staff for working with me on this issue, and I urge our colleagues to join us by cosponsoring this legislation.

Mr. REED

Mr. REED. Mr. President, I am proud to be once again reintroducing the Housing Assistance for Veterans Act, HAVEN Act, with my colleague, Senator Johanns. Last year, we joined forces to successfully pass this legislation as an amendment during the Senate's consideration of the National Defense Authorization Act, NDAA. Unfortunately, due to concerns by some on the Veterans' Affairs Committee, it was not included in the final version of the NDAA. Those concerns have been addressed in this version of the HAVEN Act, and I would like to thank the Veterans' Affairs Committee for working cooperatively with us to strengthen the legislation. Our veterans have made many personal sacrifices in service to our Nation, and we must honor our commitment to provide them with the care they have earned and deserve. One such way is to ensure that they have access to adequate housing. According to Rebuilding Together, 5.5 million of our veterans are disabled, and one and a half million are at risk of homelessness. In my home State of Rhode Island, according to the U.S. Census Bureau, there are more than 19,000 veterans with disabilities, each of whom face their own unique challenges in terms of their housing needs. The Department of Veterans Affairs, VA, has programs that assist veterans in adapting and improving their homes, but unfortunately, these programs do not extend assistance to all veterans with disabilities. It is clear we must do more, and with this legislation, we are seeking to serve all veterans with disabilities, regardless of the severity of the disability and whether the disability is service- connected. The HAVEN Act will give veterans the opportunity to renovate and modify their existing homes by installing wheelchair ramps, widening doors, re-equipping rooms, and making necessary additions and adjustments to existing structures--all so that these homes are safer and more suitable for our veterans. Our legislation encourages key stakeholders, such as the Department of Housing and Urban Development, the VA, housing non-profits, and veterans service organizations, to work together to serve our veterans. In order to extend the reach of this Federal funding, grant recipients would be expected to either match Federal funding or make in-kind contributions, through encouraging volunteers to help make repairs or engaging businesses to donate needed supplies. This bill is supported by the American Legion, Veterans of Foreign Wars, Vietnam Veterans of America, Paralyzed Veterans of America, VetsFirst, a program of United Spinal Association, Iraq and Afghanistan Veterans of America, Habitat for Humanity, and Rebuilding Together. I thank Senator Johanns for working with me on this important bill, and I look forward to working with him and the rest of our colleagues to pass this legislation.

Mr. REED. Mr. President, our economy will not work for individuals or for our nation unless we create and support avenues for adults to continue their education and build their skills. These are longstanding issues that I have worked on for many years, including the last attempt to reauthorize the Workforce Investment Act. I was pleased to work with Senator Webb in the 112th Congress on the Adult Education and Economic Growth Act, and I am proud to reintroduce it today with Senator Brown. I thank Congressman Ruben Hinojosa for introducing the companion legislation in the House of Representatives. The Adult Education and Economic Growth Act increases the investment in adult education programs; ensures better coordination among adult education programs, workforce development programs, and higher education; strengthens professional development for adult education providers; expands the use of technology in adult education programs; and provides incentives for employers to support their workers who need adult education services. In Rhode Island, roughly 41 percent of working age adults have a college degree. By 2018, it is estimated that 61 percent of Rhode Island jobs will require some postsecondary education. We have an estimated 91,000 individuals without a high school diploma--the basic ticket to accessing postsecondary education and training. Nationally, the numbers make a similar case for the need to invest in adult education. According to the National Commission on Adult Literacy, 80 to 90 million U.S. adults today, about half of the adult workforce, do not have the basic education and communication skills required to obtain jobs that pay a family-sustaining wage. These individuals continue to struggle in the recovering economy, with unemployment rates above 10 percent for individuals who do not have a high school diploma, compared to 7.6 percent for high school graduates and less than 4 percent for workers with bachelor's degrees. Simply put, we will not be able to close the skills gap without a robust investment in adult education. Unfortunately, we have not been making this kind of investment. Funding has been anemic, and as a result, services reach fewer than 3 million adults annually--a fraction of the need. The Adult Education and Economic Growth will help turn around this dire situation by increasing the authorization for adult education programs authorized under Title II of the Workforce Investment Act to $850 million and establishing a new state technology grant for adult education to upgrade the delivery system and assist adults in attaining critical digital literacy skills. This legislation requires state and local workforce investment boards to address adult education in their plans for using funds authorized under Title I of the Workforce Investment Act, including incorporating adult education into career pathways programs and offering integrated education and training programs. It also strengthens programs and services for English learners, including authorizing the Integrated English Literacy and Civics Program, and for adults with disabilities. The legislation will also build the knowledge base on what works for adult learners through a National Center for Adult Education, Literacy, and Workplace Skills. Finally, the Adult Education and Economic Growth Act will provide employers with tax incentives to invest in developing the basic skills of their employees. In sum, the Adult Education and Economic Growth Act offers a comprehensive approach to reaching the millions of adults who need basic skills, English literacy instruction, or a secondary school diploma so that they can embark on a career pathway that leads to economic stability and success. I am pleased to have worked with the National Commission on Adult Literacy in developing this legislation. I urge my colleagues to cosponsor this bill and work with me to include its provisions in the pending reauthorization of the Workforce Investment Act.

Mr. REED

Mr. REED. Mr. President, I am proud to be once again reintroducing the Housing Assistance for Veterans Act, HAVEN Act, with my colleague, Senator Johanns. Last year, we joined forces to successfully pass this legislation as an amendment during the Senate's consideration of the National Defense Authorization Act, NDAA. Unfortunately, due to concerns by some on the Veterans' Affairs Committee, it was not included in the final version of the NDAA. Those concerns have been addressed in this version of the HAVEN Act, and I would like to thank the Veterans' Affairs Committee for working cooperatively with us to strengthen the legislation. Our veterans have made many personal sacrifices in service to our Nation, and we must honor our commitment to provide them with the care they have earned and deserve. One such way is to ensure that they have access to adequate housing. According to Rebuilding Together, 5.5 million of our veterans are disabled, and one and a half million are at risk of homelessness. In my home State of Rhode Island, according to the U.S. Census Bureau, there are more than 19,000 veterans with disabilities, each of whom face their own unique challenges in terms of their housing needs. The Department of Veterans Affairs, VA, has programs that assist veterans in adapting and improving their homes, but unfortunately, these programs do not extend assistance to all veterans with disabilities. It is clear we must do more, and with this legislation, we are seeking to serve all veterans with disabilities, regardless of the severity of the disability and whether the disability is service- connected. The HAVEN Act will give veterans the opportunity to renovate and modify their existing homes by installing wheelchair ramps, widening doors, re-equipping rooms, and making necessary additions and adjustments to existing structures--all so that these homes are safer and more suitable for our veterans. Our legislation encourages key stakeholders, such as the Department of Housing and Urban Development, the VA, housing non-profits, and veterans service organizations, to work together to serve our veterans. In order to extend the reach of this Federal funding, grant recipients would be expected to either match Federal funding or make in-kind contributions, through encouraging volunteers to help make repairs or engaging businesses to donate needed supplies. This bill is supported by the American Legion, Veterans of Foreign Wars, Vietnam Veterans of America, Paralyzed Veterans of America, VetsFirst, a program of United Spinal Association, Iraq and Afghanistan Veterans of America, Habitat for Humanity, and Rebuilding Together. I thank Senator Johanns for working with me on this important bill, and I look forward to working with him and the rest of our colleagues to pass this legislation.

Mr. REED

Mr. REED. Mr. President, our economy will not work for individuals or for our nation unless we create and support avenues for adults to continue their education and build their skills. These are longstanding issues that I have worked on for many years, including the last attempt to reauthorize the Workforce Investment Act. I was pleased to work with Senator Webb in the 112th Congress on the Adult Education and Economic Growth Act, and I am proud to reintroduce it today with Senator Brown. I thank Congressman Ruben Hinojosa for introducing the companion legislation in the House of Representatives. The Adult Education and Economic Growth Act increases the investment in adult education programs; ensures better coordination among adult education programs, workforce development programs, and higher education; strengthens professional development for adult education providers; expands the use of technology in adult education programs; and provides incentives for employers to support their workers who need adult education services. In Rhode Island, roughly 41 percent of working age adults have a college degree. By 2018, it is estimated that 61 percent of Rhode Island jobs will require some postsecondary education. We have an estimated 91,000 individuals without a high school diploma--the basic ticket to accessing postsecondary education and training. Nationally, the numbers make a similar case for the need to invest in adult education. According to the National Commission on Adult Literacy, 80 to 90 million U.S. adults today, about half of the adult workforce, do not have the basic education and communication skills required to obtain jobs that pay a family-sustaining wage. These individuals continue to struggle in the recovering economy, with unemployment rates above 10 percent for individuals who do not have a high school diploma, compared to 7.6 percent for high school graduates and less than 4 percent for workers with bachelor's degrees. Simply put, we will not be able to close the skills gap without a robust investment in adult education. Unfortunately, we have not been making this kind of investment. Funding has been anemic, and as a result, services reach fewer than 3 million adults annually--a fraction of the need. The Adult Education and Economic Growth will help turn around this dire situation by increasing the authorization for adult education programs authorized under Title II of the Workforce Investment Act to $850 million and establishing a new state technology grant for adult education to upgrade the delivery system and assist adults in attaining critical digital literacy skills. This legislation requires state and local workforce investment boards to address adult education in their plans for using funds authorized under Title I of the Workforce Investment Act, including incorporating adult education into career pathways programs and offering integrated education and training programs. It also strengthens programs and services for English learners, including authorizing the Integrated English Literacy and Civics Program, and for adults with disabilities. The legislation will also build the knowledge base on what works for adult learners through a National Center for Adult Education, Literacy, and Workplace Skills. Finally, the Adult Education and Economic Growth Act will provide employers with tax incentives to invest in developing the basic skills of their employees. In sum, the Adult Education and Economic Growth Act offers a comprehensive approach to reaching the millions of adults who need basic skills, English literacy instruction, or a secondary school diploma so that they can embark on a career pathway that leads to economic stability and success. I am pleased to have worked with the National Commission on Adult Literacy in developing this legislation. I urge my colleagues to cosponsor this bill and work with me to include its provisions in the pending reauthorization of the Workforce Investment Act.

Mr. REED

Mr. REED. The Reed-Warren amendment would provide students and families with certainty by ensuring that interest rates will go no higher than they would under the current fixed rates in present law-- 6.8 percent for student loans and 7.9 percent for PLUS loans. The amendment is fully paid for by a very small--about one-half of 1 percent--surcharge on income over $1 million. We should do this for students all across the country, and we should do it not only for the students who might be going to college next year but for those who are in high school today and will face, as we know, predictably higher rates. A young man from Rhode Island wrote a letter to me. He said: My brother, who is in college, will be paying a lot of money for college and he's worried he will have a hard time paying the loan. I'm afraid that by the time I go to college, loans will be so expensive that I will not be able to pay it off. My parents help with paying for college but they might not be able to help with a loan that big. I really want to be able to go to college. For those young men and women who are in high school today or who are going to high school, we have to at least vote for this Reed-Warren amendment to make sure interest rates stay at least within the present bounds. With that, I urge a ``yes'' vote.

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

Mr. REED. Mr. President, I oppose the proposed amendment. It is short-term rate relief, but it is long-term rate pain for thousands of students and families across the country. We can do much better than that. In a few moments, we will have an opportunity after the voice vote to have another small discussion prior to final passage. Again, I believe this amendment is not--despite the best work and best intentions and great effort by my colleagues--the best work we can do with respect to students and families.

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

Mr. REED. Madam President, I am pleased to offer this amendment, along with Senator Warren and 18 of our colleagues. Our amendment would provide the kind of certainty students deserve and that they will not receive under the proposed bipartisan Student Loan Certainty Act as it is currently drafted. Simply put, our amendment will ensure that students and parents will not be any worse off than they would be under the current fixed rates of 6.8 percent or 7.9 percent. To illustrate this, let me present a chart. Under the underlying legislation, Stafford loans for students are essentially subject to the same interest rates, and they are depicted here. These are the undergraduate loans in yellow and the graduate loans in white. We can see in the first year for the undergraduate loans it is just under 4 percent, and that is less than the 6.8-percent current statutory limit. For the graduate loans, they are up roughly about 5\1/2\ percent, which, again, is below that. But very quickly, by 2015, the graduate loans exceed this 6.8-percent threshold. That is the current law. Then it keeps going up and up and up. Actually, this chart does not represent the entire impact because the last bar represents the estimates not just for 1 year but for 5 years. So we can see these increments--the white increments for the graduate loans--keep going up and up and up indefinitely. This is permanent legislation. This is not a 5-year fix or a 10-year fix. It is permanent legislation. A similar process is that the undergraduate Stafford loans go up and up and up and up. Our legislation will simply say if you want to provide an incentive and a benefit for students who are today going to school, that is commendable, but at some point we are going to have a much worse deal for students than we have just with the current law. So we are proposing, very simply, to cap at 6.8 percent the Stafford loans and then at 7.9 percent for the parent PLUS loans. This is a projection of the percentage interest rates for parent loans. Again, 2013, it is below the present 7.9-percent statutory limit, but quickly, by 2015, it is above, and then it is indefinite. From 2018 to 2023 and beyond, it goes up and up and up and up. Our amendment simply says if we want to give everybody a benefit in the next several years of lower rates, do it, but let us give real certainty that rates will not exceed the current statutory rates. As I have indicated previously in my remarks, I wish to commend the authors at least for putting in caps on rates. Some of the original proposals coming from the Senate Republicans and other places had no real caps in place. At least now we have caps. I want to particularly thank Chairman Harkin, because he committed himself to ensuring that all these loan programs have a cap. Our point, though, is the caps are so large that effectively students and parents in a very short period of time will be paying much more than they are today. These caps are too high. They could go as high as 8.25 percent for undergraduate Stafford loans, 9.5 percent for graduate Stafford loans, and 10.5 percent for PLUS loans. Those are significantly higher than our threshold. We can do better. We want to protect students from these high interest rates. In Rhode Island, roughly 49,000 students will borrow for this coming academic year. They would benefit from this approach, but their brothers and sisters, who may be freshmen in high school, will be taking out loans when the interest rates will be exceeding the current rates. Adopting the Reed-Warren amendment means students can benefit from these low rates initially, but then we will have the existing statutory cap in place for future generations. As it exists now, if you are a senior in high school and you are going to college next year, you are going to get the benefit of the rate, but your younger brother or sister, who may be a freshman or junior in high school, and your parents are paying for it in the future, and will be paying indefinitely. As my colleague Senator Warren has pointed out, they are doing it in a situation in which the government is making billions of dollars a year on these loans. This is not a question of putting subsidies in. Contrary to the history and purpose of the student loan programs, we are actually reversing the subsidy. We are saying, No, the students pay. Education is so important to the future of America, yet we are no longer going to invest in it as a Nation. We are going to let students pay. That is the way this whole approach has been structured. They picked as their benchmark the 10-year Treasury bill. Typically, we use the 91-day Treasury bill. Just in the baseline, there is a higher interest rate. Then they picked a premium to put on top to compensate the government for potential risk of loss. As some of my colleagues suggested, we are not quite sure what the premium should be, and we feel very strongly that premium is much too high for the actual risks and costs of the program. So this proposal has baked in higher interest rates for some students after the first 2 years, and for all students and parents in the long run. I believe what we are doing in the Reed-Warren amendment makes a great deal of sense. Many people are struggling in many different ways, and particularly students are struggling with student debt. We should ensure that the new rate structure does not leave students worse off-- and not just for the first 2 years, but let's be realistic and serious. Let's look down the road. This road is taking us to higher and higher interest rates for students. I think we can do better. I think we must do better. I would point out that we have paid for this amendment by putting a very small surcharge of 0.55 percent on incomes over $1 million, so this is fully paid for, and it will give students the real certainty that they will not see interest rates go beyond the present statutory limits. I think what we should be doing as a Nation is not shifting the burden to students but investing through students in our future. We know if students are able to go on to college and to postgraduate education, they are going to make more money, they are going to contribute more to the economy, we are going to be more globally competitive, and we will be in a much better position. Frankly, that was the wise judgment our parents and grandparents made when, in the 1950s, 1960s, and the 1970s, they decided to invest in the future of America by investing in higher education. I daresay there are very few people in this Chamber who in one way or another did not directly benefit from that investment. But now we are saying today, No, it is on the students, they are going to pay market rate premiums, and, according to CBO numbers, we will be generating about $184 billion--the difference between our borrowing costs and what the students and families are paying. That is not the way to grow a strong, prosperous America. Because there have been elaborate studies, we also understand that we have a jobs gap already between highly educated individuals and the jobs. By 2020, there will be about a 5-million-jobs gap between those jobs requiring higher education and the projected graduates in the next several years going forward. So we have to do much more, and I think we also have to look at the issue in a comprehensive way. We have to build in incentives for lower costs at colleges and universities. That is not being done in this legislation, and I think once we pass it, the likelihood of getting on to that issue is diminished. We also have to try to come up with ways in which students can refinance loans. A trillion dollars of student debt has surpassed credit card and automobile debt as the second biggest household debt in the country, and that is going to grow. It will particularly grow under the underlying proposal. We have to figure out a creative way to do that. And, by the way, that is going to cost money. So if one of the principles and premises of this whole legislation is we will spend no additional money for higher education support, how are we going to fix that issue of students and families who are deeply in debt--not just those who are carrying the debt today but those who are going to accumulate the debt going forward? I urge my colleagues to vote yes on the Reed-Warren amendment. This will be the certainty that is proclaimed in the title of the underlying legislation. Madam President, I yield the floor.

Mr. REED. Mr. President, I recognize it is a much larger State. The nice thing about the Senate is that we all have two Senators. There has been a great deal of work put together by so many people here: Senator Carper, Senator Manchin, Senator Alexander, Senator Harkin, Senator King, and Senator Burr. I could go on. They have been trying--in a principled way--to help students. They provided short-term help, but the major criticism I have of the legislation is that it locks us into the long-run, predictable rate increases and will add further to the burden that students and families are bearing to send their children, and themselves, to college and beyond. Despite these great efforts, I just do not believe this approach, if unamended, is going to be the way we want to move forward. Mark Kantrowitz is a well-known expert on student aid. His comments are particularly telling. It's still going to be, effectively, an interest rate increase masquerading as a decrease. Students currently enrolled will benefit from the low interest rates, but as the economy recovers and rates rise, today's high school students could end up paying more than 6.8 percent. It's far from a permanent solution. I think he is right. I wish to emphasize the fact that as the economy recovers and rates rise, one of the fallacies of the CBO projections is that back in early 2000s they suggested that interest rates would stay very high. They did not anticipate the collapse in 2008 and 2009 of our economy. Honestly, I don't think we want to premise our student lending on an economic collapse. I think what we want to do is assume and hope that the economy recovers, which will invariably increase interest rates. We are starting at the low point of interest rates, and then inevitably we are moving up. We are moving up as the economy recovers. We will also move up as the Federal Reserve limits their very aggressive quantitative easing program, where they have been buying securities to depress the rates. If we look at the CBO projections, parents and graduate students will begin paying more than the current fixed rate of 6.8 percent and 7.9 percent by 2015. That is not a long time. That means the young freshman who is going into college next year might benefit from this proposal, but the younger brother or sister who is a freshman in high school will be paying much more. I think collectively, over time, since this is a permanent proposal, the debts that will accumulate to American families and American students will be significant. We are essentially adopting a new approach to Federal policy on higher education. We are not subsidizing it; we are not making it below market rates. We are shifting the costs on to students. That is because one of the premises in this proposal, quite obviously, is that there will be no cost to the government, and we are starting with the principle of a rate of 6.8 percent over time. So as we decrease rates for the first few years, just simple arithmetic tells us we have to raise rates going forward. Also, I think the way this is structured has to be considered. We have chosen not a short-term T-bill rate--a 91-day rate--which is low; we have chosen a 10-year rate which, in itself, is higher. So we have begun our reconstruction of the rate structure by picking a much higher baseline than has been consistent in the past, even with variable rates, and we have had variable rates in the past. Then we have added a premium to that to cover our costs--the cost of default, the cost of the administration of the program. Interestingly enough, in this proposal, there is a study the GAO is ordered to do to tell us if our cost estimates are in any way close to the real cost to the Federal Government. I think the factor is significantly sufficient that the premium--the delta, if you will--we are charging students is much higher than the real cost, even including default rates, to the Federal Government. I think this is a proposal that, again, was generated with great sincerity and great diligence, but over time it does not meet the test of consistency with our previous support for higher education. We actually subsidized higher education, and we did it at below-market rates. We did it because we believed we had to give students a chance to educate themselves not only for their benefit but, just as importantly, for the benefit of this Nation. I would suggest--and around this Chamber I have said this before-- directly or indirectly, every one of my colleagues who is of a certain age has benefited from subsidized student loans. If they didn't, then a brother or a sister or someone did. Yet we are saying that was good for us, but it is not good for this generation of students. They should bear the risk of interest rate increases. They should bear the full cost. This is at a time when we have to be much more cognizant of the centrality of higher education in terms of the lifetime wages and earnings of individuals and in terms of our economic competitiveness across the globe. We all have reached a point that unless we adopt the amendment I propose, we are locking ourselves into increasing rates that go way beyond the current statutory rate of 6.8 percent for Stafford loans and 7.9 percent for PLUS loans. Even with these rates--the current rates-- 6.8 and 7.9 percent--CBO has estimated that the government will generate about $184 million in revenues. That is the difference between the cost of funding and the return. It is just what it costs the government to borrow and what they are getting in revenue from students, accounting for defaults and borrower benefits. So instead of investing in students, we are basically profiting from them, and that point has been made by my colleagues, particularly Senator Warren, over time. As we move to this new form of rate structure--10-year Treasury bills plus a premium; they are capped, but they are capped at high rates--the government will, in fact, be making even more money. What I would like to do and what we have tried to do is to propose that we initially freeze rates at 3.4 percent and then spend the time to fix this problem as best we can completely. We need to develop a rate structure that does not provide a huge profit, as defined between the cost of funding and the revenue to the Federal Government, incentivize colleges to lower tuition--and that will be a very difficult and challenging endeavor--and think seriously about refinancing because right now we have students and families facing $1 trillion in debt, and they are suffering under this situation. We want to take a comprehensive approach, but this is not the approach. This is simply fixing rates. The one certainty in this legislation is that the rates will go up--not right away, but they will go up--and they could go up very quickly, and they could reach the limits very quickly, and that is an additional burden on students. As a result, it will begin to make college more expensive, less affordable, less of an option for many families and youngsters, and it will hurt us in the long run in terms of our economic competitiveness and our ability to grow our economy. We have had experience with market-based rates in the student loan program before. This is not new. Most recently, the market-based rates for student loans from July 1, 1998, and June 30, 2006, was yield on a 91-day Treasury bill plus 1.7 percent while the student was in school and plus 2.3 percent while the student was in repayment. This rate was capped at 8.25 percent, and it applied to all Stafford loans-- subsidized, unsubsidized, and graduate. For parent PLUS loans, the rate was the yield on the 91-day Treasury bill plus 3.1 percent, capped at 9 percent. Those rates were a good deal for borrowers. Students who are repaying their loans under this system have a rate of 2.35 percent this year and parents are paying 3.15 percent. That is because interest rates have come down dramatically. One of the reasons for that--perhaps the primary reason--is because we faced an economic potential catastrophe in 2008 and 2009. Economic activity shrunk, rates fell, and the Federal Reserve took a very aggressive program of quantitative easing to deliberately lower interest rates. Instead of using the 91-day Treasury bill, what this underlying proposal uses is the 10-year Treasury bill. This decision results in a rate that in and of itself is 1.76 percentage points higher for this year alone. If we use the 91-day T-bill rate, we could lower rates even further, but we are using the 10-year rate, so we are already building in almost 2 percentage points of interest for students who will be subject to this legislation. Since May 1 we have already seen the rates on the 10-year Treasury bill climb nearly 1 percent. Those rates are headed upward, and the CBO has projected them to rise. That is consistent, by the way, with an economic recovery. So the good news is if the economy recovers, interest rates will rise except it is not good news for students because their interest payments will rise. If CBO is wrong, that means we will probably have an economic shock ahead of us which will be bad news for everyone. So I think we have to be very cognizant of the fact that there is a much better way to do this, and there should be a comprehensive approach. What we are suggesting, and in the amendment Senator Warren and I are proposing, is that we at least cap the interest rates for the Stafford loans--for the undergraduate loans--at 6.8 percent, which is the current rate, and for the PLUS loans at 7.9 percent so no one, regardless of whether one starts college next fall or 4 years from now, will be worse off than the current situation with the fixed interest rate. I think that would be an improvement. I think, if we don't adopt such an approach, then we are locking students and families into a very costly and predictably increasingly costly structure. We are not making any reforms with respect to the cost of college. We are not dealing with the issue of refinancing. Honestly, I also think to say, well, if it gets really bad, if we really start hitting those caps--to say we will go back and fix it fundamentally ignores one of the principles that underlies this proposed legislation--that there be no further costs to the government. To fix the interest rate several years from now, when it is 8 percent, again, will cost a lot more than staying with the current 6.8 percent fixed rate and 7.9 percent fixed rate. So for that reason, I will be opposing the underlying legislation unless we can make significant progress with respect to at least capping the rates at 6.8 percent and 7.9 percent. With that, I reserve the remainder of my time, and I yield the floor.

Mr. REED. I ask for the yeas and nays.

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

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