Paul Simon

Mr. SIMON

Mr. SIMON. Mr. President, I yield 50 seconds to my colleague from Virginia.

Mr. SIMON. I will read it, and I thank my colleague.

Mr. SIMON. Mr. President, I shall vote for the Kassebaum amendment, but I have to say I am doing it with real mixed feelings because it fails to address something that every higher education association favors, and that is direct lending. The colleges and universities in your States want direct lending. The bankers in your States and the guarantee agencies do not want it because they have a cushy deal going right now. The Kassebaum amendment is an improvement over the resolution as it is right now, so I will vote yes for it.

Mr. SIMON. Mr. President, I agree this is a step forward. But it eliminates--cuts down to 20 percent direct lending. This is, frankly, a brazen kind of pandering to the banks and the guaranty agencies. There is not a college or university in this Nation that has a direct lending program that does not want to keep it. And as our friend and former colleague, Dave Durenberger, said, ``This is not free enterprise, the old system, this is free lunch for the guaranty agencies and the banks.'' We write into the law their profit. In terms of the taxpayer, we wrote the budget resolution so that you would count the administrative cost for direct lending but not for the guaranty student program. CBO says, under current law, that leaving this 20 percent, as the Kassebaum amendment does, will cost the Nation $4.64 billion. All colleges and universities, again, who are in the program like it. It saves a huge amount of paperwork. Students like it, parents like it, taxpayers like it. The Kennedy amendment is budget neutral. We do not add to the deficit. Why are we doing something that colleges like, students like, and taxpayers benefit from? We are doing it for one reason and one reason only: To benefit the banks and the guaranty agencies. If we want to call this a bank assistance bill--and they have record- breaking profits right now--we ought to do that. If we want to call this an assistance to guaranty agencies, we ought to do that; but if we want to call it an assistance to students bill, then we ought to vote for the Kennedy amendment. Let me just point out that this idea came from Congressman Tom Petri, a Republican from Wisconsin. Dave Durenberger, Republican from Minnesota, was the chief cosponsor of this. This should not be a partisan thing. I hope Members on both sides will vote for the Kennedy-Simon amendment. It makes sense for everyone. I just appeal to you on behalf of America's students.

Mr. SIMON. Under the scorekeeping in the budget resolution, you say count the administrative costs for direct lending but not for the guaranteed program, and we asked CBO, how do you score it under current law? There is a savings of $4.6 billion under direct lending.

Mr. SIMON. Will my colleague yield for a question?

Mr. SIMON

Mr. SIMON. Mr. President, I rise in strong support of the education amendment offered by my colleague from Massachusetts. I glanced through this two-volume reconciliation thing this morning and I found all kinds of things. Here is a provision for the Hetch Hetchy Dam. I have no idea where the Hetch Hetchy Dam is or what it means. It has very little significance for the future of our country, but what does have significance for the future of our country is what we are doing in the field of education. The Presiding Officer may be too young to remember the GI bill after World War II. There was a fight on the GI bill. The American Legion, to their credit, said ``Let's have educational benefits as part of the GI bill.'' The other veterans organizations said, ``Let's have a cash bonus for veterans.'' Fortunately, the American Legion prevailed and we put the money into education. We lifted this Nation. Now we face the same choice. Do we have a tax loophole here that is being put in, which the Kennedy amendment says, ``Let's not put that tax loophole in,'' or do we put the money in education? The Kennedy amendment says put the money in education. I want to address specifically the question of direct lending. Let me say to my colleagues on the Republican side, this is not a Democratic idea. The first person that suggested it is Congressman Tom Petri, a Republican from Wisconsin. My cosponsor of this legislation in the U.S. Senate was Senator David Durenberger, a Republican from Minnesota. When he was approached and said we ought to have the free enterprise system work and have the banks and the guaranty agencies profit from it, Dave Durenberger said, ``This is not free enterprise; it is a free lunch.'' That is the reality. There is not a school in the country, not a college or university, that is on direct lending, that wants to go back to the old system. Colleges and universities like it, the students like it, taxpayers like it for reasons I will get into in a minute, and for my colleagues on the Republican side who say we like to do away with paperwork, I have heard speeches on both sides on that, every college and university says this does away with all kinds of paperwork. This is a change not just for a speech but for a vote. If the colleges and universities like it, if the students like it, if it is good for the taxpayers, why are we limiting direct lending? My friends, the only beneficiaries are the banks and the guaranty agencies and their lobbyists. And we have just seen in the newspapers that the banks have record-breaking profits. If we want to have a bank subsidy bill, let us call it that, but do not put the name of ``student assistance'' on it. Let us not play games. Who are these people who are fighting direct lending? The Student Loan Marketing Association, Sallie Mae, created by the U.S. Congress. The salary of the chief executive officer of Sallie Mae, 3 years ago was $2.1 million. All they do is student aid, guaranteed by the U.S. Government. The guaranty agency, one in Indiana, USA--the chief executive officer earns $627,000. We pay the President of the United States $200,000. And that one guaranty agency is spending $750,000 on lobbying on this. We face a choice. Are we going to help students and parents and taxpayers or the banks and the guaranty agencies? It is very, very clear. This is brazen, Mr. President, brazen. We have to help people. Indiana University says there is 90 percent less paperwork with direct lending, 25 percent fewer errors, easier adjustments, faster disbursement. I have heard a lot of talk about unfunded mandates around here. This is an unfunded mandate you are imposing on colleges and universities. Iowa State University, for example, testified they have been able to take four people who used to work in student loans because of the all the paperwork and everything, and have them do other things. And they have been able to cancel some of their computers that they have, for $400 a month. If I may have 1 more minute?

Mr. SIMON

Mr. SIMON. Thank you, Mr. President. I simply want to thank my colleague from Utah for moving ahead with this bill. We face problems in two districts in Illinois, and this bill takes care of their problems, among others. I appreciate the leadership of my colleague from Utah on this. Mr. SANTORUM addressed the Chair.

Mr. SIMON

Mr. SIMON. If each of us can have 2 minutes, if that is satisfactory to the Senator from North Carolina, that is satisfactory to me.

Mr. SIMON. Mr. President, I think if we can, before we vote--I understand we are going to vote at 4 o'clock.

Mr. SIMON. I will always yield to my colleague from North Carolina. Unanimous-Consent Agreement

Mr. SIMON. I yield 2 minutes to the Senator.

Mr. SIMON. I will simply add that we should make policy based on the national interest, not national passion. With what we are doing, our present policy is the opposite. I reserve the remainder of my time.

Mr. SIMON. Absolutely not. It is interesting that it is the same debate that we went through when we had the Soviet Union. Should we let Americans travel there? We finally made the decision that it might open up the Soviet Union if we would let people travel. And that was the right decision, and that is what we are asking for here. Let us make the right decision on Cuba.

Mr. SIMON. Mr. President, this amendment says simply that Americans can use what I think is a constitutional right to travel. We should not restrict travel to any country unless security is threatened, so that American citizens are not subject to simply propaganda from one side or from our Government. It is interesting that every other country in the world, so far as I know, permits its citizens to travel to Cuba. Only the United States of America does not. Listen to what President Eisenhower said: ``Any limitation on the right to travel can only be tolerated in terms of overriding requirements of our national security.'' President Eisenhower was right. The reality is Americans can travel to Cuba, but you have to go to Canada or Mexico or some other country to do it. We do not have the freedom the citizens of every other country in the world have, to travel to Cuba. It just does not make sense. I will add, the American Association for the Advancement of Science testified before the Senate Judiciary Committee on this question and pointed out that there have been scientific meetings, international scientific meetings held in Cuba, where our scientists have not been able to attend. It just does not make sense. In one case they were able to attend, but listen to this. In order to attend a meeting of the World Federation of Engineering Organizations, in Havana, beginning on October 17, 1993, they were first denied licenses, and then, ``Finally, members were granted licenses but not without long delays and the necessity of submitting themselves to a detailed screening process by Treasury Department officials.'' All kinds of needless paperwork. And not an American citizen who has gone to Canada or Mexico and traveled to Cuba has been prosecuted, sentenced to prison, or fined. It is just ridiculous, and we look ridiculous in the eyes of the rest of the world. This limitation on Americans to travel to Cuba does not do one thing in terms of pulling down the Castro regime. There is not a Member of the United States Senate who believes that Castro is doing what he should be doing for the people of Cuba. We do not like his human rights record. But I do not want to impose human rights restrictions on American citizens because he does it in Cuba. So my amendment simply would give American citizens the clear right to travel to Cuba.

Mr. SIMON. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Mr. SIMON. Mr. President, I see my distinguished colleague and friend, Senator Helms, on the floor. I think we each have 10 minutes to speak for our sides, in terms of the travel to Cuba debate. If the Parliamentarian gives us his OK, I will be pleased to move ahead and take part of my 10 minutes at this point.

Mr. SIMON. I would yield back the remainder of my time.

Mr. SIMON

Mr. SIMON. Mr. President, our parliamentary situation now I believe is that I have 2 minutes to speak on behalf of my amendment and my colleague from North Carolina has 2 minutes to speak in opposition.

Mr. SIMON. Mr. President, this is a fairly clear and simple issue: Do we follow the advice of people like President Eisenhower who said, ``Any limitation on the right to travel can only be tolerated in terms of overriding requirements of our national security.'' Americans can travel to North Korea and China. Name the dictatorship anywhere, we can travel there. The one country we cannot: Cuba. Citizens of every other country in the world can travel to Cuba, but Americans cannot do it legally. Now, we can go by way of Mexico or Canada and violate the law and do it, but that should not be the way we do things around here. It is very interesting that in the Soviet Union we had this same question: Should we cut them off and isolate them, or should we have American visitors who go there and help to ameliorate their policy? We, fortunately, made the right decision that Americans could travel there. That should be what we do today. Americans ought to have the right to travel anywhere where there is not a security risk for Americans. That ought to be part of the freedom that every American has. Mr. President, I know there will be a motion to table. I hope, despite that motion, the amendment will be agreed to.

Mr. SIMON. Mr. President, the assistance to Castro in terms of economic terms is almost nil. What this amendment does is give Americans the freedom that citizens in every other country in the world have: To travel to Cuba. I think that ought to be a basic right of Americans--to travel to any country where there is not a security threat.

Mr. SIMON. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded. [[Page S 15323]]

Mr. SIMON

Mr. SIMON. Mr. President, Roger Flaherty, now an editor at the Chicago Sun-Times, has followed the Federal student loan program for a number of years. I would urge my colleagues to consider what he has to say about the role of special interests in the current budget debate. I ask that an article that appeared in the Chicago Sun-Times on September 27, 1995, be printed in the Record. The article follows: [From the Chicago Sun-Times, Sept. 27, 1995] Special Interests Hit Direct Loan Program Head-on (By Roger Flaherty) When I was younger, I walked side by side one day with Wilbur Mills, the Arkansas Democrat then always described as ``chairman of the powerful House Ways and Means Committee,'' asking about tax reform. In a moment of candor, he said, ``If you want to reform the tax system, you've got to end all deductions.'' Why not do it? I asked. Mills responded with a dismissive look--sort of sneer and condescension--and turned to another reporter. So I learned that Washington people don't do as they think or say. We should keep that in mind as the Congress plows into a fall agenda that promises more moves to ``get government off our backs.'' Like tax deductions, government-run programs are bad until they are good for you or your friends. You usually hear this truism about defense contracts and farm subsidies. But there's one I've observed closely in recent years--the student loan program. Several years ago, along with Sun-Times reporter Leon Pitt, I uncovered enormous abuses by for-profit trade schools that were using student loans like government vouchers they could squander any way they chose. They enrolled students into programs they were unable to complete or that were so poor in quality as to be useless. When students dropped out, within hours sometimes, the schools kept the loan money in violation of the law. The United States was being defrauded of billions of dollars. But when reformers tried to tighten loan rules, school industry lobbyists fought them, arguing the reforms were an assault on free enterprise. It was a strange argument, considering that these schools generally received more than 90 percent of their income from government loans and grants. Well, that odd assertion is again being made in Congress, where conservative Republicans under the guise of getting government off our backs are attacking the direct student loan program. The program, which is scheduled to be phased in over several years, operates successfully at several Illinois institutions, including the University of Illinois. The program allows loans to be made directly from the federal treasury through college financial aid offices. This is bad, congressional opponents say, because it furthers big government and hurts [[Page S 15367]] business. How ingenuous can you get? Under the old loan system still being used by most schools, a student applies to a bank for a loan. Checking his or her qualifications is a loan guarantee agency, commonly run by state governments, but also by private enterprise. The agencies then issue a guarantee of repayment to the banks. The federal government pays banks subsidies to forgive part of the interest payments and pays fees to the guarantee agencies for their services. If a student defaults on a loan, the bank is reimbursed-- making student loans the safest loans a bank can make. Loan guarantee agencies are paid fees to hound defaulters. Is this not big government? Can this be free enterprise? There's more. The old system created a secondary loan business, including the huge public-private Sallie Mae association based in Washington, and smaller ones, like one operated by the Illinois Student Assistance Commission. These groups make money by buying loans from banks and packaging them in large blocks for resale. They were created by Congress and the states to free money for more student loans, but as was said of some missionaries to Hawaii, Sallie Mae and its emulators came to do good and ended up doing well. They are big businesses with highly paid executives. The direct loan program, a plan advanced by Sen. Paul Simon (D-Makanda), eliminated this entire pyramid. No government subsidy or risk-free lending for banks, no government payments to loan-guarantee agencies, no Sallie Maes with executives paid from profits extracted from government loan subsidies. But odds are increasing that Congress this fall will stop the direct loan program in its tracks, led by the same people who claim they are trying to get government off our backs. And so far, it seems to be going down like a cold, sweet Coke on a hot summer's day.

Mr. SIMON

Mr. SIMON. I, frankly, have presented the cause. It is not complicated. So I am willing to yield to my colleague. I probably would like 2 minutes to respond to whatever he might have to say, and then we could recess and each have 10 minutes tomorrow morning.

Mr. SIMON. Mr. President, I will be very brief in response to my friend. I could buy his arguments on assisting with hard cash if there was any consistency to our policy. We do not follow that in China. The Senator from North Carolina and I agree, we do not like the government that is in charge in China. We do not follow that in North Korea. We are in agreement, we do not like the Government of North Korea. You can list a number of nations and, in terms of security, frankly, Cuba is less of a long-term threat than China is, for example, in terms of security. So I think that argument simply is not valid. The second basic thrust is, somehow we can isolate Castro. That has been our policy for the last few decades and, obviously, it has not worked. I think it makes much more sense to try to open up Cuba and to also keep in mind that, if tomorrow Fidel Castro should die of a heart attack or something happen to him, we ought to be preparing the ground so the successor government is a free government, is a democracy. That is in our interest. That is in the interest of the people of Cuba. Under the present law, theoretically--I say theoretically because any American who wants to get around this can do it very easily by giving some money to a Mexican airline or a Canadian airline, and a great many other countries. But you cannot travel directly from the United States to there, and people who have relatives cannot visit the relatives. And human rights organizations, like Amnesty International, which would go there and be critical of the Castro record on human rights--which is not a good record--are not permitted to do so. I think we would be much better off if we said to Americans that-- unless you have a physical threat--Americans can travel wherever they want so that we do not have to follow some Government line in terms of how we get information. I think it is a basic freedom that we ought to have as Americans. I hope the amendment can be adopted. I do not want to prolong this. I know the Finance Committee wants to meet. I yield to my friend from North Carolina. Mr. HELMS addressed the Chair.