Skip to Content

STATEMENT ON THE HEALTH CARE AND EDUCATION AFFORDABILITY RECONCILIATION ACT OF 2010

Wednesday, March 24, 2010

Today we took a historic step forward toward a healthier America.  I’m proud that the Senate is debating the reconciliation bill today, fulfilling our pledge to make some crucial adjustments to the Senate bill we passed in December.

 

The reconciliation bill before us will make the newly-minted health reform law even better.  It will provide stronger subsidies for low- and middle-income working families so they can afford insurance, and that means fewer people getting primary care in emergency rooms.  It will limit the number of families affected by the excise tax on high-cost plans and address geographic disparities in Medicare.  And it will finally close the Medicare prescription drug “donut hole” so seniors no longer will have to choose between eating or taking their medicine.

 

But let’s be honest – even with these changes, it still isn’t perfect.  And we’ll continue to improve it, because there are always things that we can’t foresee.  Look, we’re still making adjustments to Medicare, forty years later.  And when Medicare passed, there was also ample opposition, not dissimilar to what we’re hearing about this bill.  Opponents said Medicare would be a government take-over of health care.  But today, you won’t find a single senior in Minnesota who wants to give up their Medicare. 

 

In fact, just in these past few months, I’m pleased that so many of my colleagues on the other side of the aisle have spoken out in favor of strong benefits for seniors.  And I’m confident that, like Medicare, support for health reform – which is already strong – will continue to grow with time as people understand just how helpful it will be for working families.

Unfortunately, many people have been scared by the misinformation that’s been used to try to defeat reform.  For example, there’s an important point that’s been lost in the overblown and apocalyptic rhetoric these past months – this bill is not a government takeover of health care.  In fact, it’s an expansion of private coverage, with millions more Americans covered by private insurance companies.  

 

So let me say this again—the Patient Protection and Affordable Care Act expands private insurance.  And since we’re giving these companies a huge influx of business, we have to hold them accountable.  And we do that by improving regulation of these companies, by making sure they keep patients as their top priority.  Our bill ends pre-existing condition exclusions.  No more lifetime and annual caps.  Mental health services will be covered.  And companies won’t be able to kick people off their plans when they get sick.

The truth is that in my state, there are a lot of good things happening in health care already.  But even in Minnesota, we need help.  We’ve got people who can’t afford their coverage, rising costs, and a huge state budget deficit. 

 

I support this bill because it helps Minnesota in all of the ways we need right now – incentives to advance state innovation, and instant relief  to help cover low- income Minnesotans in Medicaid.  This is really helpful at a time when the state legislature is struggling to make ends meet.  And for Minnesota small business owners who are stretched but want to cover workers, they will have access to tax credits this yearIn 2010.  I’m also very pleased that this bill will begin to fix one of the most flawed elements of the current system—Medicare reimbursement.

Our current system punishes high-quality Minnesota providers – like the Mayo Clinic – by paying them less because they provide efficient, lower-cost care.  The Senate bill includes provisions I fought for with my colleagues Senators Cantwell and Klobuchar to reward value – not volume – in Medicare.  

 

And now – thanks to my colleague Representative McCollum from Minnesota – we also have a commitment from Secretary Sebelius to continue to expand these efforts to hospitals and nursing homes. 

 

I’m proud to represent Minnesota at this historic time and to have contributed to improving the health of this country for future generations.  Our new law, improved by the reconciliation bill, will be a major victory for Minnesota families.

But if this reconciliation bill passes, we’ll also be scoring a double victory for working families.  In addition to expanding access to health care, this bill will make it less expensive for working families to send their kids to college.  By cutting out the middleman from the student lending system, we’re able to increase funding for Pell Grants and make it easier for college graduates to repay their loans.  Not only are these measures fully paid for, but we’ll also reduce the deficit.

 

Under the current Federal Family Education Loan Program, or FFEL, the federal government pays lenders enormous subsidies to entice them to lend to students.  Then on top of that, the government guarantees the loans so there’s virtually no risk for the banks.  Just taxpayer-subsidized profits.

 

This is not a private enterprise program, as the banks would like you to believe. It’s corporate welfare masquerading as private enterprise.

The good news is that there’s a better way to run the government loan program than keeping banks on the dole.  It’s called Direct Lending, and it slashes 61 billion dollars in costs by cutting out the middleman and lending to students directly.

 

This idea is hardly new.  In the early 1990s, Senator Dave Durenberger of Minnesota joined with Senator Paul Simon of Illinois in a bipartisan effort to end the wasteful practices of the bank lending program.  They were able to give colleges the option of switching to Direct Lending, but the bank lobbyists thwarted their efforts to eliminate the bank subsidy program altogether.

 

Today, I’m proud to be continuing Senator Durenberger’s fight to eliminate wasteful bank subsidies.  I’m also proud that the University of Minnesota is leading the way.

 

The University of Minnesota, or U of M as we call it, was one of the first universities in the nation to switch to Direct Lending.  I recently met with students and administrators at several U of M campuses, and they told me that the Direct Lending program is working well.  Not only does it provide students with the same benefits as the bank subsidy program at a lower cost, but it also reduces the administrative headache of financial aid officers by decreasing the number of entities they have to deal with.

 

To be blunt, our choice here is simple: We can continue to waste billions of dollars to line the pockets of the banks, or we can use that money to help low-income and middle class kids go to college.

 

I certainly don’t want to go home to Minnesota next week and explain to my constituents that the Senate decided to keep forking over their hard-earned tax dollars to banks rather than help their kids go to college.

And for many families, it really is the opportunity to send their kids to college that’s at stake here.  Most of the money that would be saved from switching to Direct Lending would be used to strengthen the Pell Grant.  Pell Grants give over 8 million low-income and middle-class students the opportunity to realize the dream of attaining a college education.

 

Pell Grants hold a special place in my heart because of the opportunity they gave my wife Franni and her family.  When Franni was 17 months old, her father died in a car accident, leaving Franni’s mom widowed at age 29 with five kids.   My brother-in-law Neil went into the Coast Guard, where he became an electrical engineer.  But all four girls went to college, and they were able to do it on a combination of scholarships and Pell Grants.

 

Unfortunately, since then, the purchasing power of the Pell Grant has declined dramatically.  Thirty years ago, the maximum Pell Grant covered 77 percent of the cost of attending the average four-year public college.  These days, it only covers 35 percent.

 

And this economy has made a bad situation worse.  Many of the students and families I’ve met in Minnesota are struggling with high tuition and a tough economy.  The average Minnesota student graduates from college with over $25,000 in debt.  Job losses and cut backs have left many middle class families barely hanging on.  That  means that more students who depend on Pell Grants have to spend more hours at work and away from their studies to help pay for their education.

 

Unfortunately, the economic crisis has also increased the demand for Pell Grants, as more families have fallen on tough times.  The increase in demand has left us with a 19 billion dollar shortfall in the Pell Grant program.

If we don’t fix this shortfall, nearly 600,000 students could lose their Pell Grants entirely.  Another eight million students could have their grants cut by almost 60%.  This would be catastrophic for those students and their families.

 

In this economy, it would be an unforgiveable failure for Congress to allow Pell Grants to be cut in half.   It would also be shortsighted, since we know that within a decade, 75% of all new jobs will require a college education.  A national switch to Direct Lending is simply the right thing to do for our students, for our families, and for our economy.

 

So I want to urge my colleagues to stand up for what’s right, and support this reconciliation package that further improves our health care system, puts kids in front of banks, and reduces the deficit.

 

Thank you, and I yield the floor.

Duluth Office
515 W 1st St
Suite 104
Duluth, MN 55802
(218) 722-2390

NW Mobile Office
Valerie Gravseth
NW Field Representative
(218) 230-9487

Saint Cloud Office
916 W St. Germain St.
Suite 110
Saint Cloud, MN 56301
(320) 251-2721

Saint Paul Office
60 East Plato Blvd
Suite 220
Saint Paul, MN 55107
(651) 221-1016

Saint Peter Office
208 S Minnesota Ave
Suite 6
Saint Peter, MN 56082
(507) 931-5813

Official Web Site of Sen. Al Franken
Text Only   |   Privacy Policy   |   Contact