Washington, D.C. - Democratic Leader Nancy Pelosi and Congressman Xavier Becerra, Vice Chair of the House Democratic Caucus, held a student loan affordability roundtable and press availability at Occidental College in Los Angeles. Below are the Leader's opening remarks and a transcript of the availability:
Leader Pelosi Opening Remarks:
Thank you very much, Congressman Becerra, for your kind introduction, for your invitation to be here today, for your tremendous leadership in the Congress of the United States. This district is very well served and well led by your leadership in the Congress. Congressman Becerra is the Vice Chair of the House Democratic Caucus, he's a powerful Member of the Ways and Means Committee, and because he has the confidence of his colleagues in the Congress, has served on every budget discussion that we've had - whether it was Simpson-Bowles, whether it was the Biden group, whether it was the Supercommittee that met toward the end of last year. In every coming together, we wanted our very best on the committee, most knowledgeable, values-based person who, again, had the confidence of our colleagues to make the difficult decisions. And these decisions are difficult.
I want to thank President Veitch for his leadership. I'm so impressed by what he has to say about a third of the budget going for student aid and the other statistics that he put forth demonstrating Occidental College's commitment to making this magnificent education available to many more students. I'm delighted to be here, also, at this time because it is the 125th anniversary year of Occidental College, and I'm particularly happy because it started as a co-ed college 125 years ago. Think of the vision - 27 men, 13 women, I understand, and that when they came together two of the first graduates were women from this college. And, of course, a recent student here in modern history - our President Barack Obama - all of this a source of great pride to this college.
So, thank you to the leadership and courage of the founders. Thank you for how you carry on that tradition. I'm honored to be here listening to Juan German. Listening to his situation and the opportunities he has speaks to the excellence of the education and the faculty here at Occidental and how proud we all are of your success.
Spencer's exactly right: this isn't about politics; this is about people. This bill that we passed five years ago that is expiring now, that we want to renew, was passed in a bipartisan way in 2007 when the Democrats came in. We put it forth. The Republicans joined us, President Bush signed it. Subsequent to that, we've had other bills. The G.I. Bill for the 21st century to welcome our veterans home by sending them to college, saying thank you in that way, and other legislation that has made college more affordable and accessible to students.
And now we come to a place where there seems just to be a separation. We've come to a budget that says: “we're going to cut 400,000 kids off of Pell Grants, we're going to reduce the amount of the Pell Grant to millions more students, we're going to let the 3.4 percent interest rates double,” and without getting into it, the list goes on. And that's just really unfortunate because the fact is that you don't save any money by cutting investments in education. Nothing brings more money to the treasury than investments in education - early childhood, K-12, higher education, post-grad, lifetime learning - it all brings money to the public treasury. So to say, we're going to cut education to reduce the deficit has it upside down.
The other part of it is, I think we have as a country a consensus, a moral imperative even, to educate our children, to prepare for our future, for their self-fulfillment and for our being number one in the world, continuing to be number one. Central to that is the creation of jobs for them when they leave school and central to that is growing the economy in a way that will do that. We know we must reduce the deficit and we're committed to that. We say invest for growth, as we make some - establish priorities, make some cuts but also put revenue on the table. Why should the wealthiest people in the world, per [the Ryan-Republican budget], get a $400,000 tax cut per this bill while we're saying to students: “you're going to spend at least a $1,000 more on your interest, it's more like $2,500 more on your interest?”
So, 400 students to pay for $400,000 - at the lowest estimate. So, we ask the students, as we are all across the country: “help us with this, bring it to a debate of civility about what our priorities are.” Spencer is completely correct. This isn't about politics, it's about priorities and values of a nation but it's very - you talk policy, we don't want to talk politics, but it's about the third “P,” it's about the people, it's about the people and it's about the time it's going to take us - July 1st is the deadline. We need to have the most outside support for stopping this going in the opposite direction, which is to say student loans will cost more and that's just one manifestation of the challenge.
So, again, thank you ,President Veitch, for having us here, having representatives of so many of your neighbors in higher education come here with us today. It was very useful to hear the students and the administrators talk about the challenges we face - many of them solved by a better set of budget priorities that makes the education of our young people to reach their own personal aspirations and to keep America number one competitively.
Congratulations Juan. Good luck to you Spencer. And thank you all.
Question and Answer:
Q: Congressman, some have compared this with the housing crisis. Mark Cuban, the entrepreneur billionaire, had a blog the other day where he said that institutions like this aren't being funded by the taxpayers and at some point there is going to have to be a reassessment of higher education - there's got to be a business decision. Talk to us about the ramifications of student loans on the economy.
Mr. Becerra. I'll invite the Leader to comment as well. I think we all agree that we want to make sure that our higher education system in our institutions, the best in the world, continue to produce the next generation of leaders. I think, that as we go about that reform, we don't have to let students be the victims of an effort to try to figure out how to do this better. Why don't we figure out a way to get those students through? Try to make sure that we're working with the institutions. As President Veitch mentioned, so much of what they invest their money in goes into the various students that couldn't afford to come here otherwise and so, I think, if we have a transparent debate with the institutions present, with the policy makers present, with certainly those stakeholders - parents and individual students who are going to come to these universities and colleges - present that we could figure out the best way to move our higher education system forward. But as we do that, we need to remember that in 38 days interest rates are about to spike for some seven million students in America, some 570,000 students here in California. So, first thing's first: as we talked about the reform, let's make sure we don't let American families have to pay $1,000 more simply because Congress failed to act.
Q: To that degree, there are some who believe that the more federal money in subsidies, the higher cost of college tuition?
Leader Pelosi. Yeah, well we talked about that in the other room because the fact is that the value that we place is a priority on the real education of our young people, and the next generation, and including lifetime learning is not a priority - to say we're going to underwrite increases so that we have no value added. It's about sustaining the effort, additionally, and what can be provided for young people, but it's not to underwrite a system that isn't tightening the buckle. We all know that frugality - let's not use the word austerity because it's been given a bad word - but we have to subject everything we do to really harsh scrutiny, especially when there are federal dollars involved. But you have to do it in the private sector and the non-profit sector as well, and I believe that that is happening. I was [inaudible] by this saying: “let me just do this, that, or the other way, any way that I feel like doing it because the federal government is going to bail us out.”
Q: But it is a concern…
Leader Pelosi. Well, the maintenance of the effort, and what the federal commitment is, is a concern, yes sir, and it isn't a concern because we think things are running rampant; it's because we don't want them to run rampant.
Would you want to say something to this point, [Mr. Becerra]?
Here's the thing: we all have to - community, the American dream that is what we're about, reigniting the American dream, making success, building ladders of success for people who work hard and play by the rules and take responsibility. Play by the rules, then take responsibility, and one of the rungs of that ladder is, of course, education. Education, investment, reduce the debt - education of the American people strengthens our democracy. Education of our people enhances the lives [of those] who are educated and it increases our competitiveness internationally, to keep us number one.
So, we all have a vested interest in education, including the fact that it's going to reduce the deficit. Nobody is saying we want to put up money so that other people don't have to watch their budgets, you know that's not the point. Our Chairman, I'd love for you to meet Congressman George Miller, who was the Chairman [of the House Education and Labor Committee] for a while, now the Ranking Member, soon to be Chairman again, I hope, of the committee. Because this is a very, very important issue and it's important to our Members, and every time we say we want to invest in something, we have to subject what we're investing to, in the harshest scrutiny, as to whether - what are the kids going to get? It's about results. What are the kids going to get from this? So, to say that this is something almost - we've got to put a stop to this - I didn't catch the tenor of the remarks that were said.
Q: There is certainly a concern over obviously legitimate…
Leader Pelosi. Yeah, and our members have this at the table all the time because, again, it's about results for the kids. How is what we're doing in furtherance of enhancing their education, their prospects, our competitiveness? Not how are we going to be a slush fund for somebody who now is on easy street because we put up federal dollars, instead of strengthening what the value is, what the purpose is and the priority of the education of our kids are?
Q: President Veitch, could you elaborate on this?
Mr. Veitch. I have less admiration for Mark Cuban's comments than I do for his basketball team. I would say that the largest single lever for tuition increases is scholarship aide. That is crucial for people to understand why one of the reasons tuition goes up the way it does is so we can provide access to higher education to those least able to afford it. So, if you looked at our own budget, a third of our budget goes to financial aid. We put seven dollars for every dollar the federal government puts in for Pell Grants, five dollars for every dollar the government puts in for work study. So, the commitment on the part, and Occidental is not unique in that, on the part of these institutions is immense. We really do call it, and we know that we're putting pressure on middle class families and upper middle class families with our tuition, so there is no incentive for us to increase it [inaudible] and heedlessly in ways that he suggests.
Q: Perhaps if the panel could explain and clarify where the money for this is coming from? I know Republicans are saying it's just a tax increase on the businesses who won't hire these kids and there seems to be a lot of confusion or argument about that. Specifically, in maintaining this loan.
Leader Pelosi. Well, that is the debate that we're having in Congress right now. Everybody maintains that we believe that the 3.4 percent should not be increased. However, having said that publicly, the Republican budget enables the 3.4 percent to turn into 6.8 percent and makes the cuts in Pell Grants and all the rest we said, but let's just stay on the 3.4 percent, but that's only one part of it because there are all kinds of other issues. But just to say there, so we have said that one possible, or a couple possible places that you can go for the funding, one is that you can go to the subsidies to Big Oil. Big Oil makes over a trillion dollars this year and they don't need incentives to drill and you can take some of that money and use it to reduce the interest on student loans, to maintain the 3.4 percent, rather than have it go to 6.8 percent, and you can take some more of it and use it for deficit reduction at the same time. Do two great things at one time, make college more affordable and reduce the deficit.
The Republicans said “no” regarding the tax subsidies for Big Oil, the big five oil companies, while they're making historic, record-breaking profits every quarter. They make endless money and they say they need a tax incentive in order to make that money. The Republicans say: “let's take the money out of this fund that is part of the Affordable Care Act that provides health benefits for women, children, men too,” and we're saying “no.” We're trying to strengthen the middle-class. Education is a piece of it. Why would we take money out of something that helps them in terms of health, prevention, and the rest, in order to pay for education? That's just not right. And so we are fighting that and that's what it is. We're saying: “either take it out of the tax code, the wealthiest people in the country because their budget bill gives $400,000 tax cut to a person making 1 million dollars a year, while saying to students: ‘you have to pay more for your student loans.” Okay, if we agree they should pay more for their student loans, can we take some of the money out of the tax code for the rich, or can we take it out of some of the tax cuts, tax subsidies for Big Oil?
Ironically, they also say that if you give a tax break to wealthy people, it doesn't have to be paid for or offset. It can increase, but if you give an interest rate [cut] to students, you have to pay for it. So, that's what the debate is about.
[Mr. Becerra] is there anything you want to add to that?
Mr. Becerra. On that last point, first think about - this is the craziness of the debate in Washington D.C. The week before we had the debate on the floor on this issue of trying to extend the reduced interest rate for the student loans, which will cost about seven billion dollars, we had a debate a week before that. The week before that we had another debate. That debate provided for a 46 billion dollar one year, not over ten years, but one year cost of 46 billion dollar tax break that was going to go to businesses, which would include some of the wealthiest businesses in America. Millionaires would have been getting a tax break of several thousand dollars, tens of thousands of dollars, and the Republicans did not require that it be paid for.
So, whether that 46 billion dollar hole in the deficit in one year or ten-years, which is how we used to count things, half a trillion dollar deficit increase, they were willing to do that. They passed that bill in the House of Representatives. It was clearly a partisan vote; Democrats did not vote for that.
So, within a week of that, we have this student loan bill we want to pass, they said they want to pass, but they want to pay for it, as the Leader said, out of the health fund, prevention fund, for women and children and men. Now, what I want to make clear is this: you know in Los Angeles, there are very few places outside of L.A. that use community clinics more than Los Angeles for people to get health care. Most of that prevention money goes to some of the community clinics because it's the community clinics that perform most preventative health care services in communities like L.A., where folks who don't have good doctors go to get their health care, to cut the preventative fund, health care fund, would have said to these clinics: “you won't have the resources to accept these people to come in and get their health care,” which would have been, for L.A., as we've seen, using the emergency room to get the care, which they would not, those individuals would not be able to afford, and at the end of the day, guess what?
You and I, and everyone in this room, as taxpayers, would have had to cover part of the cost of that. So, that's what we're faced with and that's why it's so important to recognize that this is a values debate about your priorities. How you pay for something that all of us agree needs to be done.
Leader Pelosi. I think there is one other point that Congressman Becerra - Vice Chairman Becerra has taken us close to it, and it makes it easier to understand what this debate is about and that is the role of the public sector. If you do not believe that the public sector has a role in the education and the well-being of our people, then you want to cut all the taxes so that you are eliminating the resources to do that, and that is the debate that you see. On the floor of the House, on a regular basis, we see initiatives that say: “we don't want any enforcement of the laws for clean air, clean water, food safety, public safety, public education, public transportation, public housing, public health, Medicare, Medicaid, Social Security.” If you don't believe there should be a federal role, of course it's consistent to give tax cuts to the wealthiest in our country instead of supporting a federal role.
Now, we don't want any more government than is necessary but we do know that public-private partnerships, non-profit involvement, that's the history of our country. We are a community, a community but if you don't understand, why would they want to cut taxes for the rich and not help health care and education for the middle class? It's because they don't believe in the public role and that is part of the debate. If you are ideologically anti-government, it would follow that you don't support any of this and in fact, you want to reduce the funds that come to the federal Treasury. So, that is part of the debate we are in now. Most people in our country, I think, would believe in the fact that we should educate our children, we should create jobs, we should have health and income security for our seniors. We should have safe, clean neighbors to thrive in, and we should have a world at peace for us to all reach our fulfillment, done in a fiscally sound way to reduce the deficit.
Nothing brings more money to the Treasury than the education of the American people and that is the debate we are having in a bigger sense. But July 1st is the day these interest rates will double. We need the input of young people and those that care about them and their future to help us stop the increase in the interest rate and all the rest that comes with it in the package, in the budget package, and that's what the rest of the debate will be on July 1st.
Q: How long is the extension? Is there a sunset on the extension?
Leader Pelosi. It depends on how much money will be [inaudible].
Q: [In Spanish]
Mr. Becerra. [Replies in Spanish]
Q: Maybe you'll want to say that in English too, please.
Mr. Becerra. Sure, the question was if we're willing to bailout banks and Wall Street, why wouldn't we also be willing to help students who want to be able to afford their college education?
And I simply said that its absolutely the case that if we're willing to bailout a bank with taxpayer money then wouldn't we want to bailout the future president of that bank by providing them with accessible and affordable college education that will make it possible for that person, that young man or woman, to become the next leader of this country? Whether it's president of the bank or President of the United States.
Leader Pelosi. And I just may say on that score - thank you [Congressman Becerra] for interpreting for us and for your leadership in the response. It's time for the middle class. We've bailed out the banks. We've had recklessness by some on Wall Street causing joblessness on Main Street and the taxpayer had to pick up the tab. Hundreds of billions of dollars. Privatize their game - when these banks were doing well they pocketed, the individuals didn't. When they're not doing well the taxpayer has to nationalize the risk. So we had to put up the money. It's just not right. It's time for the middle class, the middle class and all who aspire to it.
It's really important for us to grow our economy because jobs are the answer to so much of this. So that families can afford more. So they're paying, they're earning, they're contributing in terms of the tax base of our states, to support the education of our children both from the standpoint of the state and from federal government. So, turning up the economy, creating jobs, honoring the entrepreneurial spirit of America - small business being the creator of jobs. They're saying we have to give tax cuts to the rich because they're the job creators no, small businesses are the creators of jobs; the middle class is the creator of jobs. This is all lopsided and it has to be focused and the facts have to be respected. And that's the fight that we're in now. But the question that the gentleman asked was a question that every person in America says - it's like the man in the moon question: “we can put a man on the moon, how come we can't do this, this, this and this?” If we can bailout the banks, why can't we educate our children? Why can't we have community health service for our people? And the list goes on.
But again, we're at a very respected intellectual arena here at Occidental College. Where I'm sure all views are respected and honored and we all benefit from that challenge to conscience, challenge to the intellect, challenge to the leadership, especially of future generations. So, thank you again, President Veitch. Thank you.