Budget and Accounting Transparency Act of 2014

Floor Speech

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Mr. Speaker, I yield myself as much time as I may consume.

Let me say at the outset that we welcome any proposals to improve the budget process, but it is a mistake to suggest that simply tinkering with the budget process will somehow solve our problems.

The bigger issue in the Congress has been an unwillingness of many people to compromise, and at the end of the day, in order to make budgets work, you have to have give-and-take. So, for example, the reason we saw our government shut down last October had nothing to do with the budget process. It had to do with the fact that our Republican colleagues said they were going to shut down the government as a means to try and shut down the Affordable Care Act, to shut down ObamaCare.

It was clear that that was not going to work. We are not about to strip millions of Americans from the new insurance protections they have. Despite that, our colleagues pursued that strategy, and we saw 16 days of unnecessary and unproductive government shutdown. That was not a problem of process; it was a problem of politics.

Now, with respect to this bill, I would say to the gentleman from New Jersey that, if your bill were limited to bringing Fannie and Freddie on budget, we would join you. We would welcome you in that. But, as you know, this bill does much more than that. In fact, it fundamentally changes the way we account for credit programs, Federal credit programs, including things like the student loan programs.

Now, the gentleman from New Jersey mentioned the impact on the FHA. A couple years ago--I think it was 3 years ago--on the Budget Committee we actually had a hearing on this subject. This bill was then on the floor in 2012. At that time, many of us said that, before we consider the other changes that this bill proposes, at least we should have a hearing in the Budget Committee to determine what the impact will be on student loan programs, Small Business Administration programs, veterans loan programs, at least we should have that information. Yet 3 years have gone by. We are now back with the same bill on the floor with no hearings to try and judge what impact it would have on student loan programs.

I want to mention the student loan programs in particular.

The gentleman said that the President had ``nationalized'' the student loan program. Let me just translate what that means. It had been that the big banks were essentially a conduit for all of our student loan programs. They were taking very little risk, but they were pocketing big profits just as a middle man, a middle man without risks but taking the profits. So Democrats proposed that we go to a direct loan program to try and make sure the taxpayer dollar actually did what we hoped it would do, which was provide more students with loans to help more of them afford college. So, yes, we got rid of the middle man and we used the savings to try to increase--and in fact, did increase--the amount of funds available so more students could afford to go to college.

Now, this bill comes along, and it would actually change the way we account for student loans, to artificially make those student loans look more expensive on the budget than they would otherwise be from a budget perspective.

Now, maybe this isn't surprising. After all, just last week in the House Budget Committee, we debated the House Republican budget. In fact, that Republican budget is going to be here and debated on the floor of the House tomorrow. We will start debate on that budget. That budget significantly cuts the student loan program. So one of the things it does is it charges students interest on their loans while they are still in college.

That is about $41 billion of additional interest costs they put onto students. At the same time, in their budget, they protect special interest tax breaks for hedge fund owners, big oil companies and the like. So that is what their budget does.

Now, this piece of legislation would address that from a different direction. It actually would artificially increase the cost on the budget books of student loans going forward.

Let me just read from a letter from a Dr. Reischauer, who was the former head of the Congressional Budget Office. He writes:

The accounting convention used since enactment of the Credit Reform Act of 1990 already reflects the risks that borrowers will default on their loans or loan guarantees. Under Credit Reform, costs are already based on the expected actual cash flow from the direct loans and guarantees. This bill proposes to place an additional budgetary cost on top of the actual cash flows.

Then he goes on to point out that that may be something that Members want to consider during debate, but to actually put that artificial inflation in the budget actually is potentially misleading to people who are looking at the budget.

So, like so many bills around here that are misnamed, this one, named the Budget Transparency and Accountability Act, actually reduces budget transparency by putting in the budget a cost for student loans that is actually artificially increased.

I would suggest to my colleagues that we reject this particular proposal.

Again, if the gentleman had brought to the floor a bill that simply put Freddie and Fannie on budget that would be fine. But this bill actually is a vehicle to inflate the actual costs of things like student loans, at the same time where we have a Republican budget coming to the floor that actually cuts those student loans.

At this point, Mr. Speaker, I ask unanimous consent that the balance of my time be controlled by the gentleman from Kentucky (Mr. Yarmuth).

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