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Tag Archive | "Senate"

Student loan bill a difficult but necessary step


By Sen. Carl Levin

 

The Senate recently faced a very difficult choice. When a July 1 deadline passed, the interest rate on federal student loans was set to double. American students and parents who worry every single day about whether they can afford college cannot be burdened with such an enormous rate hike. The Senate approved legislation to temporarily resolve this crisis, but left the door open to future rate increases. I voted in favor of this legislation, but I also favor action to avert future rate increases.

The cost of tuition at public four-year colleges is up more than 15 percent since 2009. Student loan debt has reached historic proportions. And yet we allowed the rate on new federally subsidized student loans to double, to 6.8 percent, as of July 1. If we had allowed this rate increase to continue, we would have subtracted thousands of dollars from the wallets of American students and their families or, worse, pushed college beyond the financial means of some families who already wonder whether they can afford to give their kids the education they need and deserve.

The bipartisan legislation we passed in late July will provide relief. But it is far from perfect. It switches these interest rates for these critical student loans from fixed rates to floating rates with caps that are far too high. This opens the door to rising interest in the future that students and their families simply cannot afford.

The student debt problem, which for many families is a student debt crisis, requires a carefully considered long-term solution. I am hopeful that such a solution will eventually emerge. But this legislation is not it.

That is why I supported an amendment offered by my colleagues, Sen. Jack Reed and Sen. Elizabeth Warren, and another amendment offered by Sen. Bernie Sanders, that would have mitigated some of the long-term damage of this legislation. Even though we did not adopt those amendments, I supported this bill for the simple reason that it removes the immediate burden facing America’s students and their families.

The chairman of the Senate Committee on Health, Education, Labor and Pensions, Sen. Tom Harkin, has pledged to try to fix the likely spiking interest rates facing students when a higher education bill comes up next year. I will strongly support that effort.

We in the Senate had a choice. But America’s college students do not – they have no choice but to pay the ever-rising cost of a college education, not if they want the skills and knowledge that hold the promise of a better life. They have no choice but to live with the decisions we make in the Senate, and that’s why I supported this legislation to avoid a doubling of student loan interest rates that our families simply can’t afford.

Carl Levin is the senior U.S. senator from Michigan.

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Review shows need for reform of overseas basing costs


By Sen. Carl Levin
Recently, the Senate Armed Services Committee, which I chair, completed a year-long investigation into the costs of maintaining our nation’s overseas military presence.  The investigation produced a bipartisan report that reaches some troubling conclusions.
I directed the review of our costs in Japan, South Korea and Germany. Together, those countries account for 70 percent of the roughly $10 billion we spend each year on overseas bases – a figure that doesn’t include personnel costs to pay and take care of our troops and their families.  All three countries are also key U.S. allies. In order to better sustain our presence in these important locations, we need to understand and control our costs.
Our review found that contributions from our allies are failing to keep up with rapidly rising costs, increasing the burden on U.S. taxpayers. At the same time, allied payments are increasingly coming as in-kind , rather than cash payments.
This shift to in-kind payments makes it harder to monitor how funds are used.  In fact, our review found that, in many cases, in-kind payments are spent without proper oversight, congressional notification or approval.   In some cases, in-kind payments are being used for projects that simply aren’t necessary.
Cost increases and the use of funds on projects that aren’t mission critical are unacceptable at a time when there is incredible pressure on the defense budget and the federal budget as a whole, and when cutbacks to bases in the U.S. are under debate.
Our review found that South Korean contributions are not keeping pace with the growth in U.S. costs. While South Korea’s estimated contribution grew by about $42 million between 2008 and 2012, U.S. costs increased by more than $500 million.
Japan’s contributions also have not kept pace with U.S. costs.  For example, at its peak in 1992, Japan’s contribution to funding for infrastructure and facilities amounted to more than $1 billion. That figure has fallen by 80 percent.
Our use of in-kind payments from South Korea and Germany is especially worrisome.
South Korea’s contributions to a program that supports the construction of U.S. military facilities amounted to about $339 million in 2012 alone – all of it in-kind. But projects built using these in-kind contributions are not reviewed at all by the Department of the Army and only undergo limited review at higher headquarters or at the Pentagon. Congress isn’t even notified, let alone given a chance to review and approve these projects. That lack of oversight increases the chance that funds will go to non-essential projects. In fact, our review found that plans for using in-kind contributions include a $10.4 million museum.
In Germany, we receive in-kind payments as compensation for facilities that we turn over to the German government as we reduce our military presence there. We found millions of dollars of in-kind payments from Germany earmarked for projects that simply don’t make sense. For example, $200,000 was spent on sunroom additions for senior officer homes.
We also have to take a hard look at the cost of our future commitments.
In South Korea, the Army has proposed a public-private venture to build housing for military families that, if approved, would add hundreds of millions of dollars to our costs. Setting aside questions about the wisdom of bringing additional families in the region while North Korea continues its belligerence, the plan is simply not affordable.
The Defense Department is also planning a series of troop movements in the Asia-Pacific region. We found that rough estimates provided for some items in the plan are highly speculative and do not account for potentially significant additional costs. Congress already has barred most spending on these projects until the Pentagon produces more detailed and useful estimates, and our review found no reason to set aside those conditions.
The military should always be careful with taxpayer dollars. There is never a good time for large construction projects to go forward with little or no oversight. But at a time when the military, and the entire federal government, are facing significant budget cuts, cuts that will damage our national security and important domestic programs, the current situation is simply not acceptable. I’m working with my colleagues on the Armed Services Committee to develop reforms that will increase oversight and help ensure that we only spend money on projects we really need.
Carl Levin is the senior U.S. senator from Michigan.

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More progress in the fight against tax abuses


By Sen. Carl Levin

 

In March, the Senate passed a budget resolution. This blueprint for the fiscal year that begins in October represents an important step forward on an issue of great significance to American taxpayers: the need for balanced deficit reduction.

An important part of balanced deficit reduction is reducing the deficit without severely damaging important protections for and investments in American families. One way to do that is by ending unjustified tax loopholes and ending the damage they have inflicted on our budget. The budget summary released by Sen. Patty Murray of Washington, the chairman of the Senate Budget Committee, decried “the sheer magnitude of the revenue lost to off-shore tax abuse, wasteful and inefficient loopholes, and other business tax breaks.”

For many years as chairman of the Permanent Subcommittee on Investigations I have focused on the maze of offshore schemes and complex gimmicks that are concocted to allow a privileged few to avoid paying the taxes that they owe. Our subcommittee has, on a bipartisan basis, filled volume after volume with damning detail on how these schemes work and the damage they cause.

Now we are at a moment in history when we can remove this blight. The pressures on the federal budget and the threat to economic growth and prosperity that they represent require action. We must close these loopholes. The relentless arithmetic of our budget situation compels it; fairness and justice demand it.

During the budget debate, a number of senators joined me on the Senate floor to speak about the need to close tax loopholes. We outlined the preposterous contortions that too many corporations and wealthy individuals employ to avoid paying taxes, and how those contortions contribute to a shift in the tax burden from corporations and the wealthy to middle-class families and small businesses.

The case for additional revenue and for closing tax loopholes as a source of that revenue is overwhelming. Serious deficit reduction requires more revenue, as everyone from the Simpson-Bowles Commission to the Domenici-Rivlin task force to the Concord Coalition to Fix the Debt, has recognized. Federal revenue remains significantly below its historic average as a percentage of the gross domestic product of our economy, and that revenue is, and under current trends will continue to be, below the levels we have needed in the recent past to balance the budget.

In particular, the loss of corporate tax revenues is an ongoing cause of deficits.  In 2006, corporate tax revenue made up about 15 percent of all federal revenue. In 2012, it had fallen to 10 percent. Somebody has to pick up the slack. In this case it has been average American families.

Why is corporate revenue a shrinking share of our Treasury even though the U.S. corporate tax rate, at 35 percent, is one of the highest in the developed world? It is because the top tax rate doesn’t tell the story. While our tax rate at the upper limit is 35 percent on corporations, the average U.S. corporate taxpayer’s effective tax rate was just 12 percent in 2011, which is the lowest in generations.

A recent study by two think tanks found that 30 of our largest corporations with combined profits of more $160 billion paid no income tax, zero, from 2008 to 2010.

The Permanent Subcommittee on Investigations outlined in a report last year how three U.S. companies—Apple, Google, and Microsoft—used offshore gimmicks to avoid taxes on almost $80 billion in profits.

But momentum is building to stop these abuses. Earlier this year, Sen. Sheldon Whitehouse of Rhode Island joined me in introducing the Cut Unjustified Tax Loopholes Act. Our bill would help address some of these tax schemes and others as well. It is a powerful weapon in our deficit-reduction arsenal if we will use it.

During the budget debate, Sen. Whitehouse and I were joined by Sen. John McCain of Arizona in introducing a bipartisan amendment recognizing the need to close corporate tax loopholes. The Senate approved our amendment, putting the Senate on the record on the need to end offshore tax abuses by large corporations.

We can’t afford these loopholes. We can’t afford the budget deficits they help cause, and we can’t afford the damage they do to ordinary families and small businesses. I’ll keep working to strengthen the momentum for reforms that end these abuses.

Carl Levin is the senior U.S. senator from Michigan.

 

 

 

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After a year of challenges, more work to do in 2013


_V-LevinBy Sen. Carl Levin

The Senate returned to the Capitol this month after a turbulent 2012. In the areas our citizens look to us to address—boosting economic growth and job creation, building a foundation for long-term competitiveness, protecting our environment and our national security—we overcame some major challenges and made some progress in 2012, but delayed many of the tough decisions until 2013.

We ended the year with a debate over the “fiscal cliff,” and while we avoided the potential economic catastrophe of going over the cliff on Dec. 31, we only temporarily delayed draconian automatic spending cuts that will kick in early this year if we can’t reach another agreement to avoid them.

One way we can bring down the deficit while avoiding those damaging cuts is to close some egregious corporate tax loopholes.

Over the last year, I’ve fought for changes to bring down the deficit and make the tax code fairer. For example, we should end the tax loopholes and accounting gimmicks that allow companies to give lucrative stock options to executives and stick Uncle Sam with the tab; that allow companies to avoid taxes by shifting U.S. income to offshore shell corporations; that subsidize companies for moving U.S. jobs offshore; and that allow hedge fund managers to pay a lower tax rate than their staff.

Revenue from closing those loopholes will help us preserve programs that support the aspirations of average families. For example, Congress acted over the summer to avoid a doubling of student-loan rates that would have put college – already a financial strain for most families – even further out of reach. We beat back attempts to reduce the budgets for education, research into groundbreaking technology and life-saving medical treatments. We must continue to fight to preserve these important investments in our people and their future.

Of course, for us in Michigan, the continuing renaissance of the domestic auto industry has been vital. Growing auto sales and employment continue to demonstrate the wisdom of the federal investments in preserving this backbone of American manufacturing. Just as important as what’s happening on factory floors today is how we’re preparing for long-term competitiveness. We need to make sure we build the cars of tomorrow as well as those of today.

The announcement in December that several of our state’s companies and educational institutions will participate in a federal research consortium developing next-generation vehicle batteries means good jobs for our people now and in the future. And the continued growth of clean energy technologies–not just as sources for energy, but as a growing business for our companies—underlines the strong steps taken by our entrepreneurs, often with federal support, to build for the future.

As chairman of the Senate Armed Services Committee, I know how important a strong and innovative industrial base is to our defense. The Defense Authorization Act we passed at the end of the year draws on Michigan’s manufacturing, engineering and technological prowess in a host of ways. And in November, my wife, Barbara, and I attended the keel-laying ceremony for the USS Detroit, one of a new class of Navy vessels built to counter the security threats of the coming decades. Hundreds of Michigan workers will help build the USS Detroit and sister ships at a shipyard in Marinette, Wis., just across the state line from Menominee.

That is just the latest chapter in Michigan’s maritime heritage, a heritage inextricably linked to the Great Lakes. In 2012, Congress passed legislation I pushed for that could help improve harbor maintenance. The Senate passed a bill I authored to protect thousands of acres of wilderness at Sleeping Bear Dunes National Lakeshore, and though the House did not pass this bill, I’m hopeful we’ll succeed in this Congress. And as co-chair of the Senate Great Lakes Task Force, I helped lead bipartisan efforts to ensure adequate funding for Great Lakes preservation and restoration, including programs to protect against invasive species such as Asian carp.

I just returned from a trip to Afghanistan and Pakistan, looking ahead to an important year for our policy in that region. Spending time with the brave men and women of our military is always inspiring. We are on schedule to hand over security responsibility for all of Afghanistan to that nation’s security forces. Serious challenges remain, most notably in helping develop Afghan government institutions that are effective and free of corruption.

We face no shortage of challenges entering 2013. I’m optimistic we can meet them. The people we serve expect and deserve it, and our nation’s future demands it.

Carl Levin is the senior U.S. senator from Michigan.

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Reform Bill an Important Step in Preserving Postal Service


By Sen. Carl Levin

In late April, the Senate approved an important bill to reform the U.S. Postal Service. Though the bill was not perfect, it makes important changes to help the Postal Service adapt and thrive in the 21st century. And it includes an amendment that I helped write that I believe will help protect postal facilities in Michigan and across the nation from unjustified closures.

There is little doubt that change is necessary; the Postal Service faces an extraordinary financial challenge, and it must make changes to take into account a new reality in which physical mail has in many cases been replaced by electronic communication.

But in making these necessary reforms, we must ensure that all the American people can continue to rely on the United States Postal Service to provide universal service, as it has since our nation’s founding. And we must ensure that in making changes, any reduction in facilities and personnel yields real cost savings to the Postal Service that outweigh the loss in service. Many communities in Michigan, large and small, urban and rural, are concerned that closures proposed by the Postal Service will degrade the service on which Michiganians depend.

One of the things we can do to assure that is to require that there be a real, objective way to test and challenge Postal Service proposals to close facilities. In an effort to meet those goals, I joined with Sen. Jon Tester of Montana and Sen. Al Franken of Minnesota, among others, to propose an amendment that made important changes to the bill.

Under current law, any interested party can appeal a proposed closure of a community’s main post office to the Postal Regulatory Commission. The postal reform bill extends that opportunity for appeal to branches of a post office. But it did not extend that same appeal right to postal processing facilities—the facilities where mail is sorted, routed and distributed to post offices. Our amendment established a meaningful appeal process for proposed closures of these facilities.

Recent experience showed me the need for a real appeal process. In February, I wrote to Postmaster General Patrick Donahoe about the decision to close six processing facilities in Michigan. I asked questions about what savings the proposal would yield and the impact on service to Michigan customers. But when the Postal Service responded to my letter nearly eight weeks later, the response did not answer any of my questions satisfactorily. The inability to provide basic information indicates to me that a fair opportunity to appeal is crucial.

Our amendment made other important changes. It ensures that any postal facility proposed for closure will remain open during any appeal. It makes clear that the Postal Regulatory Commission, when considering an appeal, has the authority to reverse a proposed closure. It requires the Postal Service to consider whether closing a facility will result in actual cost savings and directs the Postal Regulatory Commission to reject any proposed closure that does not meet that test.

Postal reform is among the most significant issues we will consider this year. It touches every town and village, every person and every business across our nation. The Postal Service’s universal service obligation to ensure that all Americans have access to an affordable, efficient postal system in order to communicate with one another is among the most important obligations any agency or department has. It sets the Postal Service apart from private-sector firms that are under no obligation to serve all markets. The Postal Service’s first obligation is not profit. It is service.

I believe our reform bill will help the Postal Service continue to meet that obligation for decades to come. Now that the Senate has acted, I hope our colleagues in the House of Representatives can act quickly so Americans can continue to get the postal service they need and deserve.

Carl Levin is the senior U.S. senator from Michigan.


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