Advisory for Iowa Reporters and Editors

Friday, December 2, 2011

During his weekly video address, Senator Chuck Grassley discusses an amendment he cosponsored to give the National Guard a seat at the table when major decisions are made, including how Defense Department resources are allocated. During the debate to authorize Pentagon spending, Senator Grassley also cosponsored an amendment to the defense authorization bill to contain runaway spending on direct contractor salary reimbursements.

Click here for audio.

Here is the text of the address:

As part of a bill debated this week to authorize Pentagon spending, the Senate approved an amendment I cosponsored to give the National Guard a seat at the table when major decisions are made, including how Defense Department resources are allocated.

I'm a member of the National Guard Caucus in the Senate, and this amendment will build on reforms achieved in 2008.  The total force concept adopted by the Defense Department in 1970 made the Guard and Reserves integral to any extended campaign by U.S. forces, but the culture at the Pentagon has been slow to adopt the reality.

Last year, Iowa was ranked 15^th in the nation for the percentage of our population serving in the National Guard.  Recently, we welcomed home the 2nd Brigade Combat Team, 34th Infantry Division, which had more than 2,800 soldiers serving on combat duty in Afghanistan.  It was the largest single unit deployment of the Iowa National Guard since World War II.  It's time to give the Guard and Reserves support that's on par with that dedicated to active forces.

I cosponsored another amendment to the defense authorization bill to contain runaway spending on contractor salary reimbursements.  A large portion of government contracts actually reimburse the contractors directly for costs, including the salaries of their employees.  These cost-reimbursement type contracts are used extensively by the Defense Department.  The amendment I introduced with Senator Barbara Boxer of California limits unreasonable expenditures under these types of contracts.  We can't afford to waste increasingly limited defense dollars.

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Grassley said his questions are based on the fact that the campaign implies the actions are being taken independently from Congress, but that it's unclear what statute allows the President to unilaterally alter income requirements for payment adjustments, expand loan forgiveness and make it easier to get out of existing loans.

"I wrote a letter to the President earlier this month asking him to explain to Congress and the public the legal authority he is claiming to implement the student loan changes," Grassley said.  "Our system of government is based on the principle of representative government, so the President can't unilaterally enact laws.  Congress, where elected representatives reflect the will of the people, makes the laws and the President signs or rejects them.  Serious constitutional issues are raised when the President disregards the people's voice as expressed through Congress to change the law himself.  Frustration with the legislative process is understandable, but the process is based on constitutional principles and, in fact, where there is bipartisan support for initiatives the President has offered, proposals have been passed this year."

Here is the text of Grassley's letter to President Barack Obama.

November 9, 2011

President Barack Obama

1600 Pennsylvania Avenue NW

Washington, DC 20500

Dear President Obama,

On October 25, 2011, you announced changes that would provide better repayment terms for a select group of student loan borrowers.  Specifically, the proposal would accelerate the application of changes Congress made to the law effective July 1, 2014 reducing the percentage of a borrower's income from 15% to 10% to calculate payments under the Income-Based Repayment (IBR) plan and reducing the length of time during which a student borrower must make qualifying payments under the IBR plan from 25 years to 20 years in order to be eligible for loan forgiveness.  The proposal also includes a new 0.5% interest rate subsidy for borrowers who agree to consolidate their privately held Federal Family Education Loan Program (FFELP) loans into the government-run Direct Loan Program.  This was part of your "We Can't Wait for Congress" campaign.  However, the announcement was missing some key details and raised some questions that Congress and taxpaying Americans deserve answers to.

The slogan "We Can't Wait for Congress" implies that these are actions you are taking independently of Congress.  However, under our constitutional system, the President can only take actions that are authorized by Act of Congress or that fall under the authority granted to the President in the Constitution.  That raises the question of what specific statutory authority you are using to implement these policy changes.

Please cite the specific statutory language and accompanying legal analysis by which you determined you have the authority to reduce the percentage of a borrower's income from 15% to 10% to calculate payments under the IBR plan in advance of the effective date of July 1, 2014 as provided for in the SAFRA Act as part of P.L. 111-152.

Please cite the specific statutory language and accompanying legal analysis by which you determined you have the authority to reduce the length of time during which a student borrower must make qualifying payments under the IBR from 25 years to 20 years in order to be eligible for loan forgiveness in advance of the effective date of July 1, 2014 as provided for in the SAFRA Act as part of P.L. 111-152.

Please cite the specific statutory language and accompanying legal analysis by which you determined you have the authority to offer a special 0.5% interest rate subsidy for borrowers who agree to consolidate their privately held Federal Family Education Loan Program loans into the Direct Loan Program.

In addition, the initial announcement was vague about the means of implementation for these changes.  While media reports have referred to an "executive order," no such executive order has been issued to date and the announcement only refers to this as part of "a series of executive actions."  In fact, I understand that your Administration plans to implement parts of this proposal through rulemaking procedures used for implementing laws passed by Congress.  Please describe the timeline for this process and why the implementation process is only now beginning.

Also, your announcement claims that, "These changes carry no additional cost to taxpayers."  Obviously, there is some cost to providing improved benefits sooner than the effective date in law.  Presumably this claim is based on estimated cost savings that offset the additional costs.

Please describe in detail the estimated costs of these new benefits and any estimated savings as well as the detailed calculations and assumptions by which those estimated savings were derived.

If the estimated savings are based on an assumption of lower costs due to shifting more existing FFELP loans into the Direct Loan program, then that raises the question of whether the estimate took into account factors that often lead to a significant overestimate of savings, and even revenue generated, through the Direct Loan program as described in the March 2010 Congressional Budget Office Study "Costs and Budget Options of Federal Student Loan Programs."

If in fact moving loans into Direct Lending is the source of any estimated savings, please explain whether your estimate fully took into account administrative costs and default risk as well as the risk to the Treasury of assuming greater debt at a time when our country's ability to borrow money at low interest rates is already threatened by excessive federal debt.

Finally, any discussion of new spending or potential cost savings inevitably involves tradeoffs.  To the extent that this proposal involves spending of limited resources or involves legitimate savings to the federal Treasury, in a time of severely constrained resources, Congress may wish to consider whether there are better uses for these resources, such as reducing the deficit or addressing the funding shortfall for Pell Grants.  Despite a significant infusion of funds provided to the Pell Grant program in the Budget Control Act, there is still an estimated shortfall of $1.3 billion for fiscal year 2012 in order to maintain the current maximum Pell Grant award.  The Pell Grant program is designed to provide access to college for very low-income individuals who otherwise would not have access to a higher education.  To the extent that resources are available, Congress might wish to consider whether this is a higher priority than providing a select number of borrowers who are already on a special repayment plan, and who have already had the benefit of a higher education, the opportunity to have even more of their student loans paid off even earlier.

Such tradeoffs should be made in the light of day with full accountability to the taxpayers, including the majority of student loan borrowers who are paying off their student loans without help and the many hard working Americans who have not attended college.  As such, I request an answer to the above questions no later than November 23, 2011.  Should you have any questions regarding this matter, please contact James Rice of my staff at (202) 224-3744.

Sincerely,

Charles E. Grassley

United States Senator

Every year, St. Ambrose University's theatre department produces four mainstage shows over the nine months that school is in session. It's somewhat surprising, then, that given the myriad authors to choose from, the university opted to reserve half of the slots in its 2011-12 season for works by a single playwright.

Yet what's more surprising is that the author in question isn't one of the usual theatrical suspects - Shakespeare or Williams or O'Neill. Rather, it's St. Ambrose student Aaron Randolph III, a 32-year-old pursuing additional degrees after graduating in 2002 from the school's music department. His family musical Dakota Jones & the Search for Atlantis will be staged in the university's Galvin Fine Arts Center December 3 and 4, and his comedy The Plagiarists runs February 24 through 26.

WHEN: 11-7-11

TIME: 7 p.m. - 8:30 p.m.

WHERE: Betterdorf Public Library, 2950 Learning Campus Dr., Bettendorf, IA 52722

WHAT: Dorris, a resident of Davenport, IA, will be available to sign copies of his book, Life Is Too Short; Life Is What We Make It.

Fear not, for in Life Is Too Short: Life Is What We Make It, author David Dorris shows you how to approach life's problems and that making the right choices is easier than you think. Life is like a baseball game where the pitcher is constantly throwing you curveballs. As this is the case, do you want to simply be a spectator, or do you want to get in the game and face life head-on? Although it may sound simple sometimes, life is not an easy game to play. There are many challenges to overcome and many choices you have to make. None of you have a choice as to how you come into the world; however, you do have a choice as to the kind of life you live. Follow David in Life Is Too Short: Life Is What We Make It, and find out for yourself how you too can knock life's curveballs out of the park.

For more information, contact Jim Miller at 888-361-9473 or jim@tatepublishing.com