Uncle Sam to Pay Millions to Illegal Aliens, Courtesy of the IRS!

unclesambroke

During a hearing last month, Sen. Chuck Grassley asked IRS Commissioner John Koskinen about the tax consequences of the President’s unilateral action that essentially grants amnesty to five million people in the country illegally,  specifically as it relates to their eligibility for the earned income tax credit (EITC). Guidance issued by the IRS in 2000 suggests individuals benefitting from the President’s immigration action will be eligible to claim the refundable EITC for previous tax years in which they were not authorized to work in the United States.   Grassley asked Koskinen whether the IRS intended to revisit the 2000 guidance in light of the President’s executive action.  Koskinen agreed to respond and recently did so by letter.  The letter confirms the IRS intends to stick by its previous interpretation of the EITC eligibility requirements.  As a result, individuals in the country illegally who are benefitting from the President’s action will be eligible to claim the EITC for up to three previous tax years even though it would be based on earnings made while working illegally in the United States. According to IRS data, the average EITC credit in 2012 was just over $2,300 and the maximum available credit in 2014 is  $6,143.  Grassley made the following comment on this information.

 

“An estimated five million people in the country illegally will remain here under the President’s executive action.  Given the IRS’ interpretation of tax rules intended to prohibit undocumented  workers from qualifying for the EITC, these individuals will be eligible to claim billions of dollars in tax benefits based on earnings from unauthorized work in the United States.  With the stroke of a pen, the President rewarded those working illegally in the United States with a tax benefit that is designed to encourage low-income individuals to enter the workforce.  Given that the IRS is intent on standing by its present interpretation of the eligibility requirements, I’m working on legislation to uphold an important principle that many of us in Congress support.  The tax code shouldn’t reward those who broke our immigration laws.”

Ex-Nazis Awarded Millions of Dollars in American Social Security.

Adolph Hitler and Nazi marching in cartoon illustration by Willard Mullin


Grassley, Hatch Press Social Security Administration, Justice Department

on Benefits for Suspected Nazis

WASHINGTON – Sen. Chuck Grassley and Sen. Orrin Hatch are seeking details from the Social Security Administration and the Justice Department on Social Security benefits given to suspected ex-Nazis.  It’s unclear why the federal government allowed millions of dollars to flow to these individuals, including those who have left the country. Record-keeping discrepancies have exacerbated uncertainty and confusion over U.S. government practice and policy on allowing ex-Nazis to retain their Social Security benefits.

“We have introduced bipartisan, bicameral legislation to close the Social Security loophole in order to prevent this practice in the future and hope that it will become law soon,” Grassley and Hatch wrote in letters to each agency.  “However, there remain questions about DOJ’s actions and what will be done in current cases if the law is not passed before they are resolved.”

Grassley and Hatch asked for statistics in areas including the total number of Nazi suspects who received Social Security benefits after leaving the United States, how many suspected Nazis currently receive Social Security benefits and live outside the country, information on the potential outcome of certain identified cases, and details of interaction between the Social Security Administration and the Justice Department on the issue.

Hatch is the sponsor and Grassley is an original cosponsor of bipartisan, bicameral legislation to terminate Social Security benefits for Nazi persecutors who receive them because of a loophole in current law.  The practice appeared to be little-known in recent years until an Associated Press report exposed the practice, leading to scrutiny from Congress and public outcry.

National Adoption Day is This Coming Saturday.

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Floor Statement of Senator Chuck Grassley

National Adoption Day on Saturday, Nov. 22, 2014

Delivered Wednesday, Nov. 19, 2014

 

On Saturday, many children and families around the country will celebrate National Adoption Day.  It’s a day that many adoptions are finalized and youth find their forever families.

 

It’s very comforting and fitting that this day helps kick off the holiday season.  Families will be formed and strengthened.  This Thanksgiving, many children will celebrate with their new families and not have to worry about their next placement or their next meal.  And this month, we give thanks to the men and women who make their dreams come true.

 

Since the first National Adoption Day in 2000, nearly 50,000 children have joined “forever families” during National Adoption Day.  In 2013 alone, adoptions for 4,500 children were finalized through 400 National Adoption Day events across the county.

 

These are impressive numbers — numbers that make us proud of the work being done to help children in foster care find loving families. But there is always more work to be done.

 

Today, there are over 102,000 children in the foster care system.  Iowa alone has over 6,200 children in foster care, many of whom are waiting for a loving family to adopt them.

 

There are so many issues facing foster youth – in addition to being torn apart from their families.  They face serious trauma.  They are likely to be treated differently, and don’t get to do the same activities as other kids.  They transition from home to home, and school to school.  They don’t know normalcy.  And they may never know permanency.  And, after years of challenges, some are forced to transition to adulthood on their own.  Unfortunately, each year over 23,000 youth age out of care in the U.S.

 

Too many older children in foster care, especially those with special needs, are often the ones who wait the longest to leave foster care.  Foster youth simply desire to have what so many of us were blessed to have — that is, a home with caring, loving parents and siblings.  These kids are less likely than younger children to find “forever homes.”

 

That is why I helped form the Senate Caucus on Foster Youth.  I wanted to draw attention to the challenges that older foster youth face.  The caucus has allowed Congressional leaders to become more aware of the issues faced by young people and families who are involved in the foster care system.

 

The caucus cannot function without the input and insight from foster youth.  These children are the experts on the foster care system.  They tell us what works or what needs to change.  They share their experiences and provide us with real world stories about how our policies truly affect them.

 

The caucus and the youth who share their experiences remind us that no child is unadoptable.  No child should be without a mom and dad. And we must remember that foster care should be a layover, not a destination.

 

November is National Adoption Month, a time to raise national awareness of adoption, and celebrate families, advocates and volunteers involved in adoption.  It’s also a time to devote more attention to policies and practices that protect the safety and well-being for all children.

 

I am hopeful that Congress will continue to look for ways to improve the foster care system and promote adoptions.  I am glad Congress worked to enact a bill this year to renew the adoption incentives program and to do more to screen and help foster youth who may be trafficked.  We must continually examine how the system is treating youth, and whether policies in place are strengthening families.

 

There are many youth who will celebrate this holiday season without a permanent family.  Hopefully, our celebration of National Adoption Month will raise awareness of the issues they face and the need to find them a mom and a dad.  We need to keep working together to break down the barriers to adoption.

 

So today, I thank all those who have adopted or who have fostered children who needed it.   And, I thank the many individuals and organization that work to make permanency possible for children.  I know many dreams will come true this Saturday, and I wish the very best to the youth as they begin their journey with their new families.

 

Need a Nice, Long, PAID Vacation? Work for Uncle Sam!

slowburn

For Immediate Release

Tuesday, Oct. 21, 2014

 

Grassley, Issa Seek Agency Explanation of Federal Workers on Long-term Paid Leave

WASHINGTON – Sen. Chuck Grassley and Rep. Darrell Issa today asked the federal agencies featured in a critical government audit to account for the hundreds of federal employees on paid leave for a year or more.

“Each agency handles administrative leave on its own terms in the absence of clear guidance that should apply to everyone,” Grassley said.  “The result is employees’ getting paid to stay home, sometimes for more than a year, while management looks the other way.  This is detrimental to taxpayers and good government.  The agencies should account for each case of paid leave, especially those lasting more than a year.  The explanations will help Congress arrive at solutions to stop abusively long leave.”

“Given the GAO’s report showing the incredible amount of money being spent on leave, Congress must know how it is possible that agencies’ current processes result in gross overuse of paid administrative leave, wasting taxpayer funds,” Issa said.  “The GAO reported that the VA continued to pay nearly 6,000 workers for one to six months, with no obligation on these employees to work. The taxpayers have the right to know why their money was spent on paid administrative leave instead of caring for our nation’s veterans.”

 

Grassley and Issa wrote to 17 agencies and the inspector general for one agency featured in a report from the Government Accountability Office (GAO), issued this week at their request, along with Sen. Tom Coburn.  The report documented paid leave for what appears to be the first time, finding that over a three-year period, data covering about 60 percent of all civilian federal employees found that more than 57,000 employees were on paid administrative leave for more than a month, costing $700 million in salary alone, excluding benefits.   About 4,000 of the employees were off the job for three months to a year and 263 employees for one to three years.  The most common reason cited for periods of extended administrative leave to GAO was “personnel matters” such as investigations into misconduct and “pending administrative actions.”

 

The Grassley-Issa letter to each agency is the same except for the State Department and the Department of Veterans Affairs.

 

The Department of Veterans Affairs received a special question since it had more employees on extended leave than any other agency on a per employee basis.  And rather than write to the State Department directly, Grassley and Issa wrote to the agency inspector general and asked for an inquiry into why the State Department doesn’t provide the data to the Office of Personnel Management (OPM) like the other agencies in the report and asked the inspector general to gather the data directly from the State Department since GAO couldn’t get the information through OPM.

 

The agency answers, along with the GAO report, will help inform what kind of legislation might be needed to limit administrative leave and hold agencies accountable for the decisions agencies have made to keep employees on leave for more than a year.

 

Grassley is working with Sen. Jon Tester on potential legislation that would force agencies to make a decision on whether an employee is a danger to fellow employees and must be removed from the workplace or whether that person can be reassigned while his case is resolved.  The goal is to make sure federal employees are working for taxpayers and not lingering on paid leave at taxpayer expense, Grassley said.

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The International Year of the Family Farm.

Bipartisan resolution, which coincides with a similar United Nations designation, recognizes the important contribution of family farming in providing food security and eradicating poverty around the world

Washington, D.C. – U.S. Senators Amy Klobuchar (D-MN) and Chuck Grassley (R-IA) announced that their bipartisan resolution designating 2014 as the International Year of Family Farming passed the Senate. The resolution, which coincides with a similar United Nations designation, recognizes the important contribution of family farming in providing food security and eradicating poverty around the world.

“Family farmers across the world lift up their communities with every harvest,” Klobuchar said.  “This action in the Senate recognizes that rural communities are the backbone of local economies around the world, and honors the contributions that family farmers make in our global fight to eradicate poverty and hunger.”

“I’m glad the Senate passed this resolution recognizing the contributions that family farmers make to the world community,” Grassley said. “Farming is a tireless and often thankless way to make a living, yet time and time again, family farmers stand ready to feed and fuel societies around the globe.”

The text of the resolution is available below.

 

Designating the year of 2014 as the “International Year of Family Farming”.

 

Whereas United Nations Resolution A/Res/66/222, adopted by the General Assembly on December 22, 2011, designates the year 2014 as the “International Year of Family Farming”;

 

Whereas the International Year of Family Farming recognizes the important contribution of family farming in food security and eradicating poverty around the world;

 

Whereas in the United States, family farms constitute 96 percent of all farms;

 

Whereas the agriculture sector contributes more than $130,000,000,000 to the United States economy, employs approximately 14 percent of the total workforce in the United States, and accounts for nearly 5 percent of the United States gross domestic product;

 

Whereas 45 percent of individuals around the world make a living directly by farming;

 

Whereas family farming is the predominant form of agriculture in both developing and developed countries;

 

Whereas family farming serves as a means of organizing agricultural, forestry, fishery, pastoral, and aquaculture product;

 

Whereas family farming plays important socioeconomic, environmental, and cultural roles;

 

Whereas family farmers grow high-quality food, are active participants in civil society, and are stewards of the land;

 

Whereas 75 percent of the poorest individuals around the world live in rural areas;

 

Whereas family farms are linked to most areas of rural development and have invested significantly in local communities;

 

Whereas the majority of farmers around the world are women who produce up to 80 percent of food around the world; and

 

Whereas 870,000,000 individuals are suffering from chronic undernourishment and a disproportionate number of such individuals are farmers: Now, therefore, be it

 

Resolved, That the Senate—

(1)   designates the year 2014 as the “International Year of Family Farming”;

(2)   congratulates family farmers in the United States and around the world;

(3)   recognizes the vital role family farms play in the economic and social well-being of the United States and around the world;

(4)   recognizes the importance of raising the profile of family farming by focusing the attention of individuals around the world on the significant role of family farming in alleviating hunger and poverty, providing food security and nutrition, improving livelihoods, managing natural resources, protecting the environment, and achieving sustainable development in rural areas;

(5)   encourages countries, national organizations, and States to undertake activities to support the International Year of Family Farming;

(6)   recognized the role and importance of women in family farming;

(7)   emphasizes the positive impact of family farms and developing new programs for domestic and international family agricultural development; and

(8)   advocates for the protection of the viability of family farms, which serve as the foundation of rural society and social stability.

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Want a Paid Two-Year Vacation? Work for the U.S. Government!

slowburn

For Immediate Release

Thursday, Aug 21, 2014

Grassley Seeks Details of Process for Investigating Government Watchdogs Facing Complaints

WASHINGTON – Sen. Chuck Grassley of Iowa today sought data on the process of investigating government watchdogs accused of wrongdoing.  A recent case involving the inspector general of the National Archives and Records Administration took almost two years to resolve while the inspector general was on paid leave, prompting concerns that the investigative process is too slow.

“Extended investigations are harmful to the independence and integrity of the IG community,” Grassley wrote to the chair of the Integrity Committee of the Council of Inspectors General on Integrity and Efficiency.  “They also prevent agencies from effectively resolving allegations against a member of senior leadership.  Placing an IG on administrative leave through the duration of a multi-year investigation could also constitute the constructive removal of an IG.  Without a consistent, transparent, and efficient investigative process, the CIGIE IC will not be able to perform its essential function: to ensure that the IG community is living up to the standards it sets for the Executive Branch.”

Grassley said that in light of these concerns, Congress needs to review Integrity Committee data to consider improvements to the process.   He asked for data on the number of complaints to the integrity committee; the length of time to process such complaints, including key determinations and decision-making; and how often complaints result in integrity committee or criminal investigations.

Grassley and other observers have noted that the integrity committee might meet too infrequently to resolve complaints in a timely fashion.  Also, agencies might have an incentive to delay the process, such as by making multiple submissions or re-submitting allegations, to extend the period of operating without a permanent watchdog.

Grassley is a long-time advocate for strong, independent inspectors general and the good government they help to establish.

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Federal Health Care Cost Overruns Cost Taxpayers Millions.

slowburn

GOP Oversight Leaders Demand Answers on CMS Contracts for HealthCare.gov

WASHINGTON – Republican oversight leaders today sent Centers for Medicare & Medicaid Services (CMS) Administrator Marilyn Tavenner a letter asking a number of questions regarding the handling of CMS’s HealthCare.gov contracts.  The letter comes after the GAO issued a report yesterday detailing CMS’s ineffective oversight in managing HealthCare.gov contracts, resulting in massive and unnecessary cost overruns.  The letter was signed by U.S. Senator Orrin Hatch (R-Utah), Ranking Member of the Senate Finance Committee; Senator Chuck Grassley (R-Iowa), Ranking Member of the Senate Judiciary Committee and former Finance Committee Chairman; Senator Tom Coburn (R-Oklahoma), Ranking Member on the Homeland Security and Governmental Affairs Committee; Representative Dave Camp (R-Michigan), Chairman of the House Ways and Means Committee; and Representative Fred Upton (R-Michigan), Chairman of the House Energy and Commerce Committee.

 

“Americans deserve a government that is held accountable, and that accountability should extend to the companies that work for the federal government.   We hope that CMS will take steps to increase its oversight of contractors in the future, as well as address the problems that caused HealthCare.gov to crash on launch, and improve the procurement process to ensure that contracts are issued and maintained in accordance with government wide standards as articulated in the FAR,” the lawmakers wrote.

 

The full text of the letter is below:

 

 

July 31, 2014

 

The Honorable Marilyn Tavenner

Administrator

Centers for Medicare & Medicaid Services

7500 Security Boulevard

Baltimore, MD 21244

 

Dear Administrator Tavenner:

 

It is no secret that the rollout of the state and federal exchanges established under the Patient Protection and Affordable Care Act (PPACA) did not go smoothly.  The Government Accountability Office (GAO) has now issued a report highlighting a number of findings regarding potential violations of the Federal Acquisition Regulations (FAR) System specifications by the Centers for Medicare & Medicaid Services (CMS) during the HealthCare.gov contracting process.

 

GAO’s report details significant problems in CMS’s oversight of the contracting process for HealthCare.gov, and its IT contracting process in general.  GAO highlighted the fact that CMS did not conduct proper oversight of the project or follow best practices for contract management.  For example, CMS did not follow its quality assurance surveillance plan (QASP) for the project, and it is unclear if CMS prepares QASPs for its IT projects at all.  Also, HealthCare.gov experienced massive cost overruns.  GAO found that in at least 40 instances, additional costs were approved by CMS officials who were not authorized to make those decisions.  This was done without the knowledge or consent of the CMS contracting officer.

 

Americans deserve a government that is held accountable, and that accountability should extend to the companies that work for the federal government.   We hope that CMS will take steps to increase its oversight of contractors in the future, as well as address the problems that caused HealthCare.gov to crash on launch, and improve the procurement process to ensure that contracts are issued and maintained in accordance with government wide standards as articulated in the FAR.

 

With that in mind, we request that you provide the following information:

 

1)      According to GAO, 62 different contracts and task orders were used to support the development of HealthCare.gov.  What specifically was purchased under each of the 62 task orders, and why was each one necessary?

2)      Did CMS pay contractors to develop the requirements for the federally-facilitated marketplace and data hub?  If so, what is the amount of funding paid to develop these requirements?

 

3)      According to GAO, CMS had a stated priority of meeting deadlines with respect to HealthCare.gov and its deliverables.  To accomplish that end, contracts were granted without complete statements of work or technical specifications.  How did CMS select contractors to do work when the end requirements were not known?

 

4)      GAO also found that CMS paid contractors for work that was incomplete or for work not yet started when they received payment.  What is CMS’ justification for paying contractors for incomplete or nonexistent work?

 

5)      What was CMS’ overall acquisition strategy for HealthCare.gov?  If there was not an overall strategy, why did CMS not have one?

 

6)      Was a QASP system developed to aid in CMS’ HealthCare.gov contracting oversight efforts?  If so, was it employed?

 

7)      Were reviews of contractor activities required by contract task orders?  If so, how often did those reviews occur and did they occur as scheduled?

 

8)      Did CMS ever withhold or not perform any scheduled contract reviews?

 

9)      Who at CMS was responsible for ordering contract review changes and who kept track of those changes and the impact the changes had on overall contractor costs?

 

10)   Were contract review changes required to be approved by a technical review board or some other third party entity to ensure they were necessary?

 

11)   According to GAO, the Chief Operating Officer of CMS sent, and then recalled, a letter to CGI Federal to document performance failures and lay the groundwork to recover funds from the contractor.  Why was the letter drafted?  Who decided to recall the letter, and why?  Please provide copies of all records related to the recall of the letter.

 

12)   According to GAO, the costs associated with the sole source follow-on contract awarded to Accenture have risen from $91 million to $175 million as of June 2014.  What explains this cost growth?  What is CMS’ current estimate of the costs to complete work under contract with Accenture?

 

Thank you for your attention to this matter.  We would appreciate a response by August 22, 2014.  If you have any questions, please do not hesitate to contact Kim Brandt with Senator Hatch’s Finance Committee staff at (202) 224-4515, Tegan Millspaw with Senator Grassley’s Judiciary Committee staff at(202) 224-5225, Kathryn Edelman with Senator Coburn’s Homeland Security and Government Affairs staff at (202) 224-4751, Sean Hayes with Chairman Upton’s Energy and Commerce staff at (202) 225-2927 or Adam Pradko with Chairman Camp’s Ways and Means staff at (202) 225-3625.

 

 

 

Sincerely,

 

 

 

Orrin Hatch                                            Fred Upton                                                      Dave Camp

Ranking Member                                Chairman                                                          Chairman

Senate Finance Committee            Energy and Commerce Committee       Ways and Means Committee

 

Charles Grassley                                  Tom Coburn, MD

Ranking Member                                Ranking Member

Senate Judiciary Committee           Senate Homeland Security and Government Affairs Committee

College Rape Continues to Trouble US Campuses.

Raped-2

Wednesday, July 30, 2014

 

Grassley on Bipartisan Bill to Boost Accountability, Transparency on College Sexual Assault

 

WASHINGTON – Sen. Chuck Grassley of Iowa today joined colleagues in introducing bipartisan legislation that addresses sexual assaults on college and university campuses by protecting and empowering students and strengthening accountability and transparency for institutions, including penalties for non-compliance with the legislation’s new standards for training, data and best practices.

 

“Our bill has provisions to ensure that colleges treat sexual assault cases with the seriousness they deserve,” Grassley said. “This includes better coordination with law enforcement and clearer expectations for how colleges should handle reports of sexual assault.  Sexual assault is not some mere code of conduct violation.  It is a major criminal offense.  Like with any crime, weak enforcement makes the problem worse.  This bill will start to turn that around.”

 

The Campus Safety and Accountability Act was announced by Grassley and Sens.  Claire McCaskill (D-Mo.), Dean Heller (R-Nev.), Richard Blumenthal (D-Conn.), Kirsten Gillibrand (D-N.Y.), Kelly Ayotte (R-N.H.), Mark Warner (D-Va.), and Marco Rubio (R-Fla.).  The legislation is intended to confront sexual violence against students, a problem facing increased attention as victims come forward.

 

The current system of requiring colleges to report sexual assault to the federal government results in non-reporting, under-reporting, and non-compliance with the already weak standards under current federal law.

 

The bipartisan Campus Accountability and Safety Act will make it in the schools’ immediate best interest to take proactive steps to protect their students and rid their campuses of sexual predators.

 

Provisions of the bipartisan legislation include:

 

New Campus Resources and Support Services for Student Survivors: Under this legislation, colleges and universities will be required to designate Confidential Advisors who will serve as a confidential resource for victims of assaults committed against a student.  The role of Confidential Advisors will be to coordinate support services and accommodations for survivors, to provide information about options for reporting, and to provide guidance or assistance, at the direction of the survivor, in reporting the crime to campus authorities and/or local law enforcement. To encourage individuals to come forward with reports about sexual violence, schools will no longer be allowed to sanction a student who reveals a violation in good faith, such as for underage drinking, in the process of reporting a sexual violence claim.

 

Minimum Training Standards for On-Campus Personnel: Currently, a chronic lack of training of on-campus personnel hampers sexual assault investigations and disciplinary processes, often resulting in negative outcomes for survivors. This legislation ensures that everyone from the Confidential Advisors, to those responsible for investigating and participating in disciplinary proceedings, will now receive specialized training to ensure they have a firm understanding of the nature of these crimes and their effect on survivors.

 

New Historic Transparency Requirements: For the first time, students at every university in America will be surveyed about their experience with sexual violence to get an accurate picture of this problem.  This new annual survey will be standardized and anonymous, with the results published online so that parents and high school students can make an informed choice when comparing universities. The Department of Education will also be required to publish the names of all schools with pending investigations, final resolutions, and voluntary resolution agreements related to Title IX.

 

Campus Accountability and Coordination with Law Enforcement: All schools will now be required to use a uniform process for campus disciplinary proceedings and may no longer allow athletic departments or other subgroups to handle complaints of sexual violence for members of that subgroup alone. This legislation will require colleges and universities to enter into memoranda of understanding with all applicable local law enforcement agencies to clearly delineate responsibilities and share information so that when an assault occurs, both campus authorities and local authorities can focus on solving the crime rather than debating jurisdiction.

 

Enforceable Title IX Penalties and Stiffer Penalties for Clery Act Violations: Schools that don’t comply with certain requirements under the bill may face a penalty of up to 1 percent of the institution’s operating budget. Previously, the only allowable penalty was the loss of all financial aid which is not practical and has never been done. The bill increases penalties for Clery Act violations to up to $150,000 per violation from the current penalty of $35,000.

 

The federal Department of Education handles laws covering sexual assault on campus. Title IX, a federal gender equity law, requires colleges and universities to respond to sexual assault and harassment cases on campus and have policies in place to help prevent such incidents. The Jeanne Clery Act mandates that colleges and universities report information on crime on and around campuses and provide victims with select rights and resources.

 

Grassley, Ranking Member of the Senate Judiciary Committee, and his fellow Senate sponsors have been working together for months to examine federal, state, and local policies, collect feedback from stakeholders, and craft bipartisan legislation to better protect and empower students, and hold both perpetrators and institutions accountable.

 

Grassley said he has not been approached about particular cases in Iowa.  He has been following efforts to address sexual assault at the University of Iowa.

Helping Foster Children Become Financially Mature.

Circus Elephant

Grassley Welcomes Iowan, Others on Financial Expertise for Foster Youth

 

WASHINGTON – Sen. Chuck Grassley of Iowa today welcomed an Iowan and others who shared their experiences on the critical need to help foster youth learn financial literacy.

 

Eddye Vanderkwaak of Ankeny, a Jim Casey Young Fellow, spoke at a roundtable sponsored by the Senate Caucus on Foster Youth and the Senate Caucus on Financial and Economic Literacy.  She described what worked and didn’t work for her while in foster care and what could be done to improve financial literacy for foster youth going forward.  More on her experience is available here.

 

Grassley is a founder and co-chairman of the Senate Caucus on Foster Youth, which has a special focus on drawing on experiences from foster youth to improve the system.

 

Grassley’s remarks at the roundtable follow.

 

Remarks of Sen. Chuck Grassley

Roundtable Discussion on Financial Literacy for Foster Youth

June 16, 2014

 

It’s nice to be with you today.  It’s also nice to have people from all walks of life in this room — from credit bureaus and other financial experts to executive branch officials to child welfare advocates who have been working hard to reform the system for children.

 

The idea for this roundtable came about after hearing from child welfare advocates about the need to include other groups in protecting foster youth.  I’m reminded of Casey Family Program’s mission — “to forge a nation where supportive communities nurture the safety, success and hope of every child.”

 

Child welfare advocates have to take their message beyond those who care for abused and neglected children.  There are many challenges facing youth in the foster care system.  Financial security is just one obstacle they face in having a healthy and successful future.

 

Many people are lost in today’s world of credit cards, credit scores, and credit reports. Everyday Americans struggle to keep up, to pay their bills on time and to make sure they take actions to safeguard their identity.

 

Many of us have learned good financial planning or decision making from family members.  So, imagine the challenges foster youth face when they don’t have those support systems.

 

While I missed hearing the personal experiences presented by Eddie and Kayla today, I’ve read their stories.  I’m glad they’re with us today to shed light on the situation and make us understand a little bit about what foster youth are facing.

 

As Kayla mentioned, repairing one’s identity is no small chore.  Without good credit, it’s hard to find a job or an apartment.  Without a job or housing, youth cannot climb the economic ladder or build a life of their own.

 

It’s unfortunate that youth like Kayla also have to make hard decisions about filing police reports against their parents in order to clear their name and repair their credit.  Children shouldn’t have to make such a decision.

 

I’m also glad that Eddie is here today.  Eddie is from Iowa, and like many children, she entered the foster care system and then aged out without a forever family.  Eddie has worked hard to build a good life for herself, and she’s giving back to the community and to children in Iowa.  I commend her and appreciate her being here today.

 

When Senator Landrieu and I formed the Caucus on Foster Youth, we said we wanted youth to be a major part of it.  We wanted to hear and learn from them because they are the true experts on the policies and practices that are in place.

 

Our caucus was also created to help foster better ideas and best practices.  We want people to learn from youth and learn from experts.  And, we want these ideas to be put into practice.

 

I hope today’s event will foster creative solutions.  And, I hope it will forge relationships between two distinct groups — the financial services industry and child welfare advocates.  The expertise and capabilities in these fields should come together to help solve a key challenge that foster youth face.

 

So, thank you again for participating.  A special thanks to the panelists for sharing their perspectives.  Thank you for allowing me to say a few words, and thanks again for being here.

 

 

Student Loan Debt Spiraling Out of Control.

money

Grassley Introduces Know Before You Owe Federal Student Loan Act of 2014

 

WASHINGTON – Sen. Chuck Grassley of Iowa has introduced legislation to increase the amount of information students receive about federal student loans, including their potential ability to repay, before rather than after signing onto tens of thousands of dollars in debt to Uncle Sam.

 

“The federal government is good at giving out student loans but poor at making sure students know what kind of debt they’re incurring and what will happen if they can’t repay,” Grassley said.  “There are lots of proposals to address the problem of unaffordable student loan debt after students have graduated, but that’s closing the barn door after the horse has gotten out.  This bill would help encourage students to borrow only what they can afford in the first place.”

 

Grassley’s Know Before You Owe Federal Student Loan Act strengthens the current loan counseling requirements for institutions of higher education in the Higher Education Act by making the counseling an annual requirement before new loans are disbursed rather than just for first-time borrowers.

 

The bill then adds several key components to the information institutions of higher education are required to share with students as part of loan counseling, including:

 

  • An estimate of the student’s projected loan debt-to-income ratio upon graduation based on the starting wages for that student’s program of study and the estimated total student loan debt the student will likely take out to complete the program.
  • A statement that the student should borrow the minimum amount necessary to cover expenses and that the student does not have to accept the full amount of loans offered.
  • Information about the default risk of having a projected loan debt-to-income ratio greater than 12 percent.
  • Options for reducing borrowing through scholarships, reduced expenses, work-study, or other work opportunities.
  • An explanation of the importance of graduating on time to avoid additional borrowing and information on the impact of adding an additional year of study to total indebtedness.

 

The bill also requires that a student manually enter, either in writing or through electronic means, the exact dollar amount of federal direct loan funding that the student desires to borrow.  This ensures that students make a conscious decision about how much they borrow rather than simply accepting the total amount of loans for which they are eligible, Grassley said.

 

Grassley said that in fiscal year 2014, the U.S. Department of Education will make about $112 billion in Federal Direct Loans to students, making it one of the largest lenders in the United States.  When students fill out their application for federal student aid, their eligibility for federal student loans is calculated automatically.  Students may be eligible to take out thousands of dollars in federal student loans each year even if the federal need analysis determines they have no financial need.  Federal student loans are given out without a credit check or any analysis of the student’s ability to repay the loan in the future.  Institutions of higher education are required to offer the full amount of federal student loans for which the student is eligible even if a financial aid counselor knows a student is borrowing more than the student needs and likely will have trouble repaying.

 

Total student loan debt in the United States is now second only to mortgage debt and the vast majority of this is from federal student loans, Grassley said.  Given the state of the economy, many recent graduates are finding this debt difficult to repay and the consequences of defaulting on federal student loans can be severe, including offsetting tax refunds or Social Security payments and garnishing wages.  “As the lender making loans on loose terms, the government has a responsibility at least to ensure that students know what they’re getting themselves into before they get in over their heads.  This bill would make for more informed borrowers and fewer rude awakenings after graduation,” Grassley said.

 

Grassley said several Iowa programs for students inspired his legislation:  Grand View University in Des Moines’ “Financial Empowerment Plan;” the non-profit Iowa Student Loan’s “Student Loan Game Plan;” and the University of Northern Iowa’s “Live Like a Student” initiative.

 

Grassley also is the lead Republican co-sponsor of the Net Price Calculator Improvement Act of 2014 to improve the effectiveness of and access to net price calculators, which provide students with early, individualized estimates of higher education costs and financial aid figures before they decide where to apply.

 

For years, Grassley has worked on the bipartisan Understanding the Trust Cost of College Actthat would create a universal financial aid form to help students better compare colleges’ financial aid offers and costs.

 

Grassley worked through the Finance Committee, with jurisdiction over tax policy, to help hold colleges accountable for their significant tax exemptions by pressing well-funded colleges to spend more of their endowments on student aid. He also has encouraged colleges to cut perks and salaries in the administrative suite, such as loans for vacation homes to executives and faculty at New York University.  Grassley also led the fight to remove the 60-payment limit on the student loan interest deduction. Congress eliminated the 60-day payment limit in 2001. The expanded policy since became permanent law.