WASHINGTON, DC—Today, House Ways and Means Oversight Subcommittee Chairman Peter Roskam (R-IL) delivered the following opening statement during a hearing on the rising costs of higher education and tax policy.
Right about now, college students are preparing for a great tradition in this country—homecoming. But as they head to tailgates and football teams take the field, parents, and some students themselves, are facing a harsher reality. The first tuition checks of the year are clearing the bank, and families are figuring out how to make ends meet during one of the biggest financial challenges in modern life, and that is, figuring out how to pay for the cost of college.
Let’s talk about some numbers. The current median income in the United States is about $55,000 a year. If you look at private, non-profit, four-year schools, the average sticker price—meaning the advertised price before financial assistance—is more than $31,000. For a public four-year college, it’s just under $10,000. On top of all that, students need to buy food and books and pay rent. The College Board estimates that students need to spend between $15,000 and $23,000 each year to cover those costs. So without financial aid, college could cost somewhere between $24,000 to $54,000 a year. And students are graduating with, on average, $33,000 in student loan debt.
We talk a lot about the increasing costs of health care in this Committee. Tuition makes those numbers look tame. Medical costs have increased over 600 percent over the last forty years. But tuition and fees have doubled that, increasing over 1,200 percent—and they show no signs of slowing down.
Today we’re here to look at what’s behind the rising cost of college, and to consider whether this nation’s tax policies are partly to blame. We’ll come at the problem from a number of different angles.
First, we’re going to look at federal student aid. In 1987, Secretary of Education Bill Bennett argued in a New York Times editorial that increases in federal financial aid allow colleges to raise their tuition rates because schools think the students can afford it. The New York Federal Reserve recently published a study that bears this out: the Fed study finds that at private schools, a $1 increase in the subsidized-loan cap could increase tuition by as much as 65 cents. To be clear about what this means—the data shows that when the federal government makes more loan money available, schools generally respond by raising tuition. One of the study’s authors, economist David Lucca, is here today to discuss those findings.
Next, we’re going to consider how schools are spending money. Over the last thirty years, schools have increased their administrative staff and engaged in an arms race with each other to build things like movie theatres and luxury gyms: Are all of these expenses necessary, and are they helping students secure a better education?
We will also look at how private schools are setting their executive compensation rates. For non-profit institutions, it seems like a lot of university presidents are making very good money. In 2013, 42 private college presidents made more than $1 million. One way schools can justify their compensation as “reasonable” to the IRS for the purpose of favorable tax consideration is to show that similarly situated institutions pay comparable salaries to their executives. That method points in only one direction: up. It allows schools to increase their compensation year after year because others are doing it too. I’m not against people succeeding, by any means, but this is another area that’s important for our subcommittee to consider—are the highest paid college and university presidents the ones providing the best education for students? And if not, why not? How does tax policy fit into that math?
Finally, we’ll look at endowments. Endowments and their investment earnings are exempt from taxes. Congress provides that exemption to further a charitable purpose: better educating our nation’s students, preparing them for successful careers, and increasing the store of human knowledge through research. We understand that endowments can help assure financial stability to schools. But about 90 schools have endowments of more than $1 billion. Some of those schools have made great strides in providing exceptional financial aid to their students. Others have not. So we’ll take a look at those issues as well.
We look forward to hearing from our witnesses, who can shed light on these important challenges as we examine whether federal tax policies for colleges and universities are best serving students and families.
WASHINGTON, DC—Today, Rep. Peter Roskam (IL-06), Rep. Mick Mulvaney (SC-05), Rep. Jim Renacci (OH-16), and Rep. Jim Jordan (OH-04), who led the effort for leadership elections to be in accordance with the Conference rules as written, released the following statements. While the Speaker’s announcement fulfills this request, the letter, which is still being circulated, also asks for a special Conference to discuss potential amendments to the rules.
"One of the concrete results from last week's Conference meeting was that a broad spectrum of members have an appetite for reevaluating the rules,” said Rep. Roskam. “As I've said before, we need a plan, not just a person, to lead this historic majority in effectively serving the American people. We should begin by reforming the rules and processes so that we can better unite behind conservative solutions and advance them out of the House. I'm glad the elections for prospective leadership slots have been delayed. This will give us an opportunity to have this important conversation before selecting our next leaders."
“This is the right way to do it,” said Rep. Mulvaney. “With plenty of time to talk about rules changes and then, future leadership races, when and if they become necessary. I applaud Speaker Boehner for handling it this way.”
“I applaud Speaker Boehner’s decision to allow our new Speaker to set the date for any further leadership elections until after the floor vote on October 29th,” said Rep. Renacci. “As our letter points out, Conference Rules require there be a vacancy before a leadership election can take place. Any elections prior to another leadership position being officially vacated would be premature.”
“Delaying the leadership elections wisely gives the candidates time to credibly commit to fighting for what the voters sent us here to do, including maintaining the BCA caps, fully repealing Obamacare via reconciliation, and actually decreasing the debt rather than cutting blank checks for the President,” said Rep. Jordan. “It also allows them to demonstrate their leadership qualities by adopting meaningful and fair process reforms within both the Republican Conference and the House."
WASHINGTON, DC—Today, Congressman Peter Roskam (IL-06) sent the following Dear Colleague letter to his House Republican colleagues on the future of the Conference:
I’m writing to thank you for participating in yesterday’s Conference meeting. It was my hope that we would all pause to recognize the gravity of having our Speaker step down in the middle of a session not because of any scandal or health issue or loss of a majority. Speaker Boehner made a sacrifice in stepping aside, and I thought it incumbent upon us to not waste the sacrifice by just moving on to leadership elections without reflecting on any lessons about how to move forward together.
To be sure, a two-hour meeting isn’t enough to solve all of the concerns and issues we face. But I do believe it was a constructive time for our Conference. I was encouraged by the measured and sober interaction. As I said in my letter to you earlier, I did not believe it would be a fruitful transition for either the Conference or our next leaders if we were to move straight into elections. I think many of our colleagues agree that we need a plan, not just a person.
It is my hope that those proposing to lead us will outline a plan for how we can more aggressively assert our Article I authority against the Administration, and also how we can be more provocative in our challenges so as to command more of the narrative of these debates.
And to my fellow rank-and-file Members, I hope we play a constructive role reflecting on and engaging our colleagues on two other themes: how are we going to define success? And, what should we expect of our leaders and how they spend their time? Right now, we ask of our leaders the impossible task of being on the road, in our districts, and in the press—all while fulfilling other vital policy and communications responsibilities.
On the heels of one of the most remarkable political developments in American history, we should honor the opportunity before us to reset our operations to a more effective plan. I’m not running in any of the leadership elections because I hope to continue to work at driving these themes to empower our leadership and our Members. I truly believe we can have a transformative and impactful majority, but it will require us rethinking how we have been operating individually, collectively, and structurally.
Very truly yours,
WASHINGTON, DC—Today, House Ways and Means Oversight Subcommittee Chairman Peter Roskam (R-IL) delivered the following opening statement during a hearing on the Department of Labor's proposed fiduciary rule.
"Good morning. Welcome to today’s hearing on the Administration’s recent proposal to change how people can get retirement investment advice. I know everyone on this dais agrees that saving for a secure retirement is more important than ever given all of the economic challenges our economy has faced in the last several years.
"Last April, the Department of Labor issued a proposed rule that would drastically expand the definition of a fiduciary. The Administration says this regulation will protect people from bad financial advice. That’s a good thought, and an objective we can all support. But you know what they say, the road to hell is paved with good intentions. The reality is this regulation would prevent many people from getting any investment advice at all.
"The rule would essentially hold anyone giving retirement investment advice of any kind to the standards of a fiduciary, with all of the legal implications and complexity that entails. The reason we don’t have such a standard right now is because it would make it extremely difficult for people to access financial advice without having to pay costly fees. Small businesses, low- and middle-income families, and under-served communities would be hurt by this rule far more than the wealthy. That is because the majority of small investors use financial advisors called broker-dealers, who typically work on a commission basis instead of charging fixed fees up front.
"Brokers are a major provider of retirement investment advice. Although they are not considered fiduciaries, they are held to a high standard which requires them to provide advice that is suitable for their clients’ financial interests. Brokers’ compensation is based on the number of people they enroll, a commission-centric model that the Administration opposes.
"The Administration thinks that a salesperson selling an investment product has an inherent conflict of interest that harms an individual receiving their advice and considering whether or not to buy their product. But commission-based retirement investments can often be the best option for many people. They offer a wide variety of investment choices, and since the brokers are paid a commission, the investors don’t have to pay hefty up-front fees in order to access those products. This type of investment advice is so popular that if you look at individual retirement account investors with less than $25,000 in savings, 98 percent choose to go through a broker-dealer.
"Under the proposed fiduciary rule, commission-based plans would be virtually eliminated. There is an exception if the advisers and their clients enter into a so-called 'best interest contract,' but this adds a layer of complexity for individual investors and creates a legal and financial liability for investment advisors that will have serious consequences on access to competent and affordable financial advice.
"If the fiduciary rule is implemented, small investors will have two choices. The first choice, which the Administration is encouraging, is using automated computer programs to invest. Spare me. This may work for some, but many people want to talk to a real person and get individualized advice on how to invest their hard-earned money. A computer program is a poor substitute for a qualified financial adviser who can understand a person’s unique circumstances and personal financial goals and provide in-person advice.
"The second choice for investment advice under the rule would be a fee-based model, where the investor would be responsible for paying set fees for financial advice. These fees can be significant, and even a 1 percent fee adds up quickly if it’s charged every year. But it gets worse: the smaller the account, the higher the fees. And if the rule is implemented, millions of people who currently have commission-based accounts would have to start paying fees to get the same type of financial advice they currently get for free.
"In putting forward this fiduciary rule, the Administration is relying on a study by the White House Council of Economic Advisors, which claims that conflicts of interest in retirement advice result in about 1 percent losses for investors each year, or $17 billion in lost investment earnings annually. But expert review shows this study is fundamentally flawed. For example, the study assumes that broker-sold funds are underperforming, when in fact the data suggest that they outperform similar funds. The White House study also doesn’t consider the fact that retirement advice may actually be helpful and increase the value of an investor’s retirement savings, a severe analytical flaw that runs contrary to plain common sense. For helpful advice, the study calculates no financial benefit. The Investment Company Institute, which will testify today, estimates that the fiduciary rule would actually result in investors losing more than $100 billion over a ten-year period because of increased fees and lower returns on their savings.
"One grave concern I have heard over and over again from my constituents is that the Administration’s objective is to force Americans out of private sector IRAs and 401(k)s, which are generally working very well under current law, and into retirement controlled by the government. This Administration’s own regulations, as well as public comments, have made it clear that they don’t want Americans to have control over how much to invest, which investments to choose, and when to draw down their accounts in retirement.
"In the same speeches and press releases touting the fiduciary rule, the Administration is boasting that it will soon create new Federal rules allowing state and local governments to create so-called 'secure choice' pensions run by government officials with a mandate for private sector employers to enroll their employees. I say so-called 'secure choice' on purpose, because I’m from Illinois. Under these plans, workers would be promised pensions at retirement, but they would lose them if the government officials running the plan can’t meet the investment returns they promised. That’s not just a hypothetical. After years of unrealistic projections and underfunding, pensions in Illinois are in crisis. The same is true in states all across the country.
"Given the extent of the mismanagement and underfunding in existing public pension plans, which are underfunded by some $4 trillion dollars, I can’t think of a better way to undermine the retirement security of Americans than to push them out of the private sector and into government-run public pension plans that are absolutely failing working families today.
"The Administration claims that the fiduciary rule is necessary to save small businesses and families from bad advice and protect them from the big, bad financial industry. But most people who are saving for their retirement are happy with the choices they have now on how to access investment advice. I would argue instead that the fiduciary rule puts the government in the driver’s seat, allowing bureaucrats to pick and choose how people invest their paychecks. What we should really be focusing on in this whole situation are the Americans who aren’t saving for a secure retirement adequately, or aren’t saving for retirement at all. We should do everything we can to encourage saving for the future, not passing regulations that will make it harder for people to do so.
"Despite the fact that the Department of Labor received almost 3,000 comments during the rule’s notice period, the Administration has decided to move forward without issuing a re-proposal to address those concerns. That doesn’t sound like a good faith effort to me. In fact, literally hundreds of Members of Congress of all ideological bents have gone on the record to express concerns about the rule, and yet the Department of Labor has chosen to move forward with impunity.
"The current rule is unworkable, and the Administration has done nothing to fix that. The American people, through Congress, have delegated rulemaking authorities to the Executive Branch, and we will exercise vigorous oversight, and where necessary, move forward with legislative remedies, to rein in abuses.
"I was reading through the comments the Department of Labor received on the fiduciary rule proposal—from industry, small businesses, and individual investors alike. I’d like to end my statement with one of the comments that stood out to me, submitted by Ms. Dorothy Coleman from Hockley, Texas. She wrote:
It’s my money, I was smart enough to save it, and I am smart enough to know how to spend it or save in my retirement.
"If only the Administration agreed."
WASHINGTON, DC—Today, Congressman Peter Roskam (IL-06) released the following statement after the special GOP Conference meeting. Roskam, who secured the requisite support from Members to ensure an extended meeting, opened the discussion with remarks on the future of the Conference.
“Tonight, House Republicans met to ensure we don't miss the significance of Speaker Boehner’s sacrifice and the opportunity to reflect on how we need to reorder ourselves to serve the American people most effectively. I invited all current and prospective leaders to present a written plan outlining how the House can assert itself through Article 1 of the Constitution. Our leaders will best serve our conference by bringing the fight to the Administration and not reverse engineering from failure. We will be most effective with a common understanding of what success looks like and with clear expectations for our leaders. I’m glad we started this important discussion, but we have more work to do.”
WASHINGTON, DC—Today, Congressman Peter Roskam (IL-06) released the following statement on Speaker of the House John Boehner:
“John Boehner has had the toughest job in Washington. He led us from the darkest recesses in the minority, to the majority in the House. Today’s announcement was classic Boehner—he is putting the institution before himself. He’s been a tremendous public servant and a humble Speaker who showed the American people that in this country anyone can rise above their circumstances through hard work and determination. I am hopeful that during this season of change, House Republicans will focus on a plan to get us out of our dysfunctional state, and not just settle for a change in ranks.”
WASHINGTON, DC—Today, Congressman Peter Roskam (IL-06) released the following statement after attending a joint session of Congress address by Pope Francis of the Holy See:
"It was an honor to hear from Pope Francis at this morning's historic address to Congress. His Holiness exhibited the profound compassion and commitment to God that has made him an inspiration to millions of people of all faiths worldwide. Pope Francis also reminded us of our sacred responsibility to defend life—a duty that Congress has a unique opportunity to fulfill in the coming days. We can heed the words of His Holiness by working together to advance freedom and opportunity around the world."
WASHINGTON, DC—Today, Congressman Peter Roskam (IL-06), co-chair of the Bipartisan Taskforce for Combating Anti-Semitism, released a letter to the editor that was submitted to the New York Times on September 14, 2015 in response to the column “Lawmakers Against the Iran Nuclear Deal” by Alicia Parlapiano, which featured a “Jew tracker” detailing Jewish lawmakers’ positions on the Iran nuclear agreement. The Times declined to publish the letter.
“To the editor—I was shocked to read this column, which demonstrates either gross editorial negligence or shameful anti-Semitism. Singling out Jewish lawmakers this way feeds the canard of dual loyalty that legitimizes prejudice toward Jews worldwide. The Iran nuclear agreement represents one of the most profoundly important issues most Members of Congress will ever consider. To suggest that a Jewish lawmaker would cast a vote without the best interest of the United States at heart is egregiously offensive. It would be akin to opining about how Senators of Russian descent voted on the SALT agreements. I am a Christian who strongly opposes the Iran deal and strongly supports Israel. While I disagree with those who favor this agreement, I do not question their conviction on the basis of their faith. History teaches us that dreadful things happen when Jewish citizens are held to a different standard than others.”
WASHINGTON, DC—Today, Congressman Peter Roskam (R-IL), Congressman Lee Zeldin (R-NY), and Congressman Mike Pompeo (R-KS) released the following statement after reports indicate that Iran has begun submitting self-collected samples from its Parchin military complex to the International Atomic Energy Agency. The news is consistent with an Associated Press report that one of the two Iran-IAEA side agreements never submitted to Congress allows Tehran to conduct critical portions of what should be independent, international inspections at Parchin—a site where Iran allegedly tested detonators needed to weaponize nuclear technology in the past.
"This report appears to confirm our grave concern that the Iran-IAEA side agreements permit Tehran to self-inspect its own nuclear sites. Without access to these documents it's impossible to verify that necessary mechanisms are in place to ensure Iran will abandon its pursuit of nuclear weapons. This is why, until the President complies with the law and provides the side agreements to Congress, we must keep the sanctions regime in place."
The Iran Nuclear Agreement Review Act of 2015 explicitly requires the President to submit any “side agreements” negotiated between “Iran and any other parties” to Congress prior to a mandated review period and vote, and before any statutory sanctions are lifted. As the law states:
WASHINGTON, DC—This week, Ways and Means Oversight Subcommittee Chairman Peter Roskam (R-IL) spoke at a Financial Services Roundtable event about ways to help Generation X afford their children’s college tuition, look after their aging parents, and plan for their own retirements. Roskam also announced upcoming Subcommittee activity on the Department of Labor (DOL) Fiduciary Rule, especially as it relates to millennials.
“I appreciated the opportunity to speak at this important event focusing on the many financial problems facing the Sandwich Generation. As a father of four, husband, and son, I know firsthand the immense pressure of putting kids through college, helping my mom, and saving for the future. We must continue to find new ways to help American families meet and overcome these challenges.”
227 Cannon HOB
Washington, DC 20515
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I chaired a Ways and Means Oversight Subcommittee hearing today focused on examining the rising cost of higher education and whether federal
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It was an honor to hear from Pope Francis at this morning's historic address to Congress. His Holiness exhibited the profound compassion and
Last week, I submitted the following letter to the editor to The New York Times in response to the column “Lawmakers Against the Iran Nuclear