House Education & Workforce Committee
Helping Americans succeed in the workforce is a leading priority for members on the Education and the Workforce Committee. That’s why the committee unanimously passed a bill to strengthen career and technical education and help prepare more students for today’s high-demand jobs. Mark MacCarthy, vice president for public policy at the Software & Information Industry Association, wrote in The Hill how this bipartisan proposal will “ensure that technical education can anticipate the demand for jobs and equip the next generation labor force to meet these challenges.”
Reforms Needed to Modernize the American Workforce
By Mark MacCarthy
July 18, 2016
Siri will update you on the weather, share a joke, and tell you what’s on your calendar – but what she won’t tell you is that she’s the reason many fear technology is the enemy of jobs. Not Siri alone of course, but the myriad of ways technology is automating systems and eliminating the need for manual processes has created a growing uneasiness about the future of work.
While this fear is very likely overstated, there is no question that technology is reshaping the way work gets done. It is time for policymakers, industry and educators to fully recognize this change, and do more to adjust to the modern business environment.
In a display of bipartisan unity July 7, the House Education and Workforce Committee took a significant step towards doing just that. With its unanimous passage of the Strengthening Career and Technical Education for the 21st Century Act, the Committee began the process of streamlining and modernizing the Carl D. Perkins Career and Technical Education Act – first passed in the Reagan Administration – to better meet the needs of today’s students and businesses.
The Perkins Act provides federal support to state and local career and technical education, or CTE, programs, which are created and operated by state and local education leaders. These programs prepare high school and postsecondary students with academic, technical, and employability skills. But over the years, they have clearly struggled to keep up with the realities and challenges facing today’s workers and businesses.
The proposed reauthorization will strengthen connections between CTE programs and business and industry. Doing so will help more precisely identify the career fields, along with the skills and credentials, needed regionally. The legislation also calls for a new biennial needs assessment that will ensure programs stay current as workforce needs evolve. These reforms will help CTE programs make certain students can compete for the particular types of jobs that exist locally – now, and in the future ...
If the House passes the current reform bill and the Senate follows with quick action, we will make meaningful progress to ensure that technical education can anticipate the demand for jobs and equip the next generation labor force to meet these challenges.
To read the full op-ed, click here.
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The Carl D. Perkins Career and Technical Education Act has provided federal support to state and local career and technical education programs for more than 30 years. H.R. 5587, the Strengthening Career and Technical Education for the 21st Century Act, updates the law to reflect today’s economic needs and the challenges that students and workers currently face.
In particular, I’m pleased that the bill streamlines the number of performance measures for postsecondary programs and aligns them with the performance measures in WIOA, retaining that law’s precedent-setting accountability standards that let taxpayers and lawmakers see clearly which programs work—and which programs don’t.
This bipartisan bill goes a long way toward ensuring that individuals who pursue a technical education have the knowledge and skills they need to succeed.
However, I believe it’s time we acknowledge that all education is career education and stop dividing the path to a high school degree into two tracks.
Students pursue education to develop the necessary skills to find a job, preferably a career, in a chosen field. It’s the same objective whether the student is pursuing a medical degree at an Ivy League university or taking automotive performance courses at the local community college.
Unfortunately, there is an unnecessary stigma attached to career and technical education. It’s too often referred to as the “other” track, with the incorrect implication that it’s the path individuals take if they won’t be able to handle the rigors of college. In reality, students who pursue CTE complete a diverse curriculum where they learn important skills for succeeding in the workplace, such as problem-solving, research, time management, and critical thinking. They are more engaged, perform better and graduate at higher rates than their college-bound counterparts. We should be celebrating that success and studying how we translate it across the board.
But as long as we have two educational tracks, we have a problem in the way people perceive those who choose career and technical education. We need to shift our perspective away from the idea that every student must attend an expansive and expensive four-year program to succeed in the workforce. Educational success is about more than just a degree. It’s about quantifiable skills that employers need in their employees.
A quality education is crucial to succeeding in today’s workforce. Unfortunately, our costly, bureaucratic, and outdated higher education system leaves too many Americans behind.
We all know the tough challenges that exist. College costs continue to rise. A dizzying maze of student aid programs discourages students from pursuing a degree or credential. Complex federal rules impede innovation and make it harder for students to pursue a degree more quickly and at less cost.
The net result is that it’s become harder and harder for Americans to realize the dream of a higher education. Without the skills and knowledge they need to succeed in the workforce, many men and women struggle to find good-paying jobs and earn a living to provide for their families.
Those who are fortunate enough to earn a degree are often saddled with student debt they can’t afford and unprepared to start their careers in an increasingly competitive and changing economy.
We have to do better. We have to open more doors to opportunity and help more Americans reach their full potential.
The bipartisan package of higher education reforms we’re considering is a positive step toward achieving that goal.
Together, these reforms will empower students and their parents to make informed decisions; simplify and improve the student aid process; enhance existing support for institutions serving minority students; and ensure strong accountability for taxpayer dollars.
We have more work to do to strengthen higher education, but today we are making important progress.
I want to thank my Republican and Democrat colleagues for putting their differences aside and working together to help more Americans pursue their dream of a college degree.
Thompson Statement: Markup of H.R. 5587, "Strengthening Career and Technical Education for the 21st Century Act"
It’s no secret that our country continues to face significant economic challenges, and it’s no surprise that many men and women are worried about their future and their family’s future. Just last week, a Gallup poll found that 54 percent—just 54 percent—of Americans believe today’s young people will live a better life than their parents.
As a father, I can say there is nothing a parent wants more for their children than a life that is better than their own. When you hear that only half of all Americans expect their children to have a brighter future than they did, it becomes clear that we need to do better. And we can do better—not just for our own kids but for the neighbor who can’t find a job, the friend from church who struggles to make ends meet, or the high school student who doesn’t believe he or she has what it takes to succeed.
With the Strengthening Career and Technical Education for the 21st Century Act, we have an opportunity today to advance reforms that will help these and many other Americans—especially young Americans—obtain the knowledge and skills they need to break the cycle of poverty and achieve a lifetime of success. The bill will modernize and improve current law to better reflect the challenges and realities facing students, workers, and employers.
The bill will empower state and local leaders by simplifying the application process for receiving federal funds and providing them more flexibility to use those resources to respond to changing education and economic needs. These reforms will help state leaders focus on preparing students for the workforce—not duplicative or overly prescriptive federal requirements—and enable them to determine the best way to do so.
Other reforms will help ensure career and technical education is providing students the skills they need to compete for in-demand jobs that exist in their local communities now and in the future. To accomplish that goal, the legislation promotes work-based learning and encourages stronger engagement with employers—both in developing and evaluating career and technical education.
To increase transparency and accountability, H.R. 5587 streamlines performance measures to ensure secondary and postsecondary programs deliver results, helping students graduate prepared to secure a good-paying job or further their education. The bill also includes measures to provide students, taxpayers, and state and local leaders the information they need to hold CTE programs accountable for delivering those results.
Finally, H. R. 5587 will reduce the federal role in career and technical education and limiting opportunities for the federal government to intervene in state and local decisions, and preventing political favoritism.
These reforms and others in this bipartisan bill will improve CTE for the many students who rely on it to help them pursue their dreams and accomplish their goals. And I’m confident they will also help more students do the same.
The substitute amendment I am offering makes a number of changes, including technical clarifications, to the underlying bill. Among them are changes to clarify eligibility requirements for postsecondary institutions and the innovation grants application process. Other changes will increase coordination between research and evaluation activities, improve professional development, and allow CTE funds to be used to support career and technical student organizations and to make instructional content widely available.
In closing, I’d like to thank Representative Clark and our colleagues on both sides of the aisle for the work they have done to move this bill forward. I urge all of my colleagues to support this important bipartisan legislation.
Kline Statement: Markup of H.R. 5587, "Strengthening Career and Technical Education for the 21st Century Act"
We are here because of inspiring individuals like Paul Tse. Paul is, in his own words, a proud graduate of a career and technical education program. These programs—created and run at the state and local levels—offer individuals the knowledge and hands-on training they need for a wide range of fields, from computer science and information technology to law enforcement and nursing. Successful CTE programs are often based on rigorous coursework and the workforce needs of local communities.
At a hearing the committee held in May, Paul testified how he struggled as a student in high school—poor attendance and lackluster grades. As his friends began making plans to go off to college, he remembered feeling embarrassed and helpless at the idea that he might be left behind. Then one day his life changed.
A family member suggested he look into a skilled trade as a possible career path. With the help of a guidance counselor, Paul enrolled in a CTE program at the Thomas Edison High School of Technology, located in Silver Spring, Maryland. His program focused on installing and maintaining heating, ventilation, and air conditioning systems. Soon after graduation, he received two offers to join local businesses as an apprentice.
In the span of a few years, Paul has been a student, apprentice, journeyman, and now, project manager. He has a promising, fulfilling career, and I might add, not a dime of student loan debt. Speaking of his experience as a CTE student, Paul said, “I am the American dream,” and he urged us to help ensure every child in America has the same opportunities he did.
I think all of us want to hear more stories like Paul’s, and that’s why this legislation is so important. In recent years, we have taken significant steps to help individuals receive the knowledge and skills they need to succeed. We modernized an outdated workforce development system and improved K-12 education, important achievements that will make a positive impact in the lives of many Americans.
Today we can build on those efforts and help further spread the promise of a quality education to more Americans. Indeed, many of the same principles that guided those efforts are also reflected in this bill: restoring control to state and local leaders; enhancing transparency and accountability for taxpayers; ensuring a limited federal role; and better aligning programs with in-demand jobs.
It’s because of these principles the bill includes reforms to ease administrative burdens and increase funding flexibility at the state and local levels; it’s why the legislation encourages stronger partnerships with local business leaders; it’s why the bill empowers state leaders to set clear measures of performance that serve the interests of students and taxpayers; and it’s why the legislation reins in the authority of the Secretary of Education and restricts the ability of the federal government to interfere in state and local decisions.
These reforms will help prepare students for today’s workforce, not the workforce that existed years ago. A great education is the great equalizer, but not every individual chooses the same path. For those who have a particular skill, talent, or passion, career and technical education is often the key that opens the door to a lifetime of success. That’s true for Paul Tse, and with this legislation, it can be true for many others as well.
I want to thank Representatives Thompson and Clarke for introducing a bipartisan bill that will improve career and technical education and help Americans compete and succeed in the workforce. I urge my colleagues to support the Strengthening Career and Technical Education for the 21st Century Act.
Kline Statement: Hearing on “Next Steps in K-12 Education: Examining Recent Efforts to Implement the Every Student Succeeds Act”
That’s not just my own personal view. It’s the view held by governors, state lawmakers, teachers, parents, principals, and superintendents who recently wrote that, “[The Every Student Succeeds Act] is clear: Education decision-making now rests with states and districts, and the federal role is to support and inform those decisions.” It’s also the view of most honest observers. As the Wall Street Journal editorialized, the law represents the “largest devolution of federal control to the states in a quarter-century.”
The reason for this hearing and our continued oversight is to ensure the letter and intent of the law are followed. A critical part of our effort is holding your agency accountable, Mr. Secretary, for the steps that are taken to implement the law. When you were with us in February, you said, “You can trust that we will abide by the letter of the law as we move forward …”
That is a strong statement, and it is one of several commitments you’ve made that the department would act responsibly. But actions speak louder than words. In recent months, we have seen troubling signs of the department pulling the country in a different direction than the one Congress provided in the law.
The first troubling sign is the rulemaking process itself. There are a number of concerns about the integrity of the negotiated rulemaking committee, including the makeup of the panel, the lack of rural representation, and the accuracy of statements made by department staff. The point of the negotiated rulemaking process is to build consensus among those directly affected by the law, yet it seems the department decided to stack the deck to achieve its own preferred outcomes.
The second troubling sign surrounds the long-standing policy that federal funds are to supplement, not supplant, state and local resources. Prior to the Every Student Succeeds Act, this rule was applied differently depending on how many low-income students a school served; some schools faced more onerous requirements than others. Last year, Congress decided the rule would be enforced equally across all schools. Now, school districts must simply show that funds are distributed fairly without prescribing a specific approach or outcome. The law explicitly prohibits the secretary from interfering, yet that is precisely what your proposal would do.
What the department is proposing would be both illegal and harmful to students and communities. It would impose a significant financial burden on states and force countless public school districts to change how they hire and pay their teachers. This regulatory effort is trying to achieve an end Congress deliberately rejected and that the nonpartisan Congressional Research Service warns goes beyond “a plain language reading of the statute.” No doubt you have good intentions, Mr. Secretary, but you do not have the legal authority to do this. I strongly urge you to abandon this flawed scheme.
The third troubling sign is the department’s accountability proposal. Let me note that there are policies in this proposal we are pleased to see, such as how states set long-term goals and measure interim progress. But in a number of ways, we also see the department’s bad habit for making decisions that must be left to states.
This is especially troubling given the law’s explicit prohibitions against federal interference, including how states compare school performance and identify schools for support. For years, states grappled with a rigid accountability system imposed by Washington. The Every Student Succeeds Act turns the page on that failed approach and restores these decisions back to state and local leaders. I urge you, Mr. Secretary, to adopt a final proposal that fully reflects the letter and spirit of the law.
We are raising these concerns because it’s vitally important for the laws written by Congress to be faithfully executed. And just as importantly, we are raising these concerns because we want to ensure every child has the best chance to receive a quality education. We cannot go back to the days when the federal government dictated national education policy—it didn’t work then and won’t work now.
If the department refuses to follow the letter and intent of the law, you will prevent state leaders, like Dr. Pruitt from Kentucky, from doing what’s right for their school districts. You will deny superintendents, like Dr. Schuler of Arlington Heights, Illinois, the ability to manage schools in a way that meets the needs of their local communities. And you will make it harder for teachers, like Cassie Harrelson from Aurora, Colorado, to serve the best interests of the students in their classrooms.
Later, we will hear from these individuals because they represent the people we want to empower. Every child in every school deserves an excellent education, and the only way to achieve that goal is to restore state and local control. That’s what the Every Student Succeeds Act is intended to do, and we will use every tool at our disposal to ensure the letter and intent of the law are followed.
While the federal government has long provided students with financial assistance to pursue a postsecondary education, for many, the college selection and financial aid process is complicated, burdensome, and confusing. Taking time to fully understand the available data can be an aggravating task that may get put off and ultimately ignored, often with disastrous consequences
In 2008, Congress attempted to make information about colleges and universities more transparent with the reauthorization of the Higher Education Act. That bill directed the secretary of education to collect and report on information from every college and university receiving federal student aid, including cost of attendance, the percentage of students receiving financial aid, and college completion rates. As a result, information from 7,000 colleges across the nation is now available to help students and their families plan for the future. But there is more that can be done.
Much of the data available because of the 2008 reforms does not take into account large numbers of students enrolled in higher education or fails to capture crucial information that students and families need. To make matters worse, many of the federal government’s efforts to increase transparency in higher education since 2008 have only added to the confusion and uncertainty many prospective students face.
That’s why I—along with my colleagues Mr. Messer and Mr. Sablan—introduced the Strengthening Transparency in Higher Education Act. This bill will improve the information students and their families need to make smart decisions about their education, providing a more complete picture of student populations on our nation’s college campuses. It will also begin to streamline the overwhelming maze of information currently provided to students and families at the federal level.
More specifically, the bill requires the secretary of education to create a consumer-tested College Dashboard. This dashboard will provide students with the key information they need to decide what school to attend—such as the completion rates of all students at that college or university, not just those attending college full time and for the first time.
To ensure students know this information is available to them, the bill also instructs the secretary to actively provide links to the College Dashboard pages of each institution that a student lists on his or her application for federal student aid. By improving and making more students aware of the information available, we can better assist them in making financially responsible decisions that will help them achieve the dream of obtaining a college degree.
Furthermore, this legislation will streamline many of the federal government’s existing transparency efforts—requiring better coordination between federal agencies and eliminating unnecessary initiatives.
It’s crucial that we continue to increase transparency in the country’s higher education system. The Strengthening Transparency in Higher Education Act is a positive step forward in that effort. The substitute amendment I am offering makes small technical changes to the base bill for clarity.
I urge my colleagues to support the amendment, as well as the underlying legislation
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Students and parents face a number of difficult questions when considering their higher education opportunities. Deciding how to responsibly finance and pay for their education is an important part of that process.
Unfortunately, the policies in place to promote the financial literacy of aid recipients are seriously lacking. In fact, in a survey of current students and recent graduates who are carrying a high level of student loan debt, more than 40 percent couldn’t remember ever receiving financial counseling—even though it was required before receiving their first loan.
The current system is ineffective and failing to help students make the best financial decisions for their future. Without the information and assistance they need, applicants could make a choice about financial aid that will have detrimental consequences not only in the near-term but for years to come.
That’s why I worked with Representatives Allen and Bonamici to introduce H.R. 3179, the Empowering Students Through Enhanced Financial Counseling Act. This bill will help Americans make smart decisions when it comes to financing their higher education by improving the timing and frequency of loan counseling. First, it will require individuals to receive their counseling before signing on the dotted line, helping students understand the responsibilities they are taking on and keeping them well-informed every step of the way.
Additionally, the legislation will bolster exit counseling to help borrowers make smart financial decisions as they leave school. It’s not enough to be aware of financial options and commitments before and during school. We need to empower students to make smart financial decisions as they begin to repay their college loan commitments, as well.
H.R. 3179 will also enhance the content of financial aid counseling, ensuring it is tailored to a borrower’s unique needs and individual circumstances, and it will require the secretary of education to maintain a consumer-tested, online counseling tool for institutions to use in providing required financial counseling.
In today’s anemic economy—as college costs continue to rise—students and their families cannot afford the cost of making poor financial decisions in pursuit of a higher education. The Empowering Students Through Enhanced Financial Counseling Act will help students receive the information they need to understand their options and make financially responsible decisions as they work to achieve their goals.
The substitute amendment I am offering makes noncontroversial technical changes. I urge my colleagues to support the amendment and the underlying legislation.
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Like many aspects of the student aid system, the application for aid can be confusing and too complex for many students and families to complete. The FAFSA includes 108 questions requesting information on everything from the net worth of investments to complicated tax information. Many of these questions rely on data that students do not yet have or are so complicated they deter applicants from even completing the form.
As the chairman noted earlier, it’s critically important that students have the information they need to make timely, informed decisions about higher education. That includes information on what aid might be available to help them pursue a college degree and the responsibilities that come with accepting assistance. If the current process deters them from even completing the application for aid, how can students possibly get the help they need? That is why, based on the recommendation of higher ed leaders in Nevada, I began working with some of my colleagues on the committee to reform the FAFSA and improve the student aid application process.
The Simplifying the Application for Student Aid Act—which I am proud to sponsor with Dr. Roe and Representatives Polis and Pocan—is the fruit of that labor and does exactly what the title suggests. It will streamline and improve the application process through a number of commonsense measures, all of which will help students and parents access the financial aid information they need in a timely manner to better understand their higher education payment options.
First, it will allow students to use income data from two years prior to the date of application. Traditionally, the FAFSA has relied on income tax data from the previous year, but that data is not readily available when students should begin filling out their applications. While the Department of Education currently has the authority to allow students to use “prior-prior year” data, the department only recently began taking advantage of this authority.
This bill will ensure students are able to use prior-prior year data in the future. This will allow them to complete the FAFSA earlier and receive information about their aid options sooner. It will also provide aid administrators more time to verify the income of applicants, both strengthening the integrity of the federal student aid system and enabling administrators to provide students with accurate aid information as soon as possible.
Additionally, the legislation will require the Department of Education to allow more applicants to easily import their available income data through the IRS, helping them automatically populate answers to many FAFSA questions with information from their tax returns, making it easier on students and parents to accurately complete the form. The bill will also require the FAFSA be available on a mobile app and require the online and paper versions to be consumer-tested. Both of these measures will make the application process easier and more user-friendly.
By improving the application for student aid, we can help more students make smart decisions about college and realize that a college degree is within reach.
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In an effort to help close this diversity gap and address our nation’s doctor’s shortage, last year I joined with Dr. Ruiz from California to introduce H.R. 2927. That bill allowed Hispanic Serving Institutions to utilize existing grant funds to create programs that support, encourage, and mentor prospective physicians as they navigate the necessary requirements to be accepted into medical school.
Congress originally created the Developing Hispanic-Serving Institutions Program in 1992. This program helps promote education opportunities for Hispanic students and allows the institutions serving them to make improvements that increase the quality of the education they offer.
Today, there are more than 400 HSIs across the country, and many other institutions are on the verge of becoming HSIs. In my state, the College of Southern Nevada, UNLV, and Nevada State College, are among many other schools that either are or are on the verge of becoming an HSI. Additionally, the number of young Hispanic undergraduates enrolled full-time at a two- or four-year college has more than tripled in the past 23 years.
It is clear Hispanic students have greater access to education opportunities than they did before the Developing HSIs Program was created. Still, as I mentioned before, the Hispanic population remains underrepresented in various parts of the workforce, particularly in health care.
After meeting with local health care and education leaders in Nevada, and working with the chairman and other members of the committee to address this issue, I am happy to offer H.R. 5529, the Accessing Higher Education Opportunities Act, with Congressman Hinijosa and Dr. Ruiz.
H.R. 5529, expands on the bipartisan work of H.R. 2927 by allowing HSIs to use funds to support students preparing for all health care-related doctoral programs. Additionally, I want to thank Congressman Hinojosa for joining with me and Dr. Ruiz on this bill and adding an important provision that allows HSIs to work with local school districts to start or enhance dual enrollment opportunities and early college programs at high schools.
These programs not only help students get into college, but they also enable students to earn college credits earlier in their academic career. As a strong supporter of dual enrollment programs I want to thank Congressman Hinojosa for strengthening the bill with this important provision.
Ultimately, this bill will help us address a growing doctor’s shortage and close the diversity gap among physicians by helping students at HSIs achieve the dream of higher education.
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Our country’s higher education system offers students from all walks of life opportunities to acquire the knowledge and skills they need to achieve a lifetime of success. It has helped countless individuals pursue rewarding careers, accomplish personal goals, and earn a living to provide for their families.
Unfortunately, too many Americans are struggling to realize the dream of a higher education or believe the dream of a college degree could never become a reality for them. That’s because, as I have noted before, our current system is too costly, too bureaucratic, and outdated.
Since 2005, average tuition and fees have increased by 40 percent at four-year public institutions and by more than 25 percent at four-year private nonprofit institutions. Meanwhile, a dizzying maze of student aid programs discourages students from pursuing a degree, and complex federal rules impede innovation and prevent state and institutional leaders from deciding what’s best for their students.
In the end, many students are either unable to complete college, or they graduate saddled with debt and lacking the skills they need to compete in the workforce. It shouldn’t be this difficult to earn a degree, and students and families deserve better.
That’s why reforming and improving the Higher Education Act remains a leading priority for this committee, and we’ve made significant progress in achieving that goal. While there is a lot of work still to be done to complete the reauthorization process, that doesn’t mean we shouldn’t take steps now to deliver important reforms students, parents, and taxpayers need.
The bills under consideration today will help us do just that. They are all bipartisan reforms that adhere to the principles we laid out last Congress—reforms that will empower students and families to make informed decisions; simplify and improve student aid; promote innovation, access, and completion; and ensure strong accountability with a limited federal role.
These proposals will help students and parents better understand their higher education options. Choosing where to go to school and how to pay for it can be a daunting task, but having the right information—and having it early—can help students make smarter, more timely decisions. These are decisions that will have a significant impact on their lives for years to come, and it’s critically important for students and families to get them right.
The bills will also enhance existing support for institutions serving minority students and hold those institutions accountable for how they are using that support. These reforms will help more students access a postsecondary education and ensure taxpayer dollars are being well spent.
Together, they will help more Americans acquire the knowledge and skills they need to compete and succeed in the workforce. Yes, they are only part of a broader solution, but they will make a real difference and provide the help students and parents need now.
I want to thank my Republican and Democrat colleagues for their work in developing these proposals. By working together, we are delivering the kind of positive, commonsense reforms that will strengthen our higher education system, and more importantly, help make a postsecondary education not just a dream but a reality for more Americans.
I look forward to advancing these reforms and to the work we have ahead of us to further strengthen higher education for students, families, and taxpayers.
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I want to thank my colleagues, Representatives Boustany and Thompson, for their leadership on this important issue. It’s not very often that we have bipartisan legislation that will make a real difference in lowering health care costs for working families, and I’m pleased to see this bill come to the floor today.
This legislation is a no-brainer. As a physician with more than 30 years of experience, I’ve personally seen the need for commonsense reforms that will remove barriers to lower health care costs and give Americans more control over their health care decisions.
Because of ObamaCare, I constantly hear from families who are paying higher premiums and out-of-pocket costs for less coverage and lower-quality of care. I hear from small business owners who desperately want to help their employees acquire health insurance, but face costly regulations that make it harder, if not impossible, for them to do so.
Employers of all sizes are implementing innovative solutions to address rising health care costs, and we should do everything we can to support those efforts. Unfortunately, misguided federal rules too often stand in the way.
Regulatory guidance issued by the IRS that penalizes small businesses who offer stand-alone Health Reimbursement Arrangements is the perfect example. HRAs are popular among both workers and employers. Employers offer HRAs to help their employees pay for health care. In return, families are provided greater flexibility and the opportunity to set aside pretax income for medical expenses.
It simply doesn’t make sense for the federal government to restrict a positive tool aimed at expanding access to affordable health care coverage. It’s unconscionable that ObamaCare is penalizing small businesses for trying to do the right thing and alleviate the financial burden on working families.
That’s why this bill is so important. We need to encourage policies that empower every American with affordable coverage, provide more choice, and promote a healthy workforce. And I hope we can all agree that we should eliminate misguided rules that only make it harder for families and small businesses to obtain the health care coverage they need.
I urge my colleagues to support this bipartisan legislation, which will restore the ability of small businesses to offer HRAs.
Believe it or not, responsible leadership did emerge two years ago, in the form of Reps. John Kline (R-Minn.) and George Miller (D-Calif.), who pushed through bipartisan legislation that would preserve benefits for everyone over the long-term by enabling pension plans to trim benefits for some over the short-term.
Alas, this law is being undermined before it has had a chance to work. Last year, the Central States Pension Fund , which supports retired Teamsters, asked the Treasury Department to approve a Kline-Miller solvency plan that would have reduced payments by an average of 28 percent for about 115,000 current retirees. The alternative, Central States argued, was bankruptcy within a decade. But last month a special master designated by Treasury rejected the plan, asserting that it didn’t really assure long-term solvency because its assumptions about future returns on investments were too rosy. The remedy to that, of course, would be to propose even greater benefit cuts, something Central States has said it cannot conscientiously do. And so the financial death spiral continues.
Critics of Treasury’s decision smelled an election-year evasion; an unsurprising hunch given the fact that 46 senators, mostly Democrats, signed a letter in April urging rejection of the Central States plan, and that Democratic presidential insurgent Sen. Bernie Sanders (I-Vt.) has been campaigning on a proposal to bail out the multi-employer pensions with federal funds. Mr. Miller, now retired from Congress, told Politico the Treasury ruling “was a calculated response to sort of stop the discussion in this political year.”
Treasury insists that is untrue; we take the department at its word. Still, if Central States says it has no alternative to a proposal Treasury says isn’t adequate, exactly what is supposed to happen next? If Central States collapses and the PBGC takes over, retirees would, by law, get even less than they would under the just-rejected proposal. And if the PBGC itself is insolvent — an alarmingly real possibility — retirees might get almost nothing.
Mr. Sanders, characteristically, advocates federal rescue, without explaining why this is more feasible politically than it was in 2010, when a Democratic Congress declined to act on a similar proposal. Nor is it clear why defined-benefit pensioners should have a higher claim on taxpayer resources than the many people who do not have such pensions — and, indeed, often make less money than union members.
Not for a minute do we underestimate the plight of pensioners facing a major financial hit that they were told, long ago, they would never have to face. What we do dispute is that there’s a cost-free way out of their predicament. The sooner politicians level with them about that, the better.
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Kline Statement: Hearing on "The Administration's Overtime Rule and its Consequences for Workers, Students, Nonprofits, and Small Businesses"
That is precisely why this committee—more specifically, Republicans on this committee— have repeatedly called for a responsible effort to streamline and modernize federal overtime rules. Workplaces are more dynamic and innovative than they have ever been, and the needs of today’s workers are much different than for those who worked when the law was written more than 75 years ago. Workers and employers have a better shot to succeed when federal policies reflect the changing realities of our economy.
The Department of Labor had an opportunity to build consensus around a set of responsible reforms that would have garnered broad, bipartisan support. Yet the department chose once again to take an extreme, partisan approach that will hurt the very people they claim they want to help. This rule will disrupt the lives of countless individuals and do nothing to remove the regulatory landmines that are harmful to workers and employers.
That’s what small business owners, college and university administrators, state and local officials, and heads of nonprofit organizations have warned about. But these warnings were ignored. That’s right—the department ignored the voices of those who must implement this rule in their workplaces, on their campuses, and as they serve the needs of people in their communities.
Instead, the department listened to the same progressive voices who have been wrong for so long about how to address the challenges facing working families. The same voices who claimed a trillion dollar “stimulus” bill would create jobs and deliver a strong economy. It didn’t. The same voices who claimed a government takeover of health care would lower costs and protect the health care people liked. It hasn’t. Those same voices now claim this overtime rule will provide a pay raise for millions of Americans. It won’t.
The regulatory onslaught under this administration is unprecedented. The president and his liberal allies have advanced new rules governing retirement advice, health and safety, energy, union organizing, federal contracting, financial markets, health care, and wages. Still there are those who can’t understand why the economy is anemic, or why job growth is sluggish, or why wages are largely stagnant.
Now we have an overtime rule that will do more harm than good, particularly for lower-income workers and younger Americans. Chairman Walberg has led our efforts in this area for years, and I would like to yield to him to explain in more detail the costly consequences of this final rule.