[House Hearing, 105 Congress]
[From the U.S. Government Publishing Office]



 
                DEPARTMENTS  OF  VETERANS  AFFAIRS  AND
                 HOUSING  AND  URBAN  DEVELOPMENT,  AND
                  INDEPENDENT AGENCIES APPROPRIATIONS
                                FOR 1998

=========================================================================

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                       ONE HUNDRED FIFTH CONGRESS

                              FIRST SESSION
                                ________

            SUBCOMMITTEE ON VA, HUD, AND INDEPENDENT AGENCIES

                    JERRY LEWIS, California, Chairman

TOM DeLAY, Texas                     LOUIS STOKES, Ohio
JAMES T. WALSH, New York             ALAN B. MOLLOHAN, West Virginia
DAVID L. HOBSON, Ohio                MARCY KAPTUR, Ohio
JOE KNOLLENBERG, Michigan            CARRIE P. MEEK, Florida
RODNEY P. FRELINGHUYSEN, New Jersey  DAVID E. PRICE, North Carolina
MARK W. NEUMANN, Wisconsin           
ROGER F. WICKER, Mississippi         

 NOTE: Under Committee Rules, Mr. Livingston, as Chairman of the Full 
Committee, and Mr. Obey, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.

  Frank M. Cushing, Paul E. Thomson, Timothy L. Peterson, and  Valerie 
                     L. Baldwin, Staff Assistants
                                ________

                                 PART 4
                                                                   Page
 Federal Emergency Management Agency..............................    1
 Corporation for National and Community Service...................  131

                              

                                ________

         Printed for the use of the Committee on Appropriations

                                ________

                     U.S. GOVERNMENT PRINTING OFFICE
40-344 O                    WASHINGTON : 1997


------------------------------------------------------------------------

             For sale by the U.S. Government Printing Office            
        Superintendent of Documents, Congressional Sales Office,        
                          Washington, DC 20402                          







                       COMMITTEE ON APPROPRIATIONS                      

                   BOB LIVINGSTON, Louisiana, Chairman                  

JOSEPH M. McDADE, Pennsylvania         DAVID R. OBEY, Wisconsin            
C. W. BILL YOUNG, Florida              SIDNEY R. YATES, Illinois           
RALPH REGULA, Ohio                     LOUIS STOKES, Ohio                  
JERRY LEWIS, California                JOHN P. MURTHA, Pennsylvania        
JOHN EDWARD PORTER, Illinois           NORMAN D. DICKS, Washington         
HAROLD ROGERS, Kentucky                MARTIN OLAV SABO, Minnesota         
JOE SKEEN, New Mexico                  JULIAN C. DIXON, California         
FRANK R. WOLF, Virginia                VIC FAZIO, California               
TOM DeLAY, Texas                       W. G. (BILL) HEFNER, North Carolina 
JIM KOLBE, Arizona                     STENY H. HOYER, Maryland            
RON PACKARD, California                ALAN B. MOLLOHAN, West Virginia     
SONNY CALLAHAN, Alabama                MARCY KAPTUR, Ohio                  
JAMES T. WALSH, New York               DAVID E. SKAGGS, Colorado           
CHARLES H. TAYLOR, North Carolina      NANCY PELOSI, California            
DAVID L. HOBSON, Ohio                  PETER J. VISCLOSKY, Indiana         
ERNEST J. ISTOOK, Jr., Oklahoma        THOMAS M. FOGLIETTA, Pennsylvania   
HENRY BONILLA, Texas                   ESTEBAN EDWARD TORRES, California   
JOE KNOLLENBERG, Michigan              NITA M. LOWEY, New York             
DAN MILLER, Florida                    JOSE E. SERRANO, New York           
JAY DICKEY, Arkansas                   ROSA L. DeLAURO, Connecticut        
JACK KINGSTON, Georgia                 JAMES P. MORAN, Virginia            
MIKE PARKER, Mississippi               JOHN W. OLVER, Massachusetts        
RODNEY P. FRELINGHUYSEN, New Jersey    ED PASTOR, Arizona                  
ROGER F. WICKER, Mississippi           CARRIE P. MEEK, Florida             
MICHAEL P. FORBES, New York            DAVID E. PRICE, North Carolina      
GEORGE R. NETHERCUTT, Jr., Washington  CHET EDWARDS, Texas                 
MARK W. NEUMANN, Wisconsin             
RANDY ``DUKE'' CUNNINGHAM, California  
TODD TIAHRT, Kansas                    
ZACH WAMP, Tennessee                   
TOM LATHAM, Iowa                       
ANNE M. NORTHUP, Kentucky              
ROBERT B. ADERHOLT, Alabama            

                 James W. Dyer, Clerk and Staff Director








DEPARTMENTS OF VETERANS AFFAIRS AND HOUSING AND URBAN DEVELOPMENT, AND 
              INDEPENDENT AGENCIES APPROPRIATIONS FOR 1998

                              ----------                              

                                           Thursday, March 6, 1997.

                  FEDERAL EMERGENCY MANAGEMENT AGENCY

                               WITNESSES

JAMES L. WITT, DIRECTOR
GARY JOHNSON, CHIEF FINANCIAL OFFICER

                     Subcommittee's Opening Remarks

    Mr. Lewis. The meeting will come to order.
    Good morning, ladies and gentlemen. Today we will spend 
much of the day taking testimony from the Federal Emergency 
Management Agency, called FEMA. It is the country's emergency 
management agency. We will be discussing their fiscal year 1998 
budget request.
    For 1998, FEMA is requesting $3,188,235,000, an increase 
of--I see they're calling us. Let's go vote, Lou, and then come 
back. Maybe we can get some of the Members to come back.
    [Recess.]
    Mr. Lewis. If the meeting would come back to order, good 
morning again. It is my pleasure to welcome James Lee Witt with 
us one more time, and by way of formal introduction, I will 
talk about his budget, but then have some other remarks before 
we take his testimony.
    As I have suggested, today we are taking testimony 
regarding the Federal Emergency Management Agency's fiscal year 
1998 budget request, which is an increase of $1,384,679,000 
over the 1997 appropriated level. However, over $2.7 billion of 
the 1998 request is for disaster relief activities; that is, 
responding to disasters that have already taken place in 
various places in America, leaving some $480 million for all 
the other programs. This number is actually a slight reduction 
over the comparable 1997 figure.
    Testifying on behalf of FEMA today will be its talented--
and I underline--and very able Director, Mr. James Lee Witt. 
Mr. Witt, you are always welcome to this committee. I invite 
you to introduce your FEMA colleagues who are with you this 
morning and then proceed with your testimony as you wish. Your 
entire testimony will be included in the record.
    In the meantime, let me step aside and suggest to those in 
the room who don't know that James Lee and I early on had 
conversations, as he was coming to this job, about the fact 
that America does find itself having disasters from time to 
time and place to place.
    Not so long ago there was a stir in the Appropriations 
Committee about the fact that California had so many disasters, 
and people who chose to live on the coast ought to take care of 
that themselves. Some of us saw fit to suggest that disasters 
are not known to only one State. But, in connection with that, 
historically America has always been a family. We know that one 
is going to come along; we just don't know where. Currently 
we're experiencing that absolutely in a fashion that would 
cause even the most cynical, I hope, to begin to understand.
    Mr. Witt, before you give your statement, with me today is 
my colleague, Louis Stokes of Ohio, who is in the midst of our 
most current circumstance. I know that he has comments that he 
wishes to make. Again, welcome to the committee.
    Mr. Stokes.
    Mr. Stokes. Thank you, Mr. Chairman. Mr. Witt, it is always 
a pleasure to welcome you back before our subcommittee. We've 
had you before us on many occasions and have had the 
opportunity on those occasions to discuss some of the most 
serious problems confronting our Nation.
    This has been quite a week for you. You have been touring 
the damaged areas of Arkansas on Tuesday with the President, 
and touring the flood ravaged Ohio River Valley yesterday with 
the Vice President, so I'm sure, in terms of what you have seen 
in those two places, you will have some good testimony for us 
today relative to that.
    Obviously, no one yet knows the extent of the recent 
disasters or whether current funding in the Disaster Relief 
Fund will be adequate to address the needs of this year, but I 
hope I speak for all members of this subcommittee when I say 
that we do stand prepared to do what is necessary to help 
reconstruct the lives of those devastated by these recent 
disasters and others.
    Pursuant to that, I am sure that all the members of the 
subcommittee today will have some very penetrating questions 
regarding those disaster areas, and we appreciate your 
appearance here today so that we can discuss this with you.
    Mr. Chairman, I appreciate the opportunity to make this 
opening statement and I yield back my time.
    Mr. Lewis. Thank you, Mr. Stokes.
    Mr. Witt, as I call on you, the vote on the floor was 
unexpected and I presume, and hope, that some other members 
will come along here shortly. In the meantime, some of them may 
be swimming to the hearing. But, one more time, welcome.

                       DIRECTOR'S OPENING REMARKS

    Mr. Witt. Thank you, Mr. Chairman, and Congressman Stokes. 
Thank you for your kind words.
    I am joined today by Gary Johnson, our Chief Financial 
Officer and Barbara Jacobik, our Budget Officer. Together, I 
hope that we can respond to your questions. We also have with 
us our executive management team of Associate Directors, who 
will help answer specific questions, if needed.
    It seems that we start out each year talking about where I 
have just been, the terrible events I have just seen, and what 
we're working on. Each year we talk about these terrible events 
and the impact that they have, and the fact that we cannot 
forecast when a disaster may happen. That doesn't mean that we 
cannot lessen the impact of an event when it occurs in the 
future. We can make a difference. In 1997 and 1998 we at FEMA 
will suggest a new path that all of us can take to make a 
difference in the future for our country.

                    PRE-DISASTER MITIGATION CONCEPT

    We need to get the message across that we can break this 
cycle. As disasters become more and more devastating, we need 
to start raising our own expectations and ask what more can we 
do to make a difference for communities. We need to set higher 
standards in building our communities, and we have made our 
mission of protecting public health and safety a goal with 
individuals and communities as the number one priority. We 
share a goal here, and I think we can do better. I think we all 
know that.
    We do a great deal now in mitigation. I think everyone 
knows what we have been able to do in mitigation with funds 
authorized by section 404 of the Stafford Act, not only in 
Arnold, MO, but in Memphis, TN, Houston, TX, California, and 
all across our country.
    But we shouldn't have to wait for these problems to happen. 
We should be able to do something before these events take 
place. Much of our most significant work in reducing the risk 
with mitigation is only targeted after a disaster happens. 
Planning and preparedness work cannot be rewarded under our 
current disaster assistance program. Nature has to force our 
hand.
    The strong message of what our communities can do to 
strengthen building codes, to make schools and public 
facilities safer, and to lessen the impact of these events, has 
to be heard outside of Washington, D.C., outside of the walls 
of FEMA, and outside of the emergency management community.
    The idea of reducing risk has to enter the mainstream. No 
one knows better than each of you in this committee room that 
the losses from recent disasters are neither small nor rare. 
That is why we are seeking $50 million in pre-disaster 
mitigation funding to begin this new program.
    Over the past four years that we have worked together, we 
have seen disaster after disaster, we have responded, and have 
helped communities recover. We have streamlined that response 
process, and we're doing it better than FEMA has ever done it 
before. This is because we have developed a State, local and 
Federal partnership that I think has made a difference. We can 
use that same partnership to establish a pre-disaster 
mitigation program to work with those high-risk communities 
across our country.
    What I suggest we look at trying to do is start developing 
some pilot projects to identify high-risk communities, go into 
the community as a team, bringing in the business community and 
the insurance industry, and sit down around the table with 
local elected officials in that community and say ``This is 
your risk, a high risk, and we can minimize that risk.''
    By doing this, we will save disaster dollars. We will save 
taxpayers' dollars. Every mitigation project we have done, 
every dollar we have spent has saved two dollars in future 
losses. It's a wise thing to do, and it just makes good sense. 
It can reduce the risk of people losing their lives and 
eliminate the frustration people go through when they have a 
disaster. It helps communities not only to recover faster, but 
helps lessen the impact of the disaster on their community.

                          disasters in midwest

    In Arkansas this week, the tornado went from Arkadelphia, 
all the way to northeast Arkansas in Greene County, along a 
250-mile swath. There were 26 fatalities from that tornado. 
It's going to take a lot to rebuild those communities. Some of 
them were devastated.
    Yesterday, we were in Ohio, West Virginia and a part of 
Kentucky. Ohio had six fatalities. They've had record floods in 
Ohio, in areas that have never flooded before. In Kentucky, 
there have been 18 fatalities.
    So, I think we can lessen the loss of life, and lesson the 
impact on individuals and communities by forging that 
partnership with private industry and making a difference for 
communities. We have to start somewhere, and I think we need to 
start now.
    We have done some good things with mitigation, but it has 
been after the impact of a disaster and as we're rebuilding. 
Mr. Chairman, and members of the committee, I think this can 
make a difference, and I think this can help cut disaster 
costs.
    As we continue to streamline our programs and streamline 
FEMA, this is an area that I think will help do more than just 
respond. I think that's the way we need to go, Mr. Chairman.
    Thank you.
    [The information follows:]

[Pages 5 - 19--The official Committee record contains additional material here.]


                      NEED FOR EFFICIENT RESPONSE

    Mr. Lewis. Thank you very much, Mr. Witt.
    I want the members of my committee to know, as well as 
those who have an interest in FEMA's work, that I feel FEMA has 
done almost a phenomenal job in terms of their response to a 
variety and mix of disasters across the country during the time 
that I have been Chairman.
    There are, Mr. Director, some concerns that I would like to 
communicate to you for the record today. You and I have talked 
a little bit about some of these, but let me be specific.
    As I look at just the television reports of that horrendous 
damage in Arkansas, the impact of tornadoes, the flooding along 
the Ohio River, certainly the flooding reminds me of the 
flooding that was some 300 miles away from my own district, but 
still in my State of California, not so long ago.
    As I reviewed some of those circumstances, there is 
absolutely no question that public officials and communities 
alike have been extremely pleased with both the sensitivity and 
the quick response of FEMA in terms of that initial evaluation 
of the impact of these disasters.
    I am concerned, however, that there are circumstances where 
really the paperwork and follow-up response has gotten in the 
way of building upon some of that public confidence. Frankly, I 
must say, Mr. Witt, it is my personal view, having been so 
extensively exposed to you and your work and your concern, that 
much of the problem I would point to may lie somewhere at the 
second and third level, where some of those personnel haven't 
had a chance to leave Washington and go out and see those 
people and those circumstances.
    For example, in the flooding that took place in 1995 in 
California, there still are circumstances where we recognized 
the disaster, the President declared it a disaster, there was 
funding to be designated, where the funding has not arrived 
yet. Under those circumstances, the communities are severely 
impacted. There's no doubt about it.
    When we do have money in the pipeline, there is no doubt, 
and I know that if you were pressing that button, it would have 
happened at another time. So I am very concerned that people 
who care about the agency, who work here in Washington, 
recognize that efficiency is very, very important when you're 
dealing with people in crises.

                             LEVEE PROBLEM

    I would like to also mention to you that there is concern 
presently in California relative to those endless miles of 
levees in Northern California, largely on private property, 
that nonetheless were designed by people for flood protection.
    One of the pieces of our history at home that few people 
remember is that one of the great accomplishments of this 
century involved a kind of bipartisan, nonpartisan effort 
within my State. Then Governor Pat Brown struck a compromise 
that should be remembered by everybody who looks at the 
problems we have in our huge State. He brought Democrats and 
Republicans together, recognizing that flooding in Northern 
California had nothing to do with party, but it certainly led 
to crisis after crisis, year in and year out.
    At the same time there was another crisis developing in the 
south, and that was the desperate need for the delivery of 
water. The compromise between north and south was to build 
flood protection up north and, indeed, deliver water down 
south.
    Today, we find ourselves in a circumstance where, if you 
would but look, if you took us back before that flood control 
was done in Northern California, the disaster we had recently 
would have been more than just a disaster. It would have been 
something that no one could contend with.
    Interestingly enough, members and citizens in Northern 
California today remember the need for flood protection, and 
ofttimes they forget about the need to deliver water down 
south. Thus, we want to tap water to flush the bay or do other 
things besides actually make sure that people are first in 
line.
    Having said all that, in connection with those levees, 
there currently is a ponding problem up there that many are 
concerned about. There is a need for pumping that could lead to 
a secondary disaster unless we find a solution in connection 
with that. I know you're somewhat aware of it, but I would like 
to hear your comments regarding how we might go about solving 
that problem.
    Mr. Witt. Thank you, Mr. Chairman.
    The pumping issue in California involves a lot of private 
farmland. There is a lot of water there, and the State and 
Governor Wilson have started doing some pumping for those 
individuals. Some farmers even took it upon themselves to 
repair some of the levees, and have collected a million dollars 
on their own account to help repair some of the private levees 
that protected their farmland.
    My concerns were--and I asked a team to go out and look 
when they called about the pumping problem--is it going to 
create a problem if we get more rain, and is it going to create 
a problem if the snowmelt is very fast? Is it going to create 
more flooding problems and more levee breaking problems? So I 
asked the Corps of Engineers and our people, to go out with the 
State and look at these areas to make sure that that was not 
going to happen, and to determine if this flooding was or had 
the potential to create a public health problem.
    The response that I got back was that it was not creating a 
public health problem. The only problem was, and continues to 
be, the fact that the standing water is deteriorating the 
levee.
    Mr. Lewis. Correct.
    Mr. Witt. And that's a concern of mine. So the Corps is 
looking at that now to make a determination for us so that I 
can make a decision on whether or not we need to help the 
State, and reimburse them for that pumping.
    Mr. Lewis. I appreciate that response, and I will want to 
be working with you very closely in connection with those 
developments.

                              usgs mapping

    Let me mention an item that I did mention to Katey McGinty, 
who was before us yesterday. As you know, she runs the 
President's Council on Environmental Quality. I understand that 
John Garamendi, who is a Deputy Secretary of the Interior, has 
suggested that FEMA allocate, or be given to allocate, two 
million dollars of funding that would allow USGS to map and do 
some measuring relative to those levees, where we have, as I 
suggested, some 4-6,000 miles of levees, that we don't have 
enough information about.
    I do know that you have experience with such USGS mapping 
in other parts of the country, and you and I have discussed the 
fact that very little has come from that, in terms of really 
being helpful. It may be that Mr. Garamendi is not aware of the 
current technology that is available to us.
    The item I discussed with Miss McGinty is the fact that now 
an item that used to be in the black, in the intelligence 
world, is now available and we can talk about it. But using 
radar technology and an appropriate aircraft, we are able to 
fly over areas like this. We can measure strength, et cetera, 
pretty precisely, and do it reasonably.
    I would suggest that maybe you and I should work together 
on the possible exercising of that technology in terms of these 
levees in Northern California. It could very quickly, as soon 
as we have a pattern of decent weather here, very quickly 
provide tools that could address the very mitigation issues 
that you mentioned in your opening statement.
    Mr. Witt. Mr. Chairman, I agree with you. The first time 
that we used USGS in this endeavor was in 1993 in the Midwest. 
The report we got was a very nice, detailed report. We also 
used NASA and the CIA imagery satellite shots in the Midwest 
that showed the moisture content in the ground what would 
happen if we got ``x'' amount of rain with that moisture 
content, and exactly where that water would be.
    So, we have held up on the request for the two million 
dollars they're asking for right now, to make sure we would 
benefit from what this would do to help us resolve future 
problems in levees and future problems in flooding. We're 
looking at that now.
    Mr. Lewis. There is no question that this could be a very, 
very valuable tool. The potential is very great.
    In fact, when you look at the aftermath of the Ohio Valley 
circumstance, the same technology may very well fit there. 
Since it's available to us, we ought to begin to exercise it.

                  submission of congressional reports

    Let me move on just a little and then turn to my colleague. 
I was going to begin, before we had this most recent sensation 
across the country, I was going to begin by taking a few 
moments--I must say, some within my staff would suggest I 
should chide the Director. Frankly, I will never forget that 
trip we took to Oklahoma City together, just after that 
explosion. There were still bodies in the building.
    I also know we've had conversations on the 1995 flood that 
hit Santa Barbara and other areas. If that had been in my 
district--the Lord had decided it wouldn't go in that 
direction--we would have had a catastrophe because there was 
tens of billions of dollars of property involved, just with a 
shift in the weather pattern. So I'm not in the chiding 
business here.
    But at another level within the agency, I might very well 
be. It is very important to the committee's work that people 
help you follow through while you're doing the important work 
that really is your key responsibility.
    FEMA has developed a well-deserved reputation as the most 
responsive of agencies. That has not always been the case. I 
remind myself and my staff of that all the time.
    I would be remiss, though, in my responsibilities, Mr. 
Director, as Chairman, if I did not bring to your attention the 
fact that the Agency has missed virtually every report deadline 
and directive that was included in the 1997 appropriations 
bill, and the conference report that accompanied that bill.
    To be specific, FEMA had a statutory requirement to provide 
a comprehensive report regarding disaster relief expenditures 
within 120 days of enactment of the 1997 Act. We are now, you 
know, somewhat beyond that, 150 days and counting. Only last 
Friday did we receive a draft of that report, and I really 
don't have any idea when the report will be finally delivered.
    You and I have talked about the fact that I want you out 
there doing what you're doing, but in the meantime, I would 
like to have the message go back in the other direction. Martha 
and others are very good at communicating with us this way, and 
I would like to have them turn around and communicate the other 
way as well.
    Included in our conference report was a directive to 
provide within 90 days a comprehensive, though not complicated, 
report on certain questions relating to the Urban Search and 
Rescue Program. That report took over 140 days to deliver. I am 
compelled to tell you that, while it was informative, it 
unfortunately did not address all the questions raised by the 
conferees.
    I am laying this foundation, Mr. Director, to make another 
point that I think is very important as we evaluate your budget 
request.
    The conferees asked that you include in the fiscal year 
1998 budget justification an activities report of the Disaster 
Resources Board, as well as a comprehensive priority list of 
all your emergency equipment needs, so that you will not be 
forced to operate with obsolete and worn out equipment. We 
thought we could help your agency, and you specifically, by 
having this information. But, of course, it was not even 
mentioned in your budget accounts.
    There are other examples of monthly reports of disaster 
relief expenditures, a predisaster mitigation spending plan, 
and numerous requests for information that, frankly, seemed to 
go into a black hole somewhere around 500 ``C'' Street, 
Southwest.
    Mr. Director, I recognize that the Congress is very capable 
of asking for reports and issuing directives within time limits 
which are impossible to achieve, it seems. If we've done that, 
I would hope our relationship is good enough that you will be 
frank and tell me so. And we've done a little of that.
    Likewise, if circumstances of your normal responsibilities 
make it impossible to meet these various reporting 
requirements, you should not hesitate to write and ask for an 
extension of time. Our intent is not to burden you or your 
staff with paperwork. Rather, we clearly have an obligation to 
spend the people's money in as wise a manner as possible, and 
oversight in this matter is a necessary component of that 
responsibility.
    Director Witt, I will, of course, allow you time to 
respond, if you so desire. But what I'm mostly looking for, 
however, is your commitment to attempt to be as responsive to 
us as you have been to our mutual clients.
    Mr. Witt. Mr. Chairman, I have no excuse and take full 
responsibility for those reports. I can assure you that, when 
we leave the hearing today, the reports will be addressed.
    Mr. Lewis. I do appreciate that. I hear you loud and clear. 
Somebody said ``the buck stops here''. But in the meantime, I 
know that your personnel have to be very proud of the shift in 
image across the country that FEMA enjoys, as well as the work 
they're about. I certainly hope there are those who understand 
that even requests from Congress not responded to can undermine 
a lot of that foundation that is important to all of us.

                          disaster obligations

    Moving on now to what this hearing should be about, I have 
numerous questions regarding the disaster relief program. It 
is, of course, well known that the number and cost of declared 
disasters has continued to rise over the last several years. 
Congress has obviously done everything possible to accommodate 
the need for necessary disaster dollars, and I should mention 
that in my first two years as chairman of this subcommittee, we 
have appropriated nearly $7.5 billion in disaster relief, no 
small part of that going to my own State, I might mention.
    As a result of these large appropriations, coupled with the 
lengthy period of time that it generally takes to obligate 
funds, FEMA has carried huge, unobligated balances from one 
fiscal year to the next. At the beginning of 1996, for example, 
you showed an unobligated balance of $4.2 billion, and for 
1997, that number was $3.1 billion. For 1998, you project that 
number to be just slightly over $100 million, meaning that you 
plan to obligate almost $4.4 billion during fiscal year 1997.
    While I have some considerable doubts whether certain 
requirements, such as projects associated with the Northridge 
earthquake, will be ready for obligation this year, I have very 
serious doubts as to whether FEMA has the fiscal capability to 
obligate that much money in one fiscal year.
    Has FEMA ever obligated that much in one year?
    Mr. Witt. This year, funding for Northridge and other 
disasters that we've been dealing with, is going to be 
obligated and committed this year. A lot of the architectural 
and engineering studies that have been going on in some of 
these projects are now just coming in for approval. There was 
over two hundred million dollars obligated just last month.
    Mr. Lewis. I must say, Mr. Director, what all this is 
about--and I say this for my colleagues as well--I am 
attempting to lay a foundation here because we will be 
discussing the content of your budget to some extent.
    I would note for the record that one cannot help but be 
somewhat dismayed that in almost every category of your basic 
budget, where you do the work, where the people are, where the 
equipment is, et cetera, that there are reductions or there's 
mighty ``slim pickins''. I am really, really wondering if, due 
to pressures that involve symbolism about tightening your belt, 
with an agency that deals with crises, if we aren't cutting off 
our nose--you know, to talk to the media, instead of dealing 
with problems that you try to deal with every day. I am 
attempting to move in that direction.
    Does obligating this much money exceed the ability of your 
agency, or does it impose an extraordinary workload burden?
    Mr. Witt. I don't think so. I think we can do this with the 
financial management system that Gary has put in place, and 
with the streamlining and changes we've made. We will have to, 
to be able to get the projects rebuilt. It will have to be 
obligated this year.
    Mr. Lewis. Well, in obligating this much over the course of 
the fiscal year, do you maintain auditors or other overseers to 
make sure problems do not arise?
    Mr. Witt. Absolutely.
    Mr. Lewis. Gary, identify yourself.
    Mr. Johnson. Gary Johnson, Chief Financial Officer.
    Yes, very much so, Mr. Chairman. We have had our new 
financial management system looked at very, very carefully as 
we're moving forward with full implementation. In fact, this 
year components of the agency will be audited as part of our 
progress towards complying with the Government Management and 
Reform Act that requires financial statements for the entire 
agency. So we are working very closely with auditors and 
they're here for the first time working with us now, that are 
under contract with the Inspector General.

                          budget supplemental

    Mr. Lewis. Thank you.
    For fiscal year 1998, you have requested just over $2.7 
billion for disaster relief. This figure includes a normal 
appropriation of $320 million--you addressed that partly in 
your opening remarks--a supplemental, of sorts, totalling some 
$2.38 billion, and an amount totalling $50 million for pre-
disaster mitigation efforts.
    It is my understanding that a supplemental will be coming 
to the Hill shortly that relates to Bosnia, and may involve as 
much as $2.5 billion. Do you anticipate that there is a 
reasonable possibility that there will be some supplemental 
relating to this subject area attached to that?
    Mr. Witt. We're trying to put the numbers together now and 
work with OMB. We're just addressing it now.
    Mr. Lewis. I understand that supplemental will likely be 
coming to us some time in April--at least that's what the 
leaders are telling us currently they are pushing for. Targets 
always change around here. Nonetheless, I would hope that you 
would attempt to be ready, and we can talk about that well 
before we get to that point.

                     1998 disaster relief estimates

    Within the narrative of the budget justification, you go to 
great lengths to point out the growing cost of the disaster 
program. Yet your request shows a reduction in virtually every 
single object class activity. Personnel compensation shows a 65 
percent reduction; travel and transportation of persons shows 
an 82 percent reduction; communications shows a 68 percent 
reduction. The list goes on and on.
    The overall request appears to be nothing more than the 
five-year average of disaster expenditures, not including the 
cost of Northridge, thus leaving me with the distinct 
impression that various object class numbers are developed to 
fit a prefixed total and don't necessarily fit your actual 
experience over the past few years.
    How do you react to that?
    Mr. Witt. Of course, FEMA is much smaller than it was in 
1993. Our budget is smaller and our staff is smaller. I can't 
tell you how proud I am of the employees, of their dedication, 
and how hard they work. They have done a great job.
    We have put in place streamlining efforts, with the 
financial management system, and the new technology we're using 
in the field. Instead of having to open disaster field offices, 
where people stand in line to wait to fill out paper forms, we 
are using computer technology with the inspectors. By 
establishing central processing centers, we have actually gone 
from $60 per application to $14 per application in 
administrative costs. So by reorganizing and streamlining, I 
think we have made a difference in administrative costs. That's 
the goal, to try to streamline, to try to cut the cost of our 
programs, to try to help support the effort in balancing the 
budget, and still do our job and do it well.
    Mr. Lewis. Mr. Director, I appreciate very much that point, 
and we'll call on Mr. Johnson in a moment to add to that. But I 
do have additional questions on this subject area that I will 
ask you to respond to for the record.
    The bottom line is this. As we're going about a commitment 
to balance the budget by 2002, the administration has signed 
on, Mr. Stokes and I have kind of signed on--at least the two 
parties have, the two houses have. I think we're serious about 
reexamining all of our programs. Maybe even reducing funding, 
or even eliminating programs that aren't working well or don't 
work at all, is one thing, and reducing the rate of growth is 
another.
    But where there are critical programs that have a 
demonstrated ability to do the job well, with the increasing 
responsibilities, those are not the programs that I look to 
undermine or perhaps kid ourselves relative to what the 
balanced budget process is all about. I would much prefer to 
call upon those who haven't done their jobs to get serious, 
rather than starve those that are working effectively.
    So, with that, Mr. Stokes, I appreciate your patience for 
the time that I took. I would be happy to yield to you.

                            recent disasters

    Mr. Stokes. Thank you very much, Mr. Chairman.
    Mr. Witt, in your opening statement this morning, where you 
referenced predisaster mitigation and that type of approach, I 
was quite impressed because, obviously, we must display much 
more vision with respect to what you refer to in your statement 
as being incredible events which we can never forecast. Of 
course, over the past four years, a little over four years, 
that you've been in office, our Nation has been confronted with 
some very serious disasters. We think of the tornados, 
earthquakes, flooding, bombings, and perhaps other things in 
between.
    One of the hallmarks of this administration, I think, is 
the manner in which you have had such a rapid response to 
wherever disasters have occurred. You were there, and 
oftentimes taking with you heads of other agencies who had some 
corresponding responsibility relative to that particular 
disaster. You described for us this morning the fatalities that 
have occurred in Arkansas, Kentucky and Ohio.
    I think it would be helpful to the committee if you would 
take a moment and perhaps give us a brief understanding of 
what, in addition to the fatalities, you actually saw as you 
and the President in one case, and you and the Vice President 
in another, actually viewed these sites. Can you do that for 
us?
    Mr. Witt. Yes, sir.
    The first disaster that we responded to recently was in 
Arkansas. As I said, the tornado went from Arkadelphia to 
Greene County, a distance of 250 miles, and anywhere from a 
half a mile to a mile wide in some areas. In the city of 
Arkadelphia, where it hit first, it hit the downtown and 
residential area, and it absolutely devastated that city. It's 
going to take some time to clean up and also to rebuild a lot 
of areas.
    It has been our experience that a lot of the areas that are 
hit by natural disasters are low-income areas. I don't have the 
answer as to why. A lot of these people in Arkadelphia lived in 
mobile homes. There were 60 mobile homes in this one park. 
Every single one was twisted around each other. There were 
seven fatalities in that city, even though they had adequate 
warning to be able to try to get to safety.
    In Ohio and Kentucky, and even in Tennessee and Indiana, we 
had flooding. Also a tornado hit Tennessee, where it destroyed 
about 600 homes.
    What is difficult is the fact that there was a massive 
amount of debris. When you have a flood, you have a massive 
amount of debris simply because that flood water destroys 
everything: the carpet, the floors, the walls, the sheet rock. 
All that has to come out. At the same time, you have all those 
household chemicals that have to be disposed of separately.
    One lady I talked to in Saline County, Arkansas, had lost 
six members of her family a month ago. Her husband took her 
away for the weekend to help try to relieve some of her stress. 
When they came back, everything they had worked all their life 
for was gone.
    On top of that, she stepped on a nail before we got there. 
It went through her foot. We were trying to help her get a 
tetanus shot.
    Another lady had a restaurant. She had worked hard all of 
her life to get the money to put into a restaurant. She was in 
that restaurant by herself when that tornado hit. It just 
absolutely destroyed that whole business. She was underneath 
all the rubble. When the fire and rescue people pulled her out, 
she only had bruises. She can rebuild, but it takes a lot of 
effort to do that. It takes a lot of cooperation from the 
Federal, State and local governments working together to make 
that happen.
    Any time you have tornados and floods--and I have seen a 
lot--it still breaks my heart to see families disrupted, who 
lose everything they worked all their life for. My point is, we 
can help stop some of that. With mitigation, we can make a 
difference. We can eliminate a lot of that.
    You know, in the Midwest, in Ohio, you can elevate a home. 
You can retrofit a house or business against an earthquake. You 
can do so much in mitigation that can make a difference for a 
community, and on top of that, it will save lives. That's the 
direction we need to go for the future. It's devastating.

                          value of mitigation

    Mr. Stokes. In terms of Ohio, what you saw there, had there 
been any type of attempt early on to build something that would 
guard against this type of thing?
    Mr. Witt. In Cincinnati, they had a flood wall that was 
built years ago. The flood wall worked in that part of the 
city. Beyond the city, of course, communities were flooded. It 
was the first time they had ever flooded. It was a record flood 
for them.
    This one gentleman built his house on the hill, the only 
hill in that community, and it still flooded. So because this 
disaster has hit many communities in Ohio and other States, we 
need to look at those communities. We need to see what we need 
to do so that it does not happen to that individual and that 
community again.
    We did that in the Midwest through the buyout relocation 
program in the 1993 floods. We worked with the State and local 
communities on a voluntary basis, and worked with all the 
Federal agencies to maximize the Federal dollar. We bought out 
over 10,000 pieces of property.
    What did that do? It created jobs. It was environmentally 
sound because it was good land use management--the land went 
back to the city and county for open land use management 
without anyone building back there again. In 1995, Illinois and 
Missouri had a flood again in some of the same communities, but 
no one lived there and no one got flooded. That's the 
difference we made.
    Do you remember the little town of Pattonsburg in Missouri, 
you remember Congressman?
    Mr. Stokes. Yes.
    Mr. Witt. It had flooded 31 times in its history. The mayor 
took me in his city hall, and he said, ``I want to show you 
something.'' He had elevation marks on the walls inside the 
city hall showing the years and dates that it had flooded. He 
had shelves built above the last flood mark where he could 
stack everything.
    Governor Carnahan and all of us joined together in a united 
effort, and using the money that you appropriated for us, we 
were able to relocate 18 businesses and 142 residents that will 
never be flooded again. There will never be taxpayers' dollars 
used for disaster costs related to flooding for that town 
again.
    In California--and you may have heard this story. I've told 
it many times--there was one gentleman on a street in Hollywood 
where every home had major damage or was destroyed from an 
earthquake. This one gentleman in this little house was sitting 
there. We walked in to his front yard, and I said, ``Why didn't 
you have any damage?'' He said, ``I went down and checked out a 
video tape at the library on how to retrofit your house against 
an earthquake.'' It was a FEMA Office of Emergency Services 
video tape produced in partnership with the State.
    He said, ``I spent a thousand dollars and did the work 
myself.'' He never had a brick loosened, he never had a single 
pane of glass broken. That's what we need to do. That's the 
difference we can make for Ohio in this flood, as well as in 
Kentucky and Indiana.
    Mr. Lewis. Mr. Director--would you yield for just a moment?
    Mr. Stokes. Certainly.
    Mr. Lewis. Mr. Director, I have heard that story before, 
and I want you to know that during the last year my wife and I 
have been involved in remodeling in beautiful downtown 
California. We live near, not very far from the San Andreas 
fault. We got that tape. You know, I'm going to come back to 
you if any of those bricks fall down. [Laughter.]

                            drf efficiencies

    Mr. Witt. We have streamlined. We do things differently. 
The things we have done differently have saved money.
    You know, when we started out at FEMA, we set up a 
processing center every time there was a disaster. Every time 
there was a disaster, we bought new equipment for that disaster 
field office.
    So we have changed all that now. We have two central 
processing centers for the United States and have cut millions 
of dollars in administrative costs a year.
    We had between 60 and 80 warehouses and storage facilities 
across the United States. No one knew what the inventory was, 
so we just bought new equipment every time we had a disaster. 
Now we have an equipment inventory, we have a warehouse on the 
West Coast, one in the central United States, and one on the 
East Coast. All the equipment is inventoried.
    All of the cellular phones, computers and everything come 
back in after a disaster, are refurbished, and then are 
packaged and used again.
    I think in '96 we saved $12.6 million, wasn't it, Bruce?
    Mr. Campbell. Yes, $12.6 million in cost avoidance by 
reusing the equipment.
    Mr. Witt. This is what we've done to streamline.
    Saving disaster dollars, saving people's lives, and making 
communities disaster resistant are things that we can do.
    Mr. Lewis. Excuse me, but would you identify yourself for 
the record?
    Mr. Campbell. Yes, sir. I am Bruce Campbell, Executive 
Associate Director for Operations Support.
    Mr. Witt. In that flood in California that you had--not 
this last one but the one before--there were 38 counties 
flooded. There was no way that we had enough personnel, State 
or FEMA, to open disaster application centers. We just couldn't 
do it. After working with the State we said okay, we're going 
to use a 1-800 teleregistration number and establish a service 
center to give customer service to those people who need 
information.
    Do you know what? In that one disaster, in that one single 
flood disaster, we saved $4.6 million by doing it this way.
    We did a survey after we used the 1-800 number without 
opening application centers, to see how people felt, to see if 
they got good service. Eighty-five percent approved the way we 
did this.
    So these changes, Mr. Chairman, are what have helped us to 
streamline and make it easier and save money, but we still have 
to go back and do more to save our communities.
    Mr. Stokes. Thank you, Mr. Chairman.
    Mr. Lewis. Thank you very much, Mr. Stokes.
    We normally call on members in the order that they arrive 
and go back and forth. Mr. Walsh was here mighty early, but the 
gentleman who helps us in the leadership has several 
conflicting meetings and Mr. Walsh will yield to Mr. Hobson.

               BORROWING AUTHORITY FOR THE FLOOD PROGRAM

    Mr. Hobson. Thank you, Mr. Chairman. Thank you, Mr. Walsh. 
I appreciate it.
    Director Witt, it's nice to see you. First I want to say 
that I think you're doing a good job. I have had personal 
experience with your agency before the current flooding 
situation, and I think you have brought a fresh image to this 
agency. I want to congratulate you.
    I have a couple of comments and three or four questions.
    I grew up in Cincinnati, so I know a little bit about the 
river. I want to tell you one story, that some years ago, when 
I was a young lawyer, I got a job there. In those days, before 
they built Riverfront Stadium, they had parking meters so far 
down on the river landing. Well, not having any money, I 
thought I would park below those meters. I didn't know why they 
only went so far. I parked out there, and I did that for a 
number of months.
    One day I came back and I had two wheels in the water, 
because that's how fast that water comes up. Even then the 
water came up. I thought, now I know why nobody was parking 
down there. Fortunately, it didn't get all four wheels and I 
got out of there. But that river can come up fast.
    Mr. Witt. It came up 21 feet in less than 12 hours.
    Mr. Hobson. It's devastating.
    I once was in a church in Williamson, WV, and they had 
those marks on the wall. I asked them what they were, and they 
said the waters rise every so often so we just mark the wall 
and leave it there.
    This is a tough time and I appreciate your going out to 
Ohio and the other states, the administration and you, and 
declaring those counties disaster areas. I represent part of 
Ross County, one of the disaster counties, so I really 
appreciate that.
    Really, you help little towns, too. Some think that FEMA 
just goes into big towns, but you do a lot in little towns to 
help the people.
    But with the extreme flooding conditions that we're facing, 
I'm interested in knowing whether FEMA has enough borrowing 
authority for the national flood insurance program.
    Mr. Witt. Let me address it just a little bit, and then I 
would like to get Spence Perry, who is our Acting Executive 
Administrator for the Flood Insurance Program, to answer more 
specifically.
    When we started changing what we were doing in FEMA, 
particularly in the flood program, I had a serious concern 
about this. In 1974, we only had $8 billion in policies. By 
1993, we had $254 billion in policies, but still had 
communities that had never joined the flood program. I saw 
across our country floods where people didn't even realize that 
their homeowner's insurance did not cover flood damage.
    That was a serious problem, because when they had a flood, 
they would call their insurance agent, and he would say, 
``Sorry, you're not covered.'' So we did a marketing campaign, 
Mr. Chairman. You remember we spent that money, and Elaine 
McReynolds the Federal Insurance Administrator, was telling you 
about it at last year's hearing. Now we have $370 billion in 
coverage based on that marketing campaign.
    So to answer the question about do we have enough borrowing 
authority based on the amount of coverage we had in 1974 or 
even 1993 versus the amount of coverage that we are responsible 
for now, no, we don't. We do not.
    Spence, do you want to respond?
    Mr. Lewis. Mr. Perry, please identify yourself.
    Mr. Perry. I am Spence Perry, the Executive Administrator 
of the Federal Insurance Administration.
    The short and comfortable answer to your question, sir, is 
that for the claims we're experiencing right now in the 
Midwest, there will be ample funding to pay the claims. In 
fact, we're anticipating about 3-5,000 claims in the current 
flooding. Very early and preliminary estimates of losses amount 
to $45-50 million, which is consistent with average losses and 
would not involve borrowing. So the present flooding event is 
sufficiently covered.

           need for additional urban search and rescue teams

    Mr. Hobson. The other issue I wanted to talk about--and I 
really appreciate what your staff has done to keep me informed, 
is FEMA's urban search and rescue team program and the 
selection process. As a matter of fact, we're taking a look at 
the one in Ohio's Miami Valley and Wright-Patterson Air Force 
Base.
    I appreciate your efforts to keep the selection process 
fair and above board, and whatever happens, happens. I think 
that's the real issue. If you lose, you know it's fair and 
nobody has a problem.
    But I would like for you to comment on the need for 
additional USAR teams, especially the needs in the central part 
of the United States.
    Mr. Witt. I think it really came to light with the Oklahoma 
City bombing. We had to bring teams in from New York, 
California, and all across the country. They were very good 
teams, and they did a fantastic job.
    But I think everyone realizes that we would be very limited 
by the number of teams that we would have to respond to a New 
Madrid earthquake or another incident that we may be facing 
besides that. So, geographically, it is just not readily 
accessible by all of our teams; so that was the reason we were 
primarily looking at the midwest.

                    emergency equipment replacement

    Mr. Hobson. At some time I would like to know about your 
timing on that decision.
    I have just two other short questions. Since much of FEMA's 
emergency equipment is obsolete and in need of repair, I join 
the chairman in requesting a list of FEMA's needs in the area 
of emergency response equipment, and I hope you will give him a 
date on when you're going to follow up on that because I think 
it's important.
    We're trying to help you, because I think and everybody 
else thinks you're doing a good job. We want to help the people 
who are doing a good job, and we're going to help you fight for 
what you need.

                        state and local programs

    Lastly, as you know, I have enjoyed a close working 
relationship with Dale Shipley, with the Ohio Emergency 
Management Agency, who I think has done a good job in Ohio, and 
I know he is respected by you and you're respected by those 
people out there in the States. I think it is really important 
that there is this mutual respect.
    But he and several other emergency managers have expressed 
their concern about the funding level in the State and local 
assistance accounts. Knowing of your background as a State 
director, and what your State is going through now, how do you 
think the States are doing in carrying out their emergency 
management responsibilities, and specifically could you comment 
on the proposed SLA funding levels?
    Mr. Witt. In `94 and `95, you all were gracious enough to 
give us an additional $4 million in each year to address the 
Emergency Management Assistance requirements in each State. I 
think the States have really come along in the last four years 
and are doing a better job and getting better prepared to do 
their job.
    What we're trying to do in working with the States now, as 
we are required to do under the GPRA, is show accountability, 
to show where we're going with priorities and goals, and to 
justify our programs.
    We are working with the States to do self-assessments based 
on program guidance from FEMA, and tying them in with the GPRA 
requirements, to actually establish a baseline from which they 
can assess where they're going and where they need to go. 
They're doing a great job.
     I saw Dale Shipley yesterday, Congressman. He looked a 
little weary, but other than that, he was fine. Our regional 
director, Michelle Burkett, and the State are working to help 
support those communities.
    Mr. Hobson. Well, we appreciate what you're doing. It's a 
tough time for you now in Ohio, but from past experience, 
you've done a good job and I'm sure you will in the future.
    I thank you, Mr. Chairman, and my friend from New York, for 
allowing me this time. I have four hearings going at the same 
time.
    Mr. Lewis. Thank you, Mr. Hobson. We appreciate that.
    Mr. Director, we have a couple of new members to our 
committee down at the end of the table, but at this point--
    Mr. Hobson. But experienced members, actually.

                        hazard mitigation grants

    Mr. Lewis. That's right.
    At this time it's my privilege to recognize the gentlelady 
from Florida, Miss Carrie Meek. She is a delight to serve with 
on the committee. She, along with the Chairman, have 
experienced disasters in their individual States, but at least 
we're not in the mix of this at home at the moment. 
Nonetheless, I am sure she's pleased to be here with the 
Director, who is doing such a tremendous job.
    Miss Meek.
    Ms. Meek. Thank you, Mr. Chairman. I am very pleased to be 
here.
    Coming from a State that I think is the most frequently 
hurt by hurricanes, and knowing how hard you and FEMA have 
worked to assist us, I really want to say that we appreciate it 
so very much. And how you have also tried to end some of the 
many disasters we have.
    You understand that any disaster has far-flung 
ramifications after it's over. We still have a few of those 
left. In your working with us, hopefully these things can be 
handled in the quickest manner possible. So I want to thank you 
for that.
    Our State is very concerned about the way we have funded 
the hazard mitigation programs. My friend and colleague, Mr. 
Hobson, has just alluded to his efforts in that regard. But the 
reading I get on that, having been Chairlady of the State's 
community agency for a while, I am concerned about the time it 
takes to turn around the grants to the States. It takes an 
enormous amount of time, many times up to 42 months, to do 
that.
    I am sure you must have some sympathy in understanding that 
these States, who so drastically need to do this, so 
drastically need to get their plans together, their strategies 
together, and try to enlist the help of all the agencies, and 
I'm concerned as to whether or not you can slow or cut down on 
that length of time that it takes to expedite that.
    If you can, what plans have you made so far to do that?
    Mr. Witt. That's a very good question, and thank you.
    Joe Meyers, your State director from Florida, is on our 
hazard mitigation committee for the National Emergency 
Management Association. Joe has done an exceptionally good job 
for you in Florida.
    Streamlining the hazard mitigation grant program was a 
number one priority for me, because I dealt with the mitigation 
program when I was the State director in Arkansas. It took me 
two-and-a-half years to get a project approved. So we have now 
pushed the approval of the hazard mitigation grant proposals 
down to the regions; so they do not have to come to Washington 
and get tied up in time here.
    We are pushing down to the regions the environmental 
assessments. They work closely with the States from out of the 
regional office so that the project doesn't have to come up 
here to get the environmental assessment done or our review.
    We are working with the States, as they are developing 
their 409 State-wide mitigation plans that will help them to 
prioritize their mitigation projects before and after a 
disaster, which is going to make a big difference.
    Also, last year you all were kind enough to support the $3 
million increase for a State mitigation officer in each State. 
This will make a big difference by having someone working full 
time on this. So I think what we're doing with the States now, 
with the mitigation task force we have set up, and by 
streamlining the process, that we will be able to make a 
difference.
    As we rebuild after a disaster--a bridge, a city hall, or 
courthouse--mitigation needs to be part of that rebuilding 
effort, not two years later. So we are working on that.

                        pre-disaster mitigation

    Ms. Meek. Right now is that in your overall budget?
    Mr. Witt. You mean predisaster mitigation?
    Ms. Meek. Yes.
    Mr. Witt. Yes.
    Ms. Meek. Shouldn't that be outside of your purview in 
terms of--not outside of your purview, but in order to expedite 
things and to cause things to work better for the States, could 
that be an additional amount of money that I ask my chairman 
for? [Laughter.]
    I think it would help.
    Mr. Witt. I agree with you. [Laughter.]
    This is a new program. The $50 million is a pre-disaster 
program that we're trying to put in place to do the mitigation 
projects before we have another hurricane, before we have 
another flood, or before we have another earthquake. So that's 
what----
    Mr. Lewis. If the gentlelady would yield, let me mention 
that the Director and I have discussed this subject on a number 
of occasions. While we did put in extra money last year, this 
is relatively a small amount.
    But just to illustrate your point, the Director came to 
California and spent considerable time with us relative to the 
Northridge earthquake and the impact it had upon very critical 
hospitals in Southern California that should be available in 
the event of an emergency. There were major facilities at UCLA, 
USC, at St. John's, at Cedars of Sinai.
    The damage due to the earthquake was very severe. Often 
hospitals serve on an ongoing basis the poorest of the poor in 
our community, but in an emergency, you need them. That's when 
the Director first began talking to me in serious ways about 
this mitigation question.
    He's on top of the disaster problems and the potential, et 
cetera. There's no question that he's in the best position to 
lead us in terms of mitigation. That extra funding is absolute 
consideration and we want to work with you.
    Mr. Witt. What is really good is the fact that when we have 
a disaster, whether it's a hurricane, flood, earthquake or 
fire, or a man-made disaster, those critical facilities--
hospitals, schools, fire stations, police stations, EMS 
stations--need to be functioning. They need to be a priority. 
If we have another earthquake out there in California and those 
hospitals are not functioning, many lives are going to be lost. 
A lot of people aren't going to be treated. The same way with a 
hurricane.
    Most of the time, schools are used for shelters. We need to 
make sure that we will be able to use the schools for shelters, 
and also that firemen can respond. You know, many times in a 
disaster we have seen where fire stations have been reduced to 
rubble, with the trucks underneath the rubble. So those are 
some very sensitive areas that we need to prioritize.
    Ms. Meek. If I may have one more minute, Mr. Chairman----
    Mr. Lewis. Go right ahead.
    Ms. Meek. Is CEQ involved in the process involving the 
mitigation studies? That's the Council on Environmental 
Quality.
    Mr. Krimm. They're not, no.
    Ms. Meek. Thank you.
    Mr. Lewis. Your name?
    Mr. Krimm. My name is Richard Krimm.
    Mr. Lewis. I just want to say that Miss Meek comes with 
considerable reputation to our subcommittee. She knows exactly 
when to ask for money, and she only asks for things that are 
desperately needed.
    Ms. Meek. And very important. [Laughter.]
    Mr. Lewis. That's right.
    It is now my pleasure to call upon a colleague from New 
York, who has been a great member of this committee, Jim Walsh.

         State and Local Assistance vs. Pre-disaster Mitigation

    Mr. Walsh. Thank you, Mr. Chairman.
    Welcome. Again, let me reiterate what all of my colleagues 
have said. It's unanimous, that you're doing a terrific job and 
we thank you for that. It's very difficult work and we thank 
all the people who work for FEMA, for the good work that they 
do.
    I look around the table and we have certainly seen the work 
you have done in California recently, down in Miami with the 
hurricane, and my two colleagues from Ohio currently. In my 
first field hearing that I took when I came to Congress was on 
the Agriculture Committee, and I went down to Bill Hefner's 
district in North Carolina for an agriculture disaster. So, you 
know, knock on wood for New York.
    We have had our problems, and I suspect that all of you 
folks will be there if we have trouble, and I think that's the 
way this works. We have to help each other out along the way.
    If I could go back to what Congressman Hobson was saying 
about these SLA funds, I received a letter from our New York 
State coordinator, Ed Jacoby, and he asked about Congressman 
Hobson's request for additional funds.
    How does that SLA fund jibe with the $50 million request 
for predisaster mitigation funds?
    Mr. Witt. The predisaster mitigation funds will be used to 
help the communities in high-risk areas, as far as minimizing 
the risk in that community. The $3 million that was 
appropriated by Congress last year funds a State hazard 
mitigation officer at a hundred percent funding for the first 
year. That position or that person will be working for the 
State to help identify the high-risk community, so that we can 
spend the $50 million in minimizing the risk in that community. 
All of that $50 million will go down to those high risk 
communities for mitigation projects.

                           surplus equipment

    Mr. Walsh. There was a question also that the chairman 
asked to get an idea of your status with equipment, obsolete 
equipment or used equipment that needs to be replaced.
    We had a mud slide in my district about five or six years 
ago that wreaked havoc in one small little area. Of course, it 
didn't qualify as a national disaster and it fell into a crack 
between a State disaster and a national and local disaster. The 
local community just didn't have the resources to deal with it.
    In terms of some of this equipment, what would be your 
policy if, for example, you were going to replace cell phones 
or replace whatever equipment you might have, boats, for 
example, that could be used, what would be your policy in terms 
of making that equipment available to local communities, county 
disaster relief agencies and so on?
    Mr. Witt. What we try to do is, if a State needs the 
support of our mobile emergency response communications 
equipment, then we move all that equipment in to help support 
that State, whether it's cellular phones or computers--whatever 
technology we have.
    One of the things that has happened over the years is that 
we just don't have funding anymore for equipment used in State 
emergency operations centers, like generators or EIS systems, 
that a State needs.
    To give you an example, it would probably take $40 million 
a year to start bringing the States' equipment needs up to 
standard.
    Mr. Walsh. Forty million a year?
    Mr. Witt. At least that much. We had a request from the 
States for $34 million one year for equipment, and there will 
always be a need to replace that equipment.
    One of the things that would help the States a great deal 
would be to give them, particularly for fire and emergency 
management, access to Federal surplus property. What they have 
now is access to excess property, that is passed down to the 
State to a warehouse, where you go in and have to buy three 
pieces to make one. It would really help the States a great 
deal, if they could get generators, trucks, tankers, and other 
surplus property. But they can't get past that first stage to 
get to the good property. They get surplus, but no excess.
    We're looking now to see what we can recommend to do.
    Mr. Walsh. It would be a real help, because there are a lot 
of disasters that cause just as much difficulty for small 
numbers of people that you can't get resources for.
    Mr. Witt. Exactly.
    Mr. Walsh. But they sure are disruptive to people's lives.

                      flood insurance requirement

    My last question. For example, with the flooding that's 
being experienced now, it is my understanding that an 
individual who was harmed, family property, would then have to, 
if they had not already, would have to purchase Federal flood 
insurance. Is that correct?
    Mr. Witt. The 1994 Flood Reform Act that was passed and 
signed by the President limits individuals assistance to one 
time. If they have been flooded, there's a Federal disaster 
declaration, and they do not have flood insurance. They are 
then required to have flood insurance in the future, in order 
to receive Federal assistance.
    We have implemented this program. If an individual gets 
flooded a second time and does not have flood insurance, then 
we can provide them only temporary housing and other limited 
assistance. Assistance under the individual family grant 
program would not be accessible to them.
    Mr. Walsh. Does that work the same for hurricane victims 
and earthquake victims?
    Mr. Witt. The bill only addressed flood because 80 percent 
of our disasters are flood disasters.
    Mr. Walsh. Eighty percent?
    Mr. Witt. Yes.
    Mr. Walsh. Is there any application of that principle for 
earthquake and hurricane victims?
    Mr. Witt. I don't know. That wasn't in the earthquake 
legislation, was it?
    Mr. Krimm. No, it was not.
    Mr. Walsh. Would it make sense?
    Mr. Witt. I think so. The problem we have in a lot of these 
areas is that if earthquake insurance is available, it is not 
affordable. As far as earthquake insurance is concerned 
particularly in California and even in Arkansas with the New 
Madrid, sometimes insurance is available, but the deductible is 
so high that it's not worth purchasing.
    In California for example, I think in a lot of the areas 
there, the deductible is $30,000. We have been working a lot 
with the insurance industry to bring them in as a partner, in 
trying to minimize the risk to not only individuals and 
communities, but also to the insurance industry as well. We 
have come a long way with them.
    I think, by working with the insurance industry in disaster 
prone communities, and by doing mitigation before an event, it 
will cut that risk, and it will allow insurers to offer more 
insurance at affordable rates.
    Mr. Walsh. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Lewis. Thank you, Mr. Walsh.
    First, Mr. Director, let me take a moment to introduce 
another new member to our subcommittee, a colleague who is 
returning to the House, and I am very pleased to have him join 
our subcommittee, David Price.
    David, we have a vote on the floor in a few moments. Well, 
it is on right now, and it will be followed by one suspension 
vote, as I understand it. I would suggest that we wait until we 
go vote and come back and you could proceed with your 
questioning there, if that is all right.
    Mr. Price. Fine.

                   california hospital medical center

    Mr. Lewis. In meantime, let me just make a couple points, 
if I could, Mr. Director.
    I have been working very, very closely with the new 
chairman of the California Democratic Delegation, among the 
House of Representatives, Lucille Roybal-Allard. Ms. Roybal-
Allard has called me regarding the California Hospital Medical 
Center, CHMC, which was impacted by that earthquake 
circumstance, and there has been an application in process. 
There has been some lack of communication, she suggests. I 
would appreciate it, if you would look into that.
    Mr. Witt. I would be happy to.
    Mr. Lewis. Most importantly, that hospital serves a very 
significant pocket of very poor people in the Los Angeles 
region, and if we can be responsive, I would appreciate it.
    Mr. Witt. Okay.

                           Disaster Insurance

    Mr. Lewis. Further, I wanted to mention that, following up 
on Mr. Walsh's line of questioning, as you know, our late 
colleague, Bill Emerson, was very much a leader in attempting 
to work with those insurance companies as well, and his 
legislation would have made an attempt to pool disasters of 
various form, flood and earthquake and tornado and the like, in 
order to truly attempt to have an insurance foundation that 
does reflect that family of America and make these both 
premiums and, in some instances, deductibility, in other 
instances, just availability of coverage feasible.
    I will be wanting this afternoon to spend some time 
regarding what you think the prospects are for that legislation 
and how this committee might be able to help.
    So, in the meantime, to accommodate everybody's time and 
especially Mr. Price's time, we will go to the floor and vote 
and then come right back after the suspension begins. So we 
will recess.
    [Recess.]
    Mr. Lewis. Let me call our meeting back to order.
    I apologize to our guests. We had a series of votes. This 
latest vote was unexpected by very many, but indeed, Mr. Price 
has gone up to make a quick vote and he will be right back 
down. We have delayed his questions until we came back away 
from recess, but between now and then, Mr. Stokes, do you have 
any other comments you would like to make?
    Mr. Stokes. I have a few additional questions. I don't know 
whether we can take them up at this time.
    Mr. Lewis. Why don't we proceed with whatever, and when Mr. 
Price comes, we will kind of shift gears and let him get in his 
first round.
    Mr. Stokes. Fine. Do you want me to proceed?
    Mr. Lewis. I yield to you.
    Mr. Stokes. Thank you very much, Mr. Chairman.
    Mr. Lewis. Well, he is right here.
    Mr. Stokes. Here he is.
    Mr. Lewis. I have got to tell you, Lou Stokes is as 
flexible as anybody I know.
    Mr. Stokes was just going to ask a question while you were 
out, David, but frankly, I think he would prefer to have you 
have your first round. So we will recognize for the first time 
for questioning in our subcommittee, David Price, a colleague 
who has returned, and we welcome you to the subcommittee.

                FEMA's Role in North Carolina Disasters

    Mr. Price. Thank you, Mr. Chairman, and thank you, Mr. 
Director, for your testimony and for your good work year in and 
year out. We have had particular reason in North Carolina to 
appreciate your work this last year, as you well know.
    During the 12-month period from October 1995 to September 
1996, our State of North Carolina has suffered damage from, 
many presidentially declared, natural disasters.
    Hurricane Fran, which hit the coast just over 6 months ago, 
was the most destructive storm to ever hit North Carolina.
    You spent a lot of time in North Carolina in the aftermath 
of Fran, and I am very grateful for the role that you and FEMA 
have continued to play in North Carolina's recovery.
    I have a letter from North Carolina's director of Emergency 
Management, a letter which detailed FEMA's actions in North 
Carolina and praised the agency for its good work.
    Mr. Chairman, without objection, I would like to include 
that letter in our hearing record.
    Mr. Lewis. Without objection.
    [The information follows:]

[Pages 40 - 41--The official Committee record contains additional material here.]


                n.c. recovery task force recommendations

    Mr. Price. My questions, Director Witt, have to do with the 
aftermath of this storm and the continuing cleanup that is 
going on.
    I know you are familiar with North Carolina's Disaster 
Recovery Task Force, the recommendations that that task force 
has made. The group is chaired by Lieutenant Governor Dennis 
Wicker, and it includes cabinet heads and other leading 
citizens. The task force recommendations were issued on 
February 14th. You are familiar with that report.
    Well, as you know, one of the major reasons that report was 
drafted was to outline what needs to be done immediately to 
avert compounding the problems caused by Hurricane Fran, 
specifically such matters as lasting damage to houses and 
businesses, the clogging of creeks causing flooding, excessive 
dead wood causing forest fires, increased insect activity, 
endangering the public health.
    Now, I understand very well that the correction of many of 
these problems may not fall within your jurisdiction. I wonder, 
though, as you look at that report and consider your experience 
in the State, do the funding levels requested in that report--
the estimates as to what it would take to address these needs--
do those funding levels seem adequate? Do they seem like 
plausible figures?
    Mr. Witt. I think so. You know, they have done a very 
thorough job in that report, and a good job, I might add. I 
think that Derrick Cameron, among others, who worked on that 
tried to give an honest assessment of the funding levels.
    Mr. Price. Where should North Carolina be looking for 
resources to address these problems?
    Mr. Witt. One thing that North Carolina and Florida and 
several of the States that we have worked with and continue to 
work with are looking at is what we can all do together in a 
partnership for long-term recovery. Right now, we are all 
looking at what we need to put together to establish a long-
term recovery process that would help support reports such as 
North Carolina's.
    We do not have a long-term recovery program in place. We 
have established some long-term recovery task forces, like the 
one the President put in place after the 1993 Midwest flood 
that involved all of the Federal, State and local agencies, and 
that is important.
    Mr. Price. So that would be, by definition, an inter-agency 
task force?
    Mr. Witt. Yes, sir.
    Mr. Price. That would involve what range of other agencies?
    Mr. Witt. Well, it involved the Department of Agriculture. 
HUD, the Economic Development Administration in Commerce, FEMA, 
and the Corps of Engineers. It involved most of the agencies 
that had a role and a responsibility in not only the response 
to a disaster, but also the recovery from that disaster. We 
have 28 Federal agencies that participate in the Federal 
Response plan.
    Mr. Price. Well, in terms of your progress in putting this 
together and getting it working the way you want to do, what 
kind of immediate help does it offer as North Carolina surveys 
the possibility of additional support for our needs?
    Mr. Witt. Well, I think the immediate answer for North 
Carolina would be to continue to follow up with us and the 
other agencies to come to closure in some of those areas that 
they want to address and which we can help through mitigation, 
particularly like the spraying of the insects, and downed 
timber. Many, many times when you have a hurricane like that, 
or a tornado, an excessive amount of timber hits that ground 
and can't be removed for different reasons. As the dry season 
or summertime comes along, you then have a very high fire risk. 
You can use mitigation to reduce that risk.
    Mr. Price. Well, as you know, the funding needs that the 
task force has identified do cover a range of agencies.
    Mr. Witt. Right.

               hazard mitigation funds for north carolina

    Mr. Price. With respect to FEMA, particularly, though, 
there is some mention of possible further help under the Hazard 
Mitigation Grant Program. That is what you are referring to.
    Mr. Witt. Yes, sir.
    Mr. Price. What is the potential there?
    Mr. Witt. It is very good.
    In 1993, we changed the legislation authorizing hazard 
mitigation assistance from 10 percent of our public assistance 
program to 15 percent of the total cost of that disaster.
    I am not sure of the numbers. Dick, do you know the numbers 
yet?
    Mr. Krimm. It is approximately $100 million for North 
Carolina. One of the things that we are interested in doing is 
having some buyouts down there.
    Mr. Witt. Yes. So there will be about $100 million 
available to North Carolina for hazard mitigation work, which 
will help them.
    Mr. Price. Well, that is the figure identified in the task 
force report. So that is encouraging.
    I also appreciate very much your willingness to work with 
the State in identifying other sources of assistance. With a 
storm like this, the impacts last for years and years. We are 
reminded of that in North Carolina every day, and while the 
headlines may go away, the continuing need to follow up in 
these various areas continue. So our State is still in the 
recovery mode, and it is very important for us not to forget 
that, forget the continuing needs.
    Mr. Witt. It really is because, a lot of times what we see 
in disasters and what happens after the disaster in the 
recovery phase of that disaster, a State or local community 
will have a problem because they don't really know what 
programs are available to them. They don't really know what 
they can look forward to in helping to rebuild a community 
unless they have someone helping them to coordinate that 
effort. That makes a difference.
    Mr. Price. And you are the agency often in the best 
position to do that----
    Mr. Witt. And we are trying to make that happen.
    Mr. Price [continuing]. In working with the State very 
closely.
    Mr. Witt. Yes.
    Mr. Price. Mr. Chairman, just one follow-up question which 
has to do with that question of eligibility.
    Mr. Lewis. Go right ahead.

                 pre-disaster mitigation pilot projects

    Mr. Price. You did speak briefly in your testimony of the 
50 million additional dollars you are requesting for a pre-
disaster mitigation fund to help create the disaster-resistant 
communities, as you put it. Now, if this initiative were to be 
funded, am I correct in assuming that an area that has already 
been hit by a disaster would still be eligible for that 
program?
    Mr. Witt. If that is an area that is still considered a 
high-risk community, we may want to put them in as pilot 
project, sure. Yes.
    Any community could be designated a high risk, whether it 
be for hurricane, fire, earthquake, or flood. We will identify 
some communities that could be used as model projects, similar 
to what our flood program does.
    You know, in the flood program, we have about 18,000 
participating communities or a little more than that now, 
across the United States. By participating in the flood 
program, they are required to build to certain standards in 
that community. We want to do the same thing in a pre-disaster 
mitigation program by working with these States and model local 
communities to establish some standards that would help 
eliminate a risk. The community, working with us and private 
industry, would accept those standards as a means to mitigate 
that risk.
    Mr. Price. Well, I understand the funding you are 
requesting is limited.
    Mr. Witt. Yes.
    Mr. Price. You are talking about a pilot effort.
    Mr. Witt. It is very limited.
    Mr. Price. At the same time, I have no doubt that many 
parts of North Carolina would qualify for that high-risk 
designation.
    Mr. Witt. North Carolina has been devastated.
    Mr. Price. We have some good empirical evidence of that.
    Mr. Witt. Yes.
    Mr. Price. Thank you, sir.
    Mr. Lewis. Mr. Price, that is another reason we welcome you 
to the subcommittee.
    Mr. Stokes.
    Mr. Stokes. Mr. Chairman, I suppose you are contemplating 
recessing for the noon hour?
    Mr. Lewis. I am, shortly, but would you prefer to wait?
    Mr. Stokes. I have a few questions.
    Mr. Lewis. I think we will proceed a little. I do have kind 
of a crazy conflict here, but nonetheless, I think we will just 
squeeze that schedule a bit.

                          snow removal policy

    Mr. Stokes. Thank you, Mr. Chairman.
    Mr. Witt, last year, we discussed FEMA's assistance for 
snow removal request at some length. Your statement indicates 
the agency has issued proposed regulations, addressing eligible 
costs for snow emergencies. Can you just elaborate on the 
principal features of that proposed rule for us?
    Mr. Witt. Yes, sir. In the past, FEMA did not have a 
policy, basically, of how we would fund snow removal or snow 
emergency measures. So we did develop a policy and put it in 
place.
    In a snowstorm, similar to what we had in 1996, or a 
snowstorm similar to what we had in the Midwest where they had 
five blizzards this year and were literally using snow mobiles 
and following power lines as a way to find houses in order to 
help people, it is an extremely disastrous condition. So the 
policy is we will help fund the clearing of emergency routes, 
one lane each way, to help make sure that people can get to 
hospitals, and to make sure people will be able to function.
    Mr. Stokes. Let me repeat a question to you that I asked 
you last year, and I would like for you to indicate how the 
proposed rule addresses this concern.
    How do you respond to the observation that under the 
policy, it is the squeaky wheel that gets the grease and the 
fact that communities which actually take care of their own 
local situations are actually penalized under this policy?
    Mr. Witt. Well, I always try to be very fair, and honest 
about what we do, and whether we determine to make a 
declaration or not.
    A lot of States have done a better job in assuming the 
responsibility of taking care of their local communities than 
other States. I have to look at it from the sense that is it 
beyond their capability to make sure that the health and safety 
of people's lives are not jeopardized. That is the way I look 
at this, and I try to do it honestly, fairly, and consistently.
    I think we have been fair. We have turned down a lot of 
declaration requests, as well as approved a lot. I think I have 
been fair in those determinations. I have really tried to be.

                          workplace diversity

    Mr. Stokes. Let me go into another subject for a minute 
that you and I have had a great deal of discussion about since 
you have become Director of this Agency, and that is the whole 
question of diversity in terms of employees of this agency.
    Of course, it is an area where you have been sensitive and 
you have tried to make some changes in this particular agency, 
and I appreciate very much the commitment you have made in this 
respect.
    Can you just briefly bring us up to date in terms of where 
we are from last year when you reported to our committee?
    Mr. Witt. At this time, our percentage of minority staff at 
FEMA is about 22 percent. I think we have made great strides in 
changing the diversity of the agency, not only the political 
appointees, but the management and career-ladder positions 
within the agency as well. What has really hurt us in the 
agency is the fact that we have been under a hiring freeze for 
most of the year. It is very difficult under those 
circumstances to change the diversity of an agency, but we have 
made some tremendous strides since you and I talked about this 
4 years ago. It was a priority then, and still is a priority of 
mine to make diversity a part of the agency.
    Mr. Lewis. Would the gentleman yield?
    Mr. Stokes. I would be delighted to yield, Mr. Chairman.
    Mr. Lewis. Mr. Director, we have discussed this on the 
record and off the record.
    Mr. Witt. Yes.
    Mr. Lewis. The progress that you have made is impressive, 
the goal here, though, as my colleague and I have discussed in 
many fora, the objective is to have all of our agencies look 
very much like America.
    Mr. Witt. Absolutely.
    Mr. Lewis. That sort of progress is important, recognizing 
difficulties of freezes. Your agency is an exception in terms 
of the possibility of redesigning the definition of freeze, but 
in the meantime, we do appreciate your paying attention to it.
    Mr. Witt. We really have.
    Pauline Campbell is now the director of our Equal Rights 
office. She is doing a great job there, but she is absolutely 
going to have to have some help in that office. She is making 
proposals now to me on how we can change that so we can better 
address not only grievances, but also the diversity in our 
agency as well.

                          minority contracting

    Mr. Stokes. If I have time for additional questions, Mr. 
Chairman, I would just like to follow up with reference to 
minority contracting. Following the 8-percent statutory goals 
set forth in the law, can you give us some idea, some 
indication where we are in terms of that?
    Mr. Witt. Sure. Gary will, Congressman Stokes, in just a 
moment.
    I had the opportunity to meet with about 50 minority 
contractors here in Washington. Maxine Waters was gracious 
enough to invite me over to meet with them and to talk with 
them, and I found that a lot of our minority contractors across 
the country, have very little information of how to go about 
the process of bidding on projects. So we are trying to work 
with everyone through our grants management program in Gary's 
office to make sure they have that information.
    Mr. Stokes. To get the information out.
    Mr. Witt. Yes, sir.
    Gary.
    Mr. Johnson. Mr. Stokes, for fiscal 1996, FEMA exceeded its 
goal for both 8(A), and disadvantaged businesses. Awards to 
subcontracts for small businesses, disadvantaged, and woman-
owned businesses exceeded our dollar goal by over 100 percent. 
I would be pleased to submit our statistics for the record for 
fiscal year 1996.
    Mr. Stokes. That is good news, and I appreciate that.
    I appreciate, Mr. Chairman, our putting that into the 
record and making it a part of this record.
    Mr. Lewis. We will.
    [The information follows:]

[Page 47--The official Committee record contains additional material here.]


    Mr. Stokes. I thank you.
    Mr. Lewis. Thank you, Mr. Stokes.
    Mr. Stokes. You were so gracious on the time. Thank you.

               spending plan for pre-disaster mitigation

    Mr. Lewis. James, I have a couple of relatively 
administrative areas I want to touch on before we break, but we 
will be recessing for a lunch break and come back at 2 o'clock.
    Let me just touch briefly on the pre-disaster mitigation 
discussion that has gone on before. Unfortunately, there is 
precious little information in the justification as to what you 
plan to do with the $50 million that you and I had discussed, 
although we talked about that on the edges somewhat today.
    I would mention again in this regard that we are still 
waiting a response to our 1997 Conference Report and to our 
letter of the same-year operating plan dealing with FEMA's 
plans to spend available pre-disaster mitigation funds.
    First, when can we expect to see your long-term plan in 
connection with that? Second, please give us your thoughts as 
to how the request would be spent.
    Mr. Witt. I think you can see we are very close to having 
completed a plan on how we would go about identifying 
communities, and how we would develop the Federal, State, and 
local partnership in this effort, including the insurance 
industry.
    I think you will be very excited about the proposal. I just 
reviewed it myself and I am very excited about it. I will send 
you a letter confirming the date that we can have the report to 
you.
    What we want to do, as I said earlier, is set up the model 
programs to show what mitigation can do, how it will benefit 
our country as a whole, how it will benefit communities and how 
it is going to save money. Also by working with the insurance 
industry we want to explore the possibility of having lower 
premiums and lower deductible because we are eliminating the 
risk of a community and the risk to the insurance industry, as 
well as the mortgage lending institutions, as you mentioned 
earlier.
    So this is all going to have an impact on not just Federal, 
but State and local dollars, as well as those in private 
industry as well.
    Mr. Lewis. I might mention as an aside, as you were 
discussing the squeaky wheel with Mr. Stokes, at another time, 
I will be interested in our having a conversation for the 
record, relative to the propensity for perhaps some out there, 
who maybe haven't done as good a job, to perhaps fall into the 
trap of presuming that, oh, well, since we haven't done a very 
good job and the Government, you know, the sugar daddy has a 
pot there in Washington. I would like to know if your studies 
and analyses see a trend where some of those locations, maybe 
States, actually are developing a pattern of not being as 
responsive to that, which they could do themselves.
    The mitigation question goes further than just the Federal 
Government's job in that connection as well. So we will talk 
about that at another time, but I am interested in the subject.
    Urban search and rescue teams. We have talked about that 
before. The biggest hole I see in the country's availability of 
responding to the potential needs lies in the Midwest, middle 
America.
    You mentioned the New Madrid Fault earlier, and you never 
know when the Lord is going to look in a certain direction. I 
am anxious to hear, by way of your plans, how that process is 
moving forward as well.

                          comments from states

    I want to touch on one more item and largely ask you to 
respond for the record, but maybe you would have some specific 
comments as well before we recess.
    As you would expect, Mr. Director, we often receive 
comments from our States regarding the operation of Federal 
programs, including, of course, comments regarding FEMA.
    We also, quite often, receive copies of letters sent to you 
to, on the one hand, in your case--I can't say this for every 
agency--in your case, often to thank you, and letters that say 
what have you done for me today or lately.
    We are aware of such recent correspondence, which outline a 
number of concerns, according to the States. It would be 
suggested that we could improve FEMA's performance if we 
adopted all of their suggestions.
    Specifically, they suggest, among other things, one, damage 
survey report teams, lack of technical knowledge of basic 
construction or engineering methods and should, thus, be 
upgraded accordingly.
    Two, the disaster claims process is inappropriately drawn 
out, and documentation requirements are excessive.
    Three, the appeals process is cumbersome and time-
consuming.
    Four, FEMA has made arbitrary and insupportable decisions 
concerning eligible costs.
    Beyond that, fifth, FEMA has on occasion inappropriately 
applied new policies, retroactively.
    Sixth, suspensions of work based on appropriate application 
of NEPA compliance has caused further delays in the post-
disaster process, and that States should be permitted to 
conduct their own environmental assessments, as is permitted by 
other Federal agencies. The latter question is of great 
importance in flooding disasters, I think, especially, but we 
have had this experience in California with fire and earthquake 
as well.
    Director Witt, as I said, we will have you comment for the 
record in detail, if you will, but any comments that you might 
have as we go to recess, I would appreciate.
    Mr. Witt. I am really excited about the questions that you 
have received from the States because we have been working with 
the States, and to address the public assistance program, and 
to look at the appeal process.
    There are three levels of appeal. We don't need three 
levels; we need one appeal. We need to shorten the review 
process. We are looking at the whole public assistance program 
right now and we will come back to Congress with 
recommendations to change legislation so we can streamline the 
program.
    On the environmental issue, we agree wholeheartedly that it 
needs to be pushed back to the States, and let the States do 
the environmental assessment themselves.
    We are already addressing all of these things that you 
asked me to address, and hopefully, very shortly, we will have 
some recommendations to Congress to streamline those processes, 
will save money, and allow us to do them much faster and be 
more accountable as well.
    Mr. Lewis. Thank you very much, Mr. Director.
    When we adjourn or recess for the lunch period, you might 
want to notify your people that the room will be secure. So 
anybody who wants to leave materials here is free to do so.
    When we come back after the lunch break--you know, from 
time to time, you find even the best of friends who find 
themselves looking for other work because they are just worn 
out with what they do, and if it is conceivable that that could 
ever happen to our director, the coming subject that we are 
going to begin with involves long-range weather forecasting.
    Now, if you are able to really respond to those questions, 
we have very interesting prospects for you, Mr. Director.
    Mr. Witt. That would be an honor, Mr. Chairman.
    Mr. Lewis. In the meantime, it was good to be with you, and 
we will see you about 2 o'clock.
    Mr. Witt. All right. Thank you, sir.
    Mr. Lewis. Thank you.

                           Afternoon Session

                          climate forecasting

    Mr. Lewis. The meeting will come back to order.
    Welcome back, Mr. Director, and, Mr. Frelinghuysen, nice to 
have you with us.
    I left the director with a promise that the next topic that 
we have in mind, the need to develop or present evidence and 
expertise, in case there are changes in the world--if he can 
answer these questions, then he is obviously in great demand--
it has to do with long-range weather forecasting.
    So, James Lee, you are, no doubt, aware that this 
Subcommittee has responsibility for providing a majority of the 
annual appropriations for the United States global change 
research program.
    One of the early accomplishments of this program involves 
the emergence of new capabilities to forecast climatic 
conditions and climate variability up to a year ahead of time 
for conditions of climate for some regions of the United States 
and for the world.
    Are you aware of these emerging climate prediction 
capabilities, and does FEMA have any plans to review and adopt 
possible applications of these capabilities to complement some 
of its programs?
    Mr. Witt. Mr. Chairman, we met a few weeks ago with the 
Vice President, the National Weather Service, and several other 
agencies to discuss exactly what you are talking about related 
to climate change, long-range forecasting, and trying to 
develop programs and budgets with a sense towards what possibly 
may happen in the future.
    The other agencies are supposed to be coming over to sit 
down with us, because I was very interested in long-range 
forecasts, in light of what we do, particularly in disasters, 
and how we could use that technology to prepare for the future, 
and even for mitigation. So we are going to sit down with them 
because we are very interested.
    Mr. Lewis. Well, you know, short range, if we look at that 
levee problem in Northern California, and if the pooling is 
eroding some of those levees, we actually can get about, with 
new technology doing the kind of measuring we need to do, and 
one can project the snow pack and additional longer-term 
snowfalls, for example. The implications, obviously, have huge 
potential mitigation possibilities.
    Mr. Witt. They really do, and we are very interested in it. 
I know I am. We had a very good meeting with them that day.

             budget for equipment updating and replacement

    Mr. Lewis. Well, we look forward to continuing that.
    For Fiscal Year 1998, you have proposed an EMPA response, a 
response and recovery budget for just $7,743,000, for a 49 
percent reduction from the 1997 appropriated level. Almost half 
of this reduction is found in the elimination of the $3.4 
million we included in the 1997 bill for replacement of badly 
needed equipment.
    I must say that that is an interesting and a bit 
disconcerting sort of elimination when you follow up on the 
discussions we had this morning about the need to be able to 
continue the efforts towards efficiency you made.
    In an item like that, if an administration person somewhere 
had a will, it is the kind of thing that could be line-vetoed. 
You know, the line item business can be--can have an effect, 
besides affecting the balancing-the-budget problem. I would 
hope that you would get somebody in your office to pay 
attention to that sort of consideration because, within your 
agency, this kind of expenditure often might not be understood 
at OMB, but certainly might be understood by somebody who faces 
a flood or an earthquake or other kind of disaster.
    Although you have included as part of you--1998 request 
some $1.6 million for repair and replacement of equipment, 
surely, this is just kind of the very edge of your real need.
    Can you give us an idea of what your true needs are for the 
replacement and updating of both equipment and emergency 
vehicles?
    Mr. Johnson. In 1997, the current estimate is $8.875 
million farmers and that includes the Congressional increase.
    Mr. Witt. The increase that you gave us for 1997 helps 
replace some of the MERS equipment that we used in Hurricane 
Marilyn in Puerto Rico. It is very old equipment.
    Mr. Lewis. Yes, but I think you went beyond that.
    Mr. Witt. That increase is going to help us a great deal. I 
want to make sure that we developed a list of what equipment we 
would be replacing and what we need for MERS--that is our 
mobile emergency response equipment.
    Mr. Lewis. Right.
    Mr. Witt. That equipment used to be used in the nuclear 
preparedness area. Now we use the people and the resources in 
disasters. We are doing a study on what we need to do to 
continue to update and improve the communications equipment. We 
are in the process of doing that now.
    Mr. Lewis. Let me get specific as you try to answer that 
question. The $1.6 million for repair and replacement of 
equipment, did FEMA include a larger request for such vehicles 
and equipment in the original budget submission to OMB?
    Mr. Witt. No.
    Mr. Lewis. I am really interested in the request.
    Mr. Johnson. No. The request level reflects the base.
    Mr. Lewis. Okay. Would you give us for the record your 
prioritization of the needs that you have out there? If you had 
a wish list, maybe give us some priority line, and I am not 
talking about--I am trying to reflect my comments of this 
morning in that request.
    We intend to put pressure on the agencies that are not 
doing the job or performing well. We even would terminate some 
programs, and that is a little bit difficult to do in 
Washington, but for the agencies that are doing well, where 
there are real human needs involved, it seems to me we ought to 
rethink the definition of tightening the belt.
    Do you agree with that, Mr. Stokes, generally, the thought 
that an agency like this is doing so well, it is involving 
human needs? They got basic equipment stuff. They ought to be 
generous to themselves in their thoughts. We are not going to 
balance the budget on their backs. That is for sure.

                          assessing priorities

    Mr. Stokes. No, absolutely not, and I think neither the 
public wants to, nor do I think our colleagues want to.
    Mr. Witt. Mr. Chairman, let me also follow up on this 
because it is very important to me because we have streamlined 
a lot and changed a lot. I have asked all of the associate 
directors to do a resource review within our agency and look at 
each of the directorates.
    If there is a program in FEMA that is not a priority 
program that is really critically benefits what we do in our 
mission and our role, then there is no reason that we should 
not change that. We are doing those resource reviews of our 
employees and programs, so that we can prioritize what is 
important to the agency and to the mission that we have to the 
country, and get the maximum benefit. That is part of the 
overall assessment that we are doing right now, and hopefully, 
we will have that completed shortly.
    Mr. Lewis. Before going on, Mr. Director, let me welcome to 
the committee--first of all, you have met Rodney Frelinghuysen.
    Mr. Witt. Yes.
    Mr. Lewis. As I indicated, the gentleman from New Jersey is 
a great member of the committee.
    Mrs. Northup is not a member of the subcommittee, although 
she is a new member of the Appropriations Committee. She also 
just happens to be from beautiful downtown Louisville, KY.
    I know that you know my colleague, Joe Knollenberg.
    Mr. Witt. Yes.
    Mr. Lewis. Normally, what we do is go by order of the 
members who come into the committee. There are relatively few 
exceptions.
    We asked Mrs. Northup to come to us, if she could, just 
before the break, and if my colleagues would bear with me, 
because Kentucky is in the midst of this and because our 
colleague doesn't serve on the subcommittee, if we would just 
yield her a few moments to have an exchange with the director, 
would that be all right with my colleagues.
    Mrs. Northup?

                          flooding in kentucky

    Mrs. Northup. Mr. Chairman, thank you so much for your 
indulgence, and I will be brief.
    First of all, I want to thank you, Mr. Witt, for coming to 
Kentucky to assess the damages that have affected so many 
citizens.
    Right now, there are Red Cross reports that almost 3,000 
families in Kentucky are out of their homes, and that one-third 
of these families are in shelters. So you can tell we very much 
need your services.
    I would like to invite you and encourage you to come to 
Louisville. Louisville is by far the largest city in the State. 
It is profoundly affected at this time. I know that you weren't 
able to visit there when you were there before, and I would 
really love it if you could make a trip back.
    The river is higher than it has ever been since 1964. Many, 
many parts of the city have been affected, and have been forced 
to leave their homes.
    I wonder if you would tell me about your visit and your 
ability to assess the damages so far.
    Mr. Witt. I talked to Ron Padgett, the State director for 
Kentucky. I believe it was Monday or Tuesday when I talked to 
him about the flood. Our staff has been there working with the 
State of Kentucky, even before the declaration was signed, 
helping to support them.
    Kentucky, Ohio, and Indiana have really been hit hard, and 
I believe the river is going to crest at Louisville today----
    Mrs. Northup. Yes.
    Mr. Witt. [continuing]. From my understanding.
    Mrs. Northup. That is right.
    Mr. Witt. So the impact is right now. We have already taken 
from Kentucky, I believe a thousand?
    Mr. Suiter. 1,300.
    Mr. Witt [continuing]. 1,300 applications for individual 
assistance in Kentucky already since it was declared. That will 
get people's applications in process from the date they call in 
and apply. If they are eligible, then within 5 to 10 days, we 
should have a check to them----
    Mrs. Northup. Great.
    Mr. Witt [continuing]. So they can get temporary housing--
--
    Mrs. Northup. Right.
    Mr. Witt [continuing]. For that time.

               location of kentucky disaster field office

    Mrs. Northup. Let me ask you--I was surprised that your 
headquarters is in Lexington, which is pretty far removed from 
where the focus of the damage is. Can you tell me why you 
decided to do that?
    Mr. Witt. I didn't know that it was decided. What we 
normally do is work with the State office of emergency services 
and then, go to GSA and ask them, ``This is how many square 
feet we need. Can you find us a place to house--?''
    Mrs. Northup. It did seem rather odd that it would be so 
far out of the center of where the troubles were.
    Mr. Witt. The disaster field office does not necessarily 
have to be in the area that is affected, and sometimes it is 
good that it is not because you are doing more administrative 
work there than anything.
    Mrs. Northup. All right.
    Mr. Witt. You will have service centers set up in other 
areas that have been affected that will have the Federal and 
State agencies inside so that if someone has lost his or her 
driver's license, he or she can go in there and get a driver's 
license, or if he or she needs to talk to the court or FEMA, he 
or she can do it.

                 making additional assistance available

    Mrs. Northup. One final question. I know you have a long 
day here. What is the likelihood and the speed in which this 
determination will be made that the other assistance programs 
that are available when FEMA is involved, the infrastructure or 
public assistance and the hazard mitigation assistance? Only 
one part of disaster assistance is available now. Do you 
consider it fairly procedural that the other two assistance 
programs will be made available, and when will that happen?
    Mr. Witt. Very soon. The State of Kentucky came in with a 
package that was eligible for a presidential declaration for 
individual assistance. As the water goes down, the State and 
FEMA can do the damage assessments on the infrastructure, and 
as that happens, then counties will be added for public 
assistance.
    Mrs. Northup. But your expectation is those other two 
programs will also be part of the disaster package that is 
available to Kentucky?
    Mr. Witt. Most likely with the water you have, I am sure it 
probably will be because you have had sewer plants inundated 
and everything.
    Mrs. Northup. Yes.
    Mr. Witt. So we know it is going to take a tremendous 
amount of work to get them back up.
    Mrs. Northup. Mr. Chairman, I do want to tell you that we 
really appreciate FEMA's existence, their fast action in 
Kentucky. It was really so unexpected, this flood. If you had 
been there, it started raining on Friday night, and in 24 hours 
or 30 hours, we had 12 inches of rain. It really turned out to 
go from a rainy day to a disastrous day, and without you, we 
would have really--I don't know how we would cope with the cost 
of this disaster.
    Mr. Lewis. Mrs. Northup, all day today, beyond the director 
fielding questions and otherwise, on both sides of the aisle, 
there has been praise heaped upon the work that FEMA does. I 
appreciate those comments, and I am pleased to hear you have 
that response.
    Mr. Director, just in case you haven't had a chance to 
focus, this is Mrs. Northup's district in Jefferson County. 
Virtually, almost her whole district is a disaster area, and 
thus, the urgency of her wanting to be present to express both 
those feelings and the appreciation as well. So she is right in 
the midst of it.
    Mr. Witt. Also, let me say that I talked to the Vice 
President when we couldn't get down to your area yesterday, and 
I think they are looking at the possibility of going back to 
Ohio and Kentucky on Saturday.
    Mrs. Northup. Great. We would really appreciate your 
presence there. It has been an incredible flood, and there are 
a lot of people that have lost a great deal. So thank you very 
much.
    Mr. Lewis. I might mention to you further, Mr. Director, 
just for the record, but also for Anne Northup's edification, 
she early on talked to me about first becoming a member of the 
Appropriations Committee upon her election to Congress, but 
then, the prospect of serving on this committee. You can tell 
by her questioning that she, indeed, would make a contribution 
here. So we may be looking forward to that.
    Mrs. Northup. It would be wonderful. Thank you very much, 
Mr. Chairman.
    Mr. Lewis. Mr. Frelinghuysen?
    Mr. Frelinghuysen. Mr. Chairman, I apologize for being 
late, and, Mr. Witt, everything I hear publicly and privately 
is very much in praise of your leadership and the work of the 
people that work with you in FEMA, and I am sure I add on to 
what others have said in previous testimony, but thank you for 
the work that you do.
    I have no questions, Mr. Chairman.
    Mr. Lewis. Thank you, Mr. Frelinghuysen.
    Mr. Knollenberg?

                             flood mapping

    Mr. Knollenberg. Thank you, Mr. Chairman, Mr. Director.
    It is good to see you again, Mr. Witt. I, too, add to the 
comments made by my colleagues and others about the work the 
quality of the work you have been doing, not just now, 
particularly now, but in the past years.
    I am going to go back over a question that I raised the 
last time. I think maybe you referred to your staff on this, if 
I am not mistaken.
    Mr. Witt. I believe it was Elaine McReynolds.
    Mr. Knollenberg. It might have been. And is that party in 
the room, or no?
    Mr. Witt. Well, Mr. Congressman, I hate to tell you this, 
but Elaine got offered another job, and much more money. So she 
left us, and we have the Honorable Spence Perry here with us as 
executive administrator.
    Mr. Knollenberg. You might recall that I had a situation in 
my own district, and I think the Chairman alluded to the fact 
that this is not a remote or a unique case, but a city called 
Northville, which because of improper flood mapping, had 
several people that complained bitterly about being charged for 
insurance premiums via the flood program, only to find out that 
they were not in a mapped area. They weren't exactly, in fact, 
required. There was no exposure. There was no threat of any 
kind of tributary.
    Can you tell me what progress has been made? We did 
register a complaint, if you will, a question as to some 
redress for these individuals who were being charged for an 
exposure that did not exist, literally. I don't know if there 
is any interim report or any kind of closure on that situation. 
Maybe somebody here could tell me if that community--I know 
that communities just like it around the country are getting 
any redress on the exposed--the charge for an exposure that did 
not exist. Do you have any response to that?
    Mr. Witt. Let me answer part of it, and I will call on 
either Dick or Spence.
    First, we are doing everything we can to get the maps 
updated and remapped so there would not be problems in 
communities like this. In some instances, we have found that 
communities actually are more in the flood elevation or the 
100-year flood plain, and in others, they are not. So we are 
redoing the maps.
    Dick or Spence?
    Mr. Krimm. We are looking at revising that. If I could get 
a little more detail on this, I can check it out for you on the 
exact location.
    Mr. Knollenberg. I think there are other localities beyond 
just Northville, but that was one in particular because the 
complaint was recent at that time, and so we registered it, and 
there was a promise to follow through.
    Mr. Krimm. We are doing that, and we also have a technical 
advisory committee now that is looking at ways to improve the 
way we do the mapping.
    Mr. Knollenberg. Also, just with respect to the flood 
insurance marketing campaign, I know a year ago, you talked 
about--and we know it is a fact that so many people don't have 
flood insurance.
    One of the complaints, and I guess it was brought up this 
morning--I was unable to make this meeting because of two 
others, but I think Mr. Walsh brought up the fact that some 
individuals were unfortunately in no position to even obtain 
insurance. Perhaps it was a matter of--and you will have to 
respond to this, but was it a matter of insurance 
representation? I presume it was more rural in the case of Mr. 
Walsh, but I don't know that.
    What was the reason for their problem with getting access 
to an agent? I used to be one, by the way, and I think I might 
have mentioned that previously, too. We handled every request 
that came to us, and I sold quite a number of flood insurance 
policies.
    So I don't know what the problem with Mr. Walsh's district 
was, but I have been advised that this came up this morning. 
Can you respond with some reason why they weren't able to get 
information or coverage for their area?
    Mr. Witt. They can call a 1-800 number here and get that 
information on flood insurance.
    Mr. Knollenberg. Do they know that there is one? I know you 
mentioned that the last time.
    Mr. Witt. Yes. It is in our advertising campaign, too.
    Mr. Knollenberg. But do people get that information? Is it 
advertised in a way where most people will become aware?
    Mr. Witt. We can look at this, but let me also address that 
they could not get insurance.
    Mr. Knollenberg. I don't know that--that was what was told 
to me. I am taking this secondhand. I wasn't here this morning.
    Mr. Witt. Let me tell you what happens sometimes 
Congressman. When I was in Arkansas, as a State Director, I 
used to go around to local governments and county meetings, and 
meet with the local legislative body to try to convince them to 
join the flood program. In my own county, when I was the chief 
administrator of that county, I could not even get a resolution 
passed to join the flood program. While in some of the cities 
within the county, the mayors and the city council passed a 
resolution to participate in the flood program, but the rural 
area in the county didn't. Because they did not pass the 
resolution to be in the flood program, insurance was not 
available to those people.
    Mr. Knollenberg. Has the 1-800 number been effective?
    Mr. Witt. Spence will address that.
    Mr. Perry. It has been very effective. In the 18 months 
that we have been doing it, our policy base has increased from 
about 2 million policies to 3.7 million, and it is growing as 
we speak.
    We are working on a national television campaign very 
strongly. In fact, I am speaking to the Professional Insurance 
Agents group on Monday. We have been involved in every major 
insurance agent meeting in the last year, and have an extensive 
program in training and education for agents.
    We know that at an earlier time, many agents--and I am sure 
you experienced this--had real difficulty with flood insurance. 
It was very complicated, very difficult to write. We have 
greatly simplified the process. Most of the companies now have 
computer software that makes it very easy.
    So I think that, on balance, our educational and marketing 
campaigns are very successful. We even got members of Congress 
to work with us in their districts. It has been a very, very 
helpful thing.

                          subsidized policies

    Mr. Knollenberg. I do know that the improvement in 
simplicity, even prior to my coming here some years back, 5 or 
6 years ago, was getting better toward the end, and I suspect, 
Mr. Chairman, when back in your days as an insurance agent, it 
was nonexistent. They gave you a catalog and sent you off. No 
reference to age here, just experience. Just experience.
    I don't know if I got out of that or not, but anyhow, I 
wanted to ask a couple of questions, too, about the pre-firm 
versus post-firm and where are we with respect to pre-firm. You 
don't offer those anymore. Well, you do offer them, I guess, 
but aren't we moving into an arena and away from the pre-'74 
kind of situation? So that, there are fewer, I would presume, 
subsidized policies now, by far, than there was some years ago.
    I know that when I first came here, I discovered some of 
the losses that occurred on the pre-firm side of things, and 
they are immense. Now, tell me, I believe that they have 
cleaned up on that a good bit, and any policy that is offered 
today does have a--there isn't this again and again and again 
planing process, is there? Tell me there isn't.
    Mr. Perry. It has improved, sir. Our subsidized policies 
are down to about 36 percent of the total; whereas, at one time 
in the early days, it was about 90 percent.
    We are under a continuing mandate to move towards an 
actuarially based policy base. We have a study underway right 
now with Price Waterhouse to report back to the Congress in the 
spring on the subsidy issue, and I think this is a very 
important issue that the Congress will have to come to terms 
with; that is how much subsidy it wishes to remain in the 
program. There may be some situations where its elimination 
would really not be feasible.

                       flood insurance deductible

    Mr. Knollenberg. On the subject of deductibles, do they 
vary across the country?
    Mr. Witt. In the flood policies?
    What is the deductible percent? Do you know?
    Mr. Perry. It varies. I think it is 250 to 500. It can vary 
somewhat.
    Mr. Knollenberg. That is not mandatory that you have a high 
deductible or intermediate deductible? You can choose? Well, 
clear this up for me because I think--and maybe this testimony 
given to me secondhand was a little rough, but that there were 
deductibles as high as $30,000, in California, I think the 
staff----
    Mr. Witt. Earthquake insurance.
    Mr. Knollenberg. Earthquake. Okay, that is what I thought. 
So that clears that up. That, I understand, and typically, I 
think it is still a percentage of the face amount, is it not, 
for floods?
    Mr. Perry. We encourage insurance to value, and certain 
benefits kick in, in terms of replacement cost and that sort of 
thing, and most people do take it.

                     working with insurance agents

    Mr. Knollenberg. Do you continue to work with the insurance 
agencies throughout the country? Through the PIA, you 
mentioned.
    Mr. Perry. Through the PIA. We have our own sort of 
advisory committee, the Flood Insurance Producers Committee, 
which is agent-oriented and represents various groups of agents 
and some individual agents as well, that provide us with 
continuing input and advice on marketing techniques, on things 
they feel would improve matters.
    They were the source of a lot of the simplification that 
went on.
    Mr. Knollenberg. Just to kind of conclude on this subject, 
it seems to me that great strides have been made in the 
direction of improving them, but I still know that so many 
people--and you are finding it out right now--have no flood 
insurance.
    Mr. Witt. Absolutely.
    Mr. Knollenberg. Probably live within walking distance or 
earshot or something of your message, but still don't have it.
    Mr. Lewis. If the gentleman would yield on that point.
    Mr. Knollenberg. Yes, sir.
    Mr. Lewis. I shared this with the director in the past in 
personal conversations by way of discussing the rather 
significant change in the way this industry, this agency 
operates since the day I arrived here, which is when Jimmy 
Carter was President, and we have had a couple of others since, 
and of course, this administration, we probably have as fine a 
director as I have experienced.
    We had a major rainy season out in the countryside. It was 
affecting the Colorado River. One could easily predict what was 
going to happen along the Colorado as it approached a small 
little community known as Needles, California. Not too many 
people know it unless they drive to my State from anywhere in 
the Midwest.
    Needles was going to have a flood problem, and you could 
not get the agency to respond in any way, shape or form, but we 
had little time.
    I wasn't in the casualty business, but I was a life agent. 
So I knew a lot of those people out there. I went out to 
Needles personally. We organized the agents. We went door to 
door and passed out FEMA applications for flood insurance, and 
then these people were protected, and those who responded would 
get their check in the mail. It was quite amazing.
    Mr. Knollenberg. Sold this after the flood or before?
    Mr. Lewis. We weren't selling. You do what you do to 
protect your constituents, and in this case, the insurance was 
available. You could see a flood coming. It is kind of like you 
know it is out there, like you would see the clouds in the sky, 
that long weather prediction. We literally got people to fill 
out applications for Federal insurance that was not available 
elsewhere, and people got protection when the flood came, and 
it was very interesting.
    I would guess we wouldn't have had to worry about that 
organization now because both the agents are better attuned, 
but the agency certainly is more responsive. It is a more 
interesting transition.

                         insurance legislation

    Mr. Knollenberg. Just one final question. What about the--
last year, I think it was the National Disaster Coalition, 
which was producing a number of coverage for the entire country 
with respect to flood, to earthquake, as an addendum to an 
existing insurance contract, or at least in some fashion, it 
would dovetail or intertwine with existing contracts.
    Do you have any comments on the support, the help? Do you 
have any pro or con views about the super risk-type situations 
that would be overlaid on top of existing coverages?
    Mr. Witt. Yes, sir, I do, and the Chairman was asking me 
earlier before we broke for lunch about a similar question from 
Congressman Emerson.
    It was very interesting. Congressman Emerson and all of us 
worked fairly closely on this I can't remember the month that I 
had the opportunity to come up and sit down with him and his 
staff. We went over this legislation because I was really not 
supportive of this legislation in the context that it was 
written.
    The industry was working with Treasury to set up excess 
loss contracts, up to $25 billion, that any time that the 
industry had a catastrophic loss like Hurricane Andrew or 
Northridge earthquake that those excess loss contracts would be 
sold.
    Mr. Knollenberg. Reinsurance.
    Mr. Witt. Reinsurance. That is basically what it is, and 
that part did not bother me.
    What concerned me more than anything was the fact that no 
one could guarantee to us that that legislation was going to 
provide affordable and available insurance in high-risk areas.
    So Congressman Emerson and I talked about this, as I was 
very concerned about that. If insurance is available, then it 
is going to have to be affordable or people will not buy it, 
and that concerned me.
    I was explaining this to the Congressman, and we talked 
about this, and he asked his staff--and I never will forget it. 
He said, ``Is James Lee right about this?,'' and they said, 
``Yes, sir. He is right about this because we have no idea if 
this will make the insurance affordable, and if it will make it 
more available so that people can purchase it,'' and he said, 
``Well, that is not what we are wanting. We want it to be 
affordable and available.''
    Mr. Knollenberg. Are you speaking of the Emerson bill or--
--
    Mr. Witt. I was speaking of the Emerson bill, and I have 
not read the new legislation.
    The other side of this was that I wanted mitigation to be a 
part of this legislation. So I think what we are going to do 
now--I work with the insurance industry a lot, and we have 
worked out a unique partnership in trying to make a difference 
for our country, and I am very proud of that--is work with the 
administration and with Congress in looking at legislation for 
mitigation.
    Mr. Lewis. I must say, Joe, if you will yield further, an 
idea has popped in my mind that kind of repeats history.
    My immediate predecessor involved the Pettis family, a 
very, very fine representative. Jerry Pettis, unfortunately, 
was killed in a personal plane accident, and his widow became a 
member of Congress and a very effective person, and as a result 
of some of his work, she was able to become the point person 
and accomplish some very interesting things that might not have 
been accomplishable by somebody else, and it just occurs to me 
that with that background that we might approach Congresswoman 
JoAnn Emerson and maybe bring some of the agents of the House 
together, as well as other people, and think about a task force 
with the thought of her leading this battle. It could be a very 
interesting development.
    So note that for the record, and maybe you and I will go 
about that.
    Mr. Knollenberg. And I do appreciate that, Mr. Chairman, 
and, Mr. Witt, as well. We, again, appreciate the work that you 
do, and the reason for these questions is to get at a better 
product, hopefully that will do more for everybody and clear up 
the question mark in this whole thing.
    Thank you.
    Mr. Lewis. Thank you, Mr. Knollenberg.
    Mr. Stokes?
    Mr. Stokes. Thank you, Mr. Chairman.
    Mr. Chairman, I want you to note that those barbs you are 
getting about age come from your side of the table.
    Mr. Lewis. Certainly after the Needles discussion, I heard 
kind of a rumble over here. It must have been one of my staff. 
It wouldn't have been Mr. Stokes asking about passing out 
campaign fliers with those applications.

                                 arson

    Mr. Stokes. Mr. Witt, all of the disasters that your agency 
is called upon to respond to are not natural disasters. One of 
those that fall in that category has been the very vicious and 
cowardly act of church burnings in this country, and of course, 
FEMA has been asked to respond to that in some way.
    Can you tell us about that program?
    Mr. Witt. Congressman Stokes, the President asked us to 
lead a part of the church arson program dealing with 
prevention. By working with Justice and law enforcement 
agencies, including the Sheriffs Association, the Chiefs of 
Police Association, as well as all of the national fire 
associations, AmeriCorps, and communities, we have put in place 
an arson prevention program.
    Macon, Georgia, for one, is a pilot project in the 
prevention program. We have reached a lot of communities with 
very limited staff, and very limited funding, and I am very 
proud of what we have done.
    Carrye, do you want to add anything on the program? I think 
it has been a very successful program, don't you?
    Ms. Brown. Yes. I am Carrye Brown, and I am the U.S. Fire 
Administrator. The program has been very successful. It 
actually augmented the program that we have at the National 
Fire Academy which trains fire service personnel.
    Along with the program out of the Director's office, we 
have a very strong community arson program outreach effort, 
which also works through the governors' offices and with local 
officials, as well as the fire service organizations.
    Mr. Witt. We set up in conjunction with the National Fire 
Academy a 1-800 number that provides information on prevention. 
We also put a packet together, the training tools that a 
community needs to help them in prevention efforts.
    We have actually gone out in the communities, too.
    Mr. Stokes. How does your efforts or your program tie into 
the Bureau of Alcohol, Tobacco and Firearms where they have a 
line item of church fire investigations where we appropriate 
funding? Do you tie into that at all?
    Mr. Witt. Yes, sir. We have done this in a joint effort 
with ATF, FBI, and other Federal agencies. We have met many, 
many times on this.
    ATF does more training with the State fire marshals on the 
investigative side and with local law enforcement on how to 
protect evidence, until someone can investigate it.
    Mr. Stokes. In terms of your program, is additional money 
needed?
    Mr. Witt. Well, we are at the point now where this is 
transferred over to the U.S. Fire Administration, where they 
are doing the follow-up on the commitment we have made to the 
communities to provide the information that they need to 
continue the program. So I think we are okay budget-wise, don't 
you, Carrye?
    Ms. Brown. That is correct. We are able to manage.
    Mr. Lewis. If you would yield, Mr. Stokes.
    Mr. Stokes. Certainly.
    Mr. Lewis. Mr. Stokes is asking that not for a light 
reason.
    Mr. Witt. Oh, I know.
    Mr. Lewis. Indeed, if there is a question to be discussed 
further there between you. Please feel free to get back to us 
for the record.
    Mr. Witt. We will. We would be happy to.
    Mr. Stokes. Thank you, Mr. Chairman, for that.
    Mr. Witt. What is it, Gary? Did you have something you 
wanted to add?
    Mr. Johnson. I was just going to indicate to you, Mr. 
Stokes, that in the U.S. Fire Administration's budget, we are 
committing in FY '98 about $1.3 million to continue these 
initiatives and other ongoing arson projects.
    Mr. Stokes. So do you think that will be adequate for our 
purposes at this time?
    Mr. Witt. I think so with what we are doing with the 
follow-up.
    Mr. Stokes. Right.
    Mr. Witt. I think it will be.

                       public assistance appeals

    Mr. Stokes. Director, you indicate on page 8 of your 
statement--you propose eliminating one level of appeal in the 
public assistance program. Can you tell us what you mean by 
that?
    Mr. Witt. Yes, sir. Congressman Stokes, what we have now is 
a system that takes too long in the review process and the 
appeal process. If a subgrantee wants to appeal because they 
feel like they are not justifiably getting enough money to do 
their project, they go through the first appeal at the regional 
level, then they go through the second appeal at the associate 
director level, then, the third appeal comes to me.
    By cutting the appeal process down from three to even two 
or one level, it will help the applicants by speeding that 
process up. It will not drag out over 2 years. We have to 
realistically look at this, in that same manner as the public 
assistance program. This is just one part of the many things 
that we are doing to streamline.
    Mr. Stokes. A statement, Director, also says you are making 
other procedural adjustments that will reduce costs now and in 
the future. Be a little more specific and tell us what you have 
in mind there, what you are referring to, and how much money 
will be saved in that area.
    Mr. Witt. Let me go through this with you. When a disaster 
is declared and our inspectors go out to a local area--they may 
find 5 miles of road that has been absolutely washed out. Maybe 
there were two bridges on that particular road and five cars. 
Well, in the past, a damage survey report was written for each 
one of the culverts, plus each one of the bridges, plus the 
miles of gravel that were washed off the pavement on the road.
    So here we've got 15 or 20 damage survey reports for that 5 
miles of road. My point is, let's do one damage survey report 
for that one 5 mile section of road, and keep the red tape 
down.
    Then, under the review process, the damage survey reports 
come before a joint State team and a joint team from FEMA which 
slows down the review process. That is when the appeal process 
kicks in.
    Here we go on for months, while we really need to get the 
money in the hands of the local government to build that bridge 
or build that road, so those school busses can run over them. 
That is why we are trying to streamline this now.
    I think the IG's report, from what we have talked to them 
about points up the fact that we probably will save a 
tremendous amount of money by streamlining simply because we 
are overburdened with administrative costs. This is not what, I 
think, Congress intended us to do, which is to rebuild faster, 
but still be accountable. So those are some of the things we 
are trying to do, but there is a lot more. I could talk to you 
all afternoon about this one.
    Mr. Stokes. I am sure you could. I am sure you could. That 
is why we wanted to give you a chance to respond in this area.
    Mr. Chairman, I am ready to move into another area of 
questioning. So I would yield at this time and wait until the 
next round.
    Mr. Lewis. All right, Mr. Stokes.
    Mr. Frelinghuysen?
    Mr. Frelinghuysen. Thank you, Mr. Chairman.

                      funding for the fire academy

    A few minutes ago, a reference was made to the National 
Fire Academy. Mr. Director, you may be surprised to learn that 
the majority of the FEMA questions coming to the committee have 
to do with funding for the National Fire Academy.
    Based on the number of inquiries, one would expect you or 
we were out to get the fire community, even though they had 
been fully funded over the past few years.
    For the committee's benefit and the benefit of any of the 
fire community who may be listening to this, can you please 
inform the committee as to the 1998 budget request for the fire 
academy, how it compares to previous years? And for the record, 
please provide a specific and detailed budget for all aspects 
of the fire academy program.
    Mr. Johnson. The request by----
    Mr. Lewis. Mr. Johnson, would you identify yourself?
    Mr. Johnson. Gary Johnson, chief financial officer, 
Congressman.
    The request for the National Fire Academy for 1998, in 
total, is $8.443 million. That includes 38 work years, $2.556 
million for salary and expenses and EMPA dollars of $5.887 
million.
    Mr. Frelinghuysen. And you will be good enough to provide 
the detail for the committee after the conclusion of this?
    Mr. Johnson. Yes, sir.
    Mr. Frelinghuysen. Thank you.
    [The information follows:]

                   National Fire Academy (NFA) Budget

    The National Fire Academy (NFA) budget request for 1998 
includes a total of $8,843,000, of which $2,556,000 is funded 
from the Salaries and Expenses appropriations and $5,887,000 in 
program funds fall under the Emergency Management Planning and 
Assistance appropriation. Plans for the program funds are as 
follows:
    Develop/revise resident, field, and regional delivery 
courses as well as use of alternate delivery format, evaluate 
the impact of individual courses in NFA curriculum, and 
continue a national needs assessment for NFA curriculum 
planning, and provide materials to the American Council on 
Education for course accreditation. ($1,300,000)
    Conduct on-campus and off-campus delivery of NFA training 
courses and other specialized training programs: ($3,427,000)

------------------------------------------------------------------------
                                    Number of                           
        Delivery programs             course     Number of     Student  
                                    deliveries    students       days   
------------------------------------------------------------------------
Resident.........................          184        4,100       39,934
Field/State weekend..............          433       13,622       27,324
Regional.........................           30          750        4,650
------------------------------------------------------------------------

    Manage the preparation and delivery of the Annual Fallen 
Firefighter Memorial Ceremony and Luminary Service. ($35,000)
    Continue the management of an interagency agreement to 
print, stock, and disseminate training materials to the 
nation's fire and emergency service personnel. ($125,000)
    Deliver simulation and training programs and exercises both 
on-site and at remote sites nationwide. ($1,000,000)

                         disaster loan program

    Mr. Frelinghuysen. In June of last year, the General 
Accounting Office delivered a report to our committee and to 
Chairman Lewis' counterpart, Senator Bond, regarding a 
community disaster loan program operated by FEMA. The primary 
finding of this report indicated that some of the $100 million 
loaned to the communities through this program, only $3 million 
had been paid back, while $7 million in principal and interest 
had, consistent with law, been forgiven.
    Perhaps more important, the GAO concluded that there was a 
very high likelihood that most of the remaining loan balance of 
$93 million would also be partially or fully canceled.
    I should hasten to add that most, if not all, of these 
loans were made prior to your arrival, Director Witt.
    Mr. Witt. Yes.
    Mr. Frelinghuysen. Would you please enlighten the committee 
on, first, why this program was created, how it was meant to 
work, and how it has worked in actuality?
    Mr. Witt. Congressman, of course, I wasn't here when the 
program was created, so it would be difficult for me to tell 
you, but I will sure try to find out for you.
    Let me say this about the community disaster loans. A good 
example of that program is in the Virgin Islands where 
Hurricane Hugo came through and a community disaster loan was 
given to the Virgin Islands at that time.
    Eighty-nine million dollars. Very little has been 
collected, and we are in the process of looking at forgiving 
that loan or some portion of it.
    A community disaster loan was given in Hurricane Andrew for 
Miami and also Homestead. I believe Miami has been forgiven. We 
have been working with Congresswoman Meek on Homestead, and I 
have met with the Homestead officials. Price Waterhouse is 
relooking at that one to see if it is repayable by Homestead.
    What happens is that after the first 3 years following a 
disaster, if the local government does not have the capability 
to repay the loan, then there are adjustments made for the 
community.
    Congress just authorized us over $100 million for the 
Virgin Islands for Hurricane Marilyn. Is it a program that, as 
a loan program, is good? I personally don't think so.
    If you are going to administer a program like this, then 
let it be a grant program if they can't pay the money back. Why 
spend all the money we are having to spend administratively to 
support these loans and to have accounting firms go in and do 
audits of the cities or governments that are getting the loans 
if they are not being repaid?
    Also, we have a cost share or State share loan that can be 
provided to a State or local government that can't meet its 
cost share. If there is going to be a loan program like this, 
maybe we need to look at an economic development-type program 
through EDA or Commerce or even SBA, but for FEMA to be in the 
loan business and following up on loans is very difficult.
    Mr. Frelinghuysen. Absent a legislative fix, I will ask you 
to comment on what you think might be within the realm of 
possibility. Could you provide the committee at some point in 
time with a specific plan to have to deal with whatever the 
outstanding loans are?
    Mr. Witt. Yes, I sure can.
    Mr. Frelinghuysen. From your perspective, it appears to 
make some sense that we need something else either to abolish 
this program or to come up with some other alternative, and 
would you be good enough to suggest some possible alternatives?
    Mr. Witt. Yes, sir.
    Mr. Frelinghuysen. Thank you very much.
    [The information follows:]

                 Community Disaster Loan Program (CDLP)

    Our recent cost-cutting panel recommended the repeal of 
this section (Section 417 of the Robert T. Stafford Disaster 
Relief and Emergency Assistance Act). FEMA intends to submit 
legislation that would accomplish that repeal.
    Further detailed information on the CDLP is contained in an 
answer to a question for the record by Chairman Lewis.

                                 csepp

    Mr. Frelinghuysen. Relative to the chemical stockpile 
through a relationship with the Department of Defense, 
specifically the Army, FEMA has been participating in the 
chemical stockpile emergency preparedness program. I am aware 
that relationships in this partnership have been strained of 
late and that there has been much interest on the part by some 
in Congress to make the changes necessary to make this program 
operate differently.
    Could you shed some light on this matter, please, and let 
us know where the program stands today, and where you expect it 
will be in 6 to 12 months?
    Mr. Witt. The chemical stockpile program, to me, is a very, 
very important program, particularly around the eight arsenals 
that we have in the United States. What is really important is 
the fact that those communities around those arsenals need to 
have protection, particularly when we are getting rid of that 
stockpile of old agent-type weapons.
    I have been involved in that program for a long time as a 
State director, and now as FEMA director. I have also been 
involved with meeting with Mr. Decker from the Army. I have 
also recently gone over and met with Secretary Togo West about 
this program because of my concern and the way the program is 
going.
    I have voiced my feelings to the Secretary and to Mr. 
Decker, about what changes I thought should be made to 
streamline this program, to cut administrative cost, and to 
make it a program that is good for the local governments that 
are in this program.
    Secretary West has been very receptive, and we are doing 
some follow-up meetings to see what we can do to make the 
program less burdensome at the Washington level, and work 
through our performance partnership agreement process that we 
have with the State and local government. I think it would work 
better. I think it would work smoother. We do our job very well 
with local government; they are our true partners, whatever the 
program is. If we can't streamline, and make it a program that 
is really good for our States, counties, and cities around the 
arsenals, then I would be willing to pull FEMA out of that 
program and let DOD run it.
    Mr. Frelinghuysen. You will let us know if you feel--and 
Congress may feel inclined itself--if there is something 
Congress should do legislatively, if you would be good enough?
    Mr. Witt. Yes, sir, I would be happy to.
    Mr. Frelinghuysen. Would you please continue to keep this 
committee informed on a regular basis on what is happening?
    Mr. Witt. Yes, sir.
    Mr. Frelinghuysen. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Lewis. If the gentleman would allow me for just a 
moment to follow up on that very briefly.
    I think the director is making a very significant point 
here. While local communities are truly the Federal 
Government's partner in disaster circumstances, it is very 
clear that FEMA is, in an emergency, a response organization. 
They don't want to be a local bank, and they don't want to be 
in the long-term lending or collection business.
    Mr. Witt. That is right.

                             disaster loans

    Mr. Lewis. Already, they are cutting back on personnel at 
levels that are unacceptable to me at this point, but beyond 
that, some of these activities take away from the capability to 
respond.
    So let me just make the point, and it is not by way of 
casting aspersions in any direction, but within the 
justifications, there is a listing of some cities that I would 
just--or communities who requested loans or received loans. The 
U.S. Virgin Islands, $50,100,000, and you add on interest of 
the accrued loans, a total of $70 million. The U.S. Virgin 
Islands, I mentioned. Homestead City, Florida--somewhere, I 
heard Homestead--$10,325,000. Along with interest, that becomes 
$12,500,000. Florida City, Florida, about a $1,200,000. The 
City of Miami, two loans coming up to above $10 million. Kuai 
in Hawaii, a total of $11,500,000-plus. American Samoa, a total 
of $11,500,000.
    No principal or interest payments have been made on those 
loans. They represent about 90 percent of the loans 
outstanding. Applications for most of them have been made for 
cancellation of the loans. It virtually becomes a grant 
program, presuming, and most people are anticipating that 
significant levels of those will be forgiven.
    We find ourselves in a circumstance where we are 
exercising, as the Director so clearly put it, an 
administrative process that may be just a bit of Washington 
silliness. I think we together need to rethink that whole 
process. I hope that our Committee will be willing to and that 
others in the Congress will consider the point as well. So 
thank you very much.

                            dod as a partner

    Mr. Witt. Mr. Chairman, let me also add, not about the 
chemical stockpile program, but about DOD. DOD has been a true 
partner with us and has worked very, very hard with us in 
everything that we have done in preparedness and response to 
national disasters, and I want to make sure that it is 
understood that there are a lot of things that we could not do 
without DOD. They have been a really good partner.

                         performance agreements

    Mr. Lewis. The gentlelady from Florida.
    Ms. Meek. Thank you, Mr. Chairman.
    Mr. Witt, I understand that after the National Performance 
Review, FEMA initiated a Performance Partnership Agreement 
process. You may have discussed that when I was out of the 
room. Will you please outline this process for the committee, 
and after which, tell us if it has had any positive effect on 
the States' capabilities to work within this area?
    Mr. Witt. We started the process last year. The reason we 
put it in place was that the old CCA process that FEMA used as 
a funding tool down at the State emergency management was a 
process that I felt did not really, truly help the States to 
develop the programs against the risks they faced. It was more 
like, ``you will do this training and this training,'' and 
``you will have a 4-year exercise program,'' and ``this is the 
exercise that you will have this year and that year,'' and it 
was dictated from the State down to the local government's 
emergency management organization.
    Now, I have seen this. I have been there, and they would 
say, ``okay, local emergency manager, have you done this?'' and 
they would say, ``yes.'' This is by phone, and they would check 
that box, and ``so have you done this,'' and they would check 
that box.
    The CCA was a funding mechanism that didn't really bring 
the State's capability up to meet the risk that each State 
faced. Each State has a different set of risks.
    So what we tried to do by establishing Performance 
Partnership Agreements was to give the States the flexibility 
to design their programs against the risks they faced in that 
State. It really has helped, and it is making a difference.
    So, in each year, I think it is improving.
    Ms. Meek. So are you going to be able to measure the 
capability with reference to the criteria which you have just 
mentioned?
    Mr. Witt. In conjunction with the States and our staff at 
FEMA, we are developing a program for the States to establish a 
baseline, which they have never had, of where they are in 
relation to our GPRA goals, and what they need to be 
accountable for those goals. Through the regions they will 
actually see what they are achieving toward the goals that they 
are trying to reach. I think it is going to be very successful.
    Ms. Meek. Thank you.
    Thank you, Mr. Chairman.

                          mitigation programs

    Mr. Lewis. Thank you very much, Ms. Meek.
    Mr. Director, a few questions will pretty much complete 
what I want us to do for the record today, or at least here in 
this meeting, but going back briefly to mitigation programs, as 
you noted in your budget justification, FEMA's mitigation 
programs are essentially supported through two funding streams. 
One is direct Federal appropriations, and the other is through 
reimbursement from the National Flood Insurance Fund, paid for 
by flood policyholder fees.
    As I understand it, beginning in 1997, you will initiate a 
75/25 cost share arrangement for grants to the States which 
come through the direct appropriation.
    Could you please explain in some detail why you are 
instituting this cost share for EMPA mitigation grants and what 
you hope to accomplish?
    Mr. Witt. The mitigation program.
    Mr. Lewis. One more time.
    Mr. Witt. The mitigation program, Mr. Chairman, was a 50/50 
cost share.
    Mr. Lewis. Correct.
    Mr. Witt. If you have a disaster, and you have to match a 
25-percent cost share and still spend the monies that you need 
to respond and recover it is very difficult for a State or 
local government to come up with a 50/50 cost share to do a 
mitigation project.
    We found a lot of the States and local communities and 
subgrantees affected by disasters were not using the mitigation 
dollars because they couldn't afford the cost share.
    So we have changed it to 75/25, in order to have mitigation 
projects. So, why are we doing it? Because it is going to save 
all of us money in the future by mitigating against those 
future losses.
    Mr. Lewis. I appreciate that response.
    Do you make similar grants to States for activities which 
are flood-related?
    Mr. Witt. Through the flood fund.
    How much monies do we have in that, Dick?
    Mr. Krimm. In mitigation?
    Mr. Lewis. Yes.
    Mr. Krimm. In 1997, we have a $12.5 million for mitigation 
grants. We were authorized $20 million.
    Mr. Lewis. Have you discussed the obvious question 
following that last series about cost sharing? Have you 
discussed the feasibility of cost sharing in that category as 
well, like the 25 percent?
    Mr. Witt. 75/25.
    Mr. Lewis. I would be interested in a discussion regarding 
that.
    Mr. Witt. Okay.
    Mr. Lewis. I am intrigued that in this mitigation activity, 
your overall budget has continued to go up for each of the last 
three fiscal years. Nevertheless, the budgets for earthquake 
hazard reduction, the hurricane and dam safety programs, and 
the State hazard mitigation program have all remained level, 
while only the flood plain management program has increased.
    It would appear that this particular program has increased 
only because collections and/or rates for policyholders have 
increased over this period. In other words, the flood 
mitigation expenditure may not necessarily reflect the true 
need, while the other mitigation programs have borne the brunt 
of efforts to reduce expenditures. Am I on the right track 
here, or is there something I am missing?
    Mr. Witt. The flood mitigation grant program was 
established because of the 1994 flood reform act, which 
required that we implement a program at the regional level, 
State level, and Federal level.
    You appropriated money to increase the hurricane program 
because we had a national hurricane program that was $896,000 
in 1993. When I brought that to the committee's attention, the 
Congress helped us to increase that.
    Mr. Johnson. The request for the hurricane program is 
$5.896 million.
    Mr. Witt. $5.896 million. My goal was to try to get to $10 
million at some point for the national hurricane program.
    However, the increase helped States do assessments, 
improved their response, and identified emergency routes.
    Mr. Lewis. Would you provide more detail for the record? I 
am interested in knowing what you would estimate the true need 
is for these mitigation programs, including the flood program 
and how much is drawn down on the flood insurance fund for 
these mitigation programs which could otherwise, perhaps, go to 
repay outstanding borrowing or reduce rates.
    Mr. Johnson. The current fee that we expect to collect and 
spend on our mitigation programs and our salary expenses for 
the mitigation people that work on that, as well as in the 
Federal Insurance Administration is $100,074,000, Mr. Chairman.

                         flood insurance rates

    Mr. Lewis. Okay. Thank you.
    While I am on this subject of flood insurance, your flood 
insurance fund appropriation language provides for your ability 
to increase annual flood rates. Do you anticipate raising these 
rates either in 1997 or 1998?
    Mr. Witt. Some.
    Mr. Lewis. Can you give me some idea of what level?
    Mr. Perry. Mr. Chairman, there is a range around 7 to 10 
percent, depending on location. Plus, in some cases, an 
additional $75 increased cost of construction fee. This year, 
we do have a waiver on the standard 10 percent cap on premium 
increases to accommodate this.
    Mr. Lewis. The 7 to 10 percent probably reflects your 
reality check as it relates to more difficult areas.
    Ms. Perry. Yes, sir. They are actuarially based, and we can 
provide you with a full listing of those for the record.
    [The information follows:]

                         Flood Insurance Rates

    FEMA's main rate changes for FY 1997 are the following:
    13% increase in rates for subsidized policies.
    9% increase in rates for Standard Policies in zones B, C, 
and X.
    13% increase in rates for Preferred Risk Policies in zones 
B, C, and X.
    2-10% increases in other various categories.
    These increases include consideration of standard flood 
insurance experience and the introduction of the new coverage 
for Increased Cost of Compliance authorized by the National 
Flood Insurance Program (NFIP) Reform Act of 1994. The Act 
allowed for exceeding the 10% premium increase restriction in 
providing that coverage.
    For FY 1998, FEMA rate changes have not been determined at 
this time. Any changes will depend on the review of rates and 
underwriting experience to be conducted later this summer. FEMA 
conducts an annual rate review to ensure that the rates are 
sufficient to pay losses arising from the historical average 
loss year. To the extent that a higher-than-average loss year 
serves to raise the historical average, it may require some 
increase in rates. However, any possible increase will not be 
related to the need to borrow.

                      flood losses and collections

    Mr. Lewis. Okay. In 1996, you experienced loss and loss 
adjustment expenses, which were higher than expected, and made 
collections which were lower than expected. What were the 
factors behind these losses and reduced collections?
    Mr. Lewis. Please speak up. The recorder would appreciate 
you speaking up.
    Mr. Perry. Our primary problem has been extraordinarily 
high losses over the last 3 years, frankly. Our experience has 
been no different from that of the private sector, and of 
course, this has resulted in the borrowing that you have seen 
in our balance sheet and the request for increased borrowing 
authority which you all very graciously approved last fall. 
This gave us an extra $500 million, which gives us a more 
comfortable pad to get us through the next few months.
    Frankly, the program is not actuarially based in full. We 
mentioned earlier that over a third of our policies do enjoy 
some form of subsidy, and in high-loss situations, high-loss 
years, we are going to have deficits that we will have to cover 
with borrowing which we hope to repay in the out-years when we 
have better loss experiences.
    We have done this in the past. We can't make a definite 
scenario as to our ability to repay in the future. We run some 
very informal ones, and depending on what our experience is in 
the out-years, it is anywhere from 25 to 75 percent that we can 
repay in full what we borrowed thus far.
    Mr. Lewis. I have an additional follow-on question. In 
part, I think you have answered it at least for me, but what 
have you done or what has happened in the marketplace that 
should prevent this similar result in 1997 or 1998? Now, 
separate from praying, I am interested.
    Mr. Perry. Well, we do a lot of that on a non-
denominational basis.
    Mr. Lewis. Hopefully.
    Mr. Perry. Frankly, we are working through our marketing 
program to begin to spread our losses into less hazardous 
areas.
    Earlier someone made the observation that people have no 
risk of loss, and our view is that virtually every American has 
at least some risk of loss from flood. If you live in a non-
hazardous area, you can buy flood insurance from us at a very, 
very favorable rate, and we are beginning to try to sell those 
policies. As we spread our risk, our hope is down the road that 
even if we have a high-loss year, the risk will be sufficiently 
spread that we won't have these really horrible losses that we 
have the last 3 years.
    Mr. Lewis. Thank you.

                 cost share for state and local grants

    Under preparedness, training, and exercises in the EMPA 
account, you proposed a 1998 budget of just under $125 million, 
a slight reduction from the 1997 level. The bulk of these 
funds, or some $109 million in 1998, would go to State and 
local assistance grants. In 1996, the committee expressed its 
desire that FEMA cost-share these grants on a 50/50 basis, 
which I understand you have done.
    Yet, now we hear this has posed a peculiar hardship on the 
States. Does that fit in with the area of discussion we had? 
Let's discuss it one more time, briefly.
    Mr. Witt. Of course, it was recommended in the report that 
we continue a 50/50 cost share. I strongly feel that we should 
go to a 75/25 cost-share to make the States better equipped. 
The States could build stronger emergency management programs, 
and even purchase equipment that they so desperately need. I 
think in the out-years, that favorable cost share will benefit 
all of us more in future dollars.

            budget for preparedness, training and exercises

    Mr. Lewis. Let's discuss that further as time goes forward 
for the record as well.
    While your aforementioned EMPA budget for preparedness, 
training, and exercises shows a reduction of just over $4 
million, your salaries and expense budget for the same activity 
shows a drop of nearly $7.5 million from the 1997 level. That 
amounts to a 27 percent reduction. Why are you proposing such a 
dramatic reduction and personnel compensation, and 
specifically, what impacts will such a reduction have upon your 
training programs?
    Mr. Witt. Well, of course, the thing to remember is that we 
are streamlining the administrative side of programs to put 
more emphasis on our customers.
    Mr. Johnson. The reduction that you are talking about in 
salary and expenses, is, in fact, reflecting a redistribution 
of personnel assets for Mount Weather to implement the working 
capital fund that you folks so graciously authorized last year. 
The dollars that were in PT&E for Mount Weather have been 
redistributed back to the users.
    Mr. Lewis. That kind of elaboration is very helpful, and I 
was going to ask you to do some of that for the record. In 
fact, outside of maybe some closing remarks, the rest of the 
questions that I have, Mr. Director, can be handled in the 
record, and I would urge you to do that and recognize that 
other members may have questions for the record as well.
    Mr. Stokes?
    Mr. Stokes. Thank you, Mr. Chairman.

                          disaster projections

    Mr. Director, I think we all recognize that estimating the 
cost of natural disasters is just a very imprecise art, but it 
strikes me that the aspect of estimating when funds will be 
needed may be even more difficult than estimating how much is 
needed.
    I think the experience of the Loma Prieta earthquake and 
the Northridge earthquake bear this out. Billions of dollars 
were estimated to be needed and were appropriated in both 
cases, but years later, we are still paying for those disasters 
and many others.
    Parenthetically, I might add, this situation is not 
entirely detrimental because, to the extent that unallocated 
money remains in the disaster relief fund, it can be used for 
other emergencies, although it might have originally been 
requested in response to another need.
    What is the agency doing to try to develop better 
estimates, not only in how much funding is needed, but when it 
is needed?
    Mr. Witt. First of all, I think that we now have in place 
the financial management system that can give you good data, on 
what we have used and help determine what we will need.
    I am very excited about what Gary has been able to put in 
place because, before, if you remember, Congressman Stokes, we 
couldn't even give you a balance; so it was very difficult when 
Congress said, ``well, how much money do you have in your 
disaster fund?''
    Mr. Stokes. Right.
    Mr. Witt. So now the fund has been reconciled, Gary, do you 
want to tell them how we reconciled and what we have done on 
that?
    Mr. Johnson. Mr. Stokes, I will tell you that this has been 
one of the biggest challenges I have faced. Back in 1993 when 
Director Witt asked me to try this position, his number-one 
objective was to put in a financial management system that 
complied with the CFO Act requirements and the joint financial 
management improvement program.
    You were very supportive of us in providing some dollars, 
and in fiscal 1994 we were the only agency in the Federal 
Government to procure a financial management system.
    It took us a year to get ready to begin to implement it, in 
fiscal year '96. It probably was not the best year to do that, 
I might add, just because of the shutdowns and so forth. You'd 
like to have continuity. However, we worked through that. The 
system is working very well.
    With respect to the disaster relief fund--this is where I 
think the director was coming from--we had data on our old 
financial management system. We did not want to load old 
unreconciled data onto the new system for obvious reasons.
    Last year, through the good work of my staff, we for the 
first time in the history of the disaster relief fund, 
reconciled over $18 billion of activity and transactions.
    I think my colleagues in the IG's office were pretty much 
astounded by the magnitude by the activity as well. They did 
agree that we had balances to move forward within the beginning 
of FY 1997.
    We still have, as you would expect, difficulties that we 
encounter in bringing up a new system, particularly the 
interfaces with some of our older systems. We are attacking 
those right now.
    Director Witt mentioned, and it is in direct response to 
your question, projections and projected cost data. This is one 
of the areas that we have recently been trying to nail down, 
and make sure it interfaces well. This is the data that not 
only we need, but you also need to feel comfortable with 
requirements.
    I think the most difficult part of this whole business is 
not knowing what Mother Nature will deal to us over what period 
of time. It is difficult for us right now to get a factor for 
seasonality and so forth. As a result--and I know both your 
staff and OMB's have talked to us about trying to look at a way 
other than using averages. We have adopted for our projection 
purposes the 5-year average obligations less Northridge. 
Northridge, because of its size was, we felt, an outlier. I 
hope it is always an outlier, and we never see anything like 
that again.
    Interestingly enough, when we adopt that methodology, our 
actual obligation rates have, in fact, exceeded that average 
adjusted for each year, and last year was a very good example. 
Our obligations, less Northridge, exceeded what we projected by 
about $300 million, Mr. Stokes.
    We would sure love to figure out a way to project what 
Mother Nature is going to deal to us in any given year.

               remaining requirements from ca earthquakes

    Mr. Stokes. Can you tell us what remaining requirements on 
the disaster relief fund are expected due to Loma Prieta and 
the Northridge?
    Mr. Johnson. Yes, sir. If you can just bear with me.
    Mr. Lewis. Please don't ask him about the Ohio River yet.
    Mr. Stokes. No. It is a little too early for that.
    Mr. Johnson. You asked for the requirements for Loma Prieta 
earthquake, Mr. Stokes. The overall projected cost we have is 
about $895 million. We have remaining costs out there of about 
$62 million. So we are about to finish that one off, we 
believe.
    With respect to the Northridge earthquake disaster, our 
current projected total cost for that disaster--and you will 
see why we hope it is always an outlier--approaches $7.8 
billion, and we have what we believe right now approximately 
$2.6 billion of remaining requirements.
    Mr. Stokes. I think we can be pleased----
    Mr. Lewis. I am glad you asked that question.

                        counter terrorism funds

    Mr. Stokes. Obviously, you have come in great ways in terms 
of being able to manage this particular area of budget.
    FEMA received $15 million in 1997 for the President's anti-
terrorism initiative, and he is requesting an additional $6.3 
million in 1998 for that purpose. What has the agency done to 
date with the 1997 funding, and what are the specific 
requirements intended to be funded in the 1998 request?
    Mr. Johnson. The overall figure is $15 million for 1997, 
Mr. Stokes. That breaks down, of course, into $3 million in our 
salaries and expense appropriation and $12 million, in our EMPA 
appropriation.
    If you will, I would like to give you just the totals 
broken down by categories. Of that $15 million total, we are 
planning to spend $5.6 million for consequence management 
planning and coordination activities; that is, the Federal 
planning side of reviewing how the Federal agencies interface 
with each other in dealing with these unique circumstances.
    We plan on spending $3.973 million for basically State and 
local training and working this program down to the local 
level. Of that $4.0 million, $2.3 million is going to the 
States. In fact, it is already in their hands.
    We are planning to spend $2.8 million on personnel and 
protective measures, measures to ensure the security of FEMA 
personnel not only here in headquarters, but throughout the 
Nation; and then we are also proposing--and we actually are in 
the process of doing this--spending $2.595 million of which 
$2.5 million will be going to the fire service community for 
fire training programs related to terrorism.

           legislative authority for pre-disaster mitigation

    Mr. Stokes. Mr. Director, you highlighted that the $50 
million included in FEMA's 1998 budget request for pre-disaster 
mitigation programs. Does this legislation require any 
additional legislative authority?
    Mr. Witt. It may later, yes, sir.
    Mr. Stokes. I would think the probabilities are that you 
are going to have to ask Congress for some legislation, 
particularly if you have any major features of this type of 
legislation.
    Mr. Johnson. Mr. Stokes, you are correct. This is a 
legislative proposal. We want to expend that $50 million should 
you appropriate it.
    Mr. Lewis. Please talk to us about that, if you would.
    Mr. Johnson. Yes.
    Mr. Stokes. Mr. Chairman, I have a number of other 
questions which I will be glad to submit for the record, but I 
do want to take just a moment, once again, to say how 
refreshing it is to me as a member of this Subcommittee and one 
who has sat here many years and dealt with this particular 
agency to see the enormous professionalism that you have 
brought to this job.
    I think it is comforting for people throughout the country 
to know that we have this type of conscientious concern about 
natural and manmade disasters from an agency of this type. I 
just want you to know that I am very appreciative of the work 
that you do.
    Mr. Johnson. Thank you, Mr. Stokes.
    Mr. Stokes. Thank you, Mr. Chairman.
    Mr. Lewis. Ms. Meek?
    Ms. Meek. I just want to say that I, too, am very grateful, 
number one, to be on this Subcommittee and to be able to face 
the people who help us face our problems throughout the 
country, most noticeably has been FEMA's efforts.
    Even when they did not have all the resources to do the 
things, they made a consortium of Federal agencies and 
delivered. It was difficult because to deal with one Federal 
agency is difficult enough, and to have the number that FEMA 
pulled together to try to help, I think it's magnificent, and 
we want to thank you.
    Mr. Lewis. Thank you, Ms. Meek.

                            Closing Remarks

    Mr. Director, let me make some closing remarks, and then I 
will yield the table to you, and we will close this. Our work, 
at least for today, is done.
    I wanted to take a special moment to express my personal 
appreciation for the very serious attention and time that you 
gave to the matter of the hospitals in the Los Angeles region 
that were so seriously damaged by that Northridge Earthquake.
    St. John's and Mount Sinai are very appreciative. USC is 
very appreciative, and indeed, UCLA is very appreciative. I 
can't tell you how much your personal attention played a role 
in bringing those items to fruitful conclusion.
    There do remain in connection with that a piece of that 
$2.6 billion outstanding, items that are very, very important 
to the major institutions who are involved, USC and UCLA, that 
relate not to the emergency circumstance, but rather one of the 
President's highest priorities, that is, the President has time 
and time again talked about the need to make sure that we have 
available the best for educational excellence that we can 
possibly develop in the country.
    These institutions reflect much of that and much of their 
educational capacity potentially could be affected by the 
results of disastrous impact upon those other parts of the 
institution. So that is kind of the next page, and I think you 
know that I do have a propensity to pay a little attention to 
these things. So I just do want you to know that it is on my 
worksheet for the year ahead, but you have been extremely 
sensitive and helpful, and the Agency has as well, and I want 
you to know that.
    We have, Director Witt, tornado damage in Arkansas before 
us, floods in Ohio and Kentucky and Indiana and Tennessee and 
West Virginia. The Ohio River, as you have heard from every 
source, is peaking, cresting at its highest point since 1994. 
We don't know what might happen in connection with any 
additional water in the region.
    Northern California is still struggling from the recent 
past. We have discussed all of those things today. I know that 
your professional staff is doing all they can to be responsive.
    As we outline that circumstance across the country, anybody 
who cares at all, especially about the people who were 
affected, but as well as institutions, clearly it makes the 
point that these problems are America's problems, and as a 
family, we do as we have in the past. We do in this Committee 
try to come together.
    It is very important that you recognize that we insist that 
these issues have--get out of the mix of some of the extreme 
debates around here, but rather see us working together 
separate from party consideration to make sure that we are 
helping those people out there who truly do have a serious 
need.
    The future will unfold in the weeks and months ahead, but 
we know for certain that the Federal Emergency Management 
Agency will not only be before us in the near future, next 
month maybe--hope not, but indeed, in the near future and 
certainly next year, and with that, not only will they be 
before us, they will be responsive as well.
    So we appreciate very much your work and appreciate your 
being with us today, and I will yield to you for any closing 
remarks you might have.
    Mr. Witt. Thank you, Mr. Chairman and members of this 
committee for your past support and your kind words today. All 
of us appreciate it very much.
    As you said, Mr. Chairman, a disaster in any State is our 
Nation's disaster, and we all work together in a bipartisan 
way, as a neighbor helping neighbor to support the effort to 
bring those people and that community back to where they should 
be and need to be to get their lives started again.
    We are facing something in the next few months that is 
going to be very difficult, not only in California, but in the 
Midwest States because they have over 200 percent snowfall 
above their normal average. In fact, I'm going to South Dakota 
Saturday to look at their snow peak. This is resulting in 
tremendous flooding potential. So we are trying to prepare to 
get ready for this.
    There are several States that are going to be involved with 
potentially serious damage. We want to be prepared and want the 
States to be prepared. We are working with them every day.
    Also, I want everyone to realize that FEMA is a small 
agency. We have a tremendous responsibility and a very 
important mission, and I am very, very happy to tell you that 
we probably have the most dedicated employees of any agency. I 
am so proud of them because they have gone through a lot over 
the last years, a lot of changes and freezes. They have stepped 
up to the plate and met those challenges that we faced.
    I just want you to know that I am extremely proud of them, 
but we thank you for your support, and we will be there.
    Mr. Lewis. Thank you, Mr. Witt.
    I must say that at the beginning stages of this Congress, 
we are hearing a lot about why aren't there more bills on the 
floor, et cetera, et cetera. I repeat often these days that I 
can't help but recall two years ago when everybody was 
screaming at us about having too much on the floor, too fast, 
but you can tell by the committee today, people coming in and 
out--I mean, our entire committee wanted to be here every 
moment, for they are very proud of the work this Agency is 
doing.
    There are meetings in the National Security Committee that 
conflict. There are meetings and hearings relative to 
immigration questions that conflict, et cetera, but you should 
know that the message that is being delivered from this side, 
without any question, is a reflection of the interest as well 
as the admiration of our entire Committee, including those who 
had some of those conflicts.
    So, with that, the committee will be adjourned until next 
Tuesday, March 11th at 10:00 a.m.
    Thank you, Mr. Director.
    [Questions for the record follow:]

[Pages 77 - 130--The official Committee record contains additional material here.]


                                           Tuesday, March 11, 1997.

             CORPORATION FOR NATIONAL AND COMMUNITY SERVICE

                                WITNESS

HARRIS WOFFORD, CHIEF EXECUTIVE OFFICER

                          Introductory Remarks

    Mr. Lewis. We'll have the meeting come to order.
    I want to welcome all of you to this hearing, especially 
Harris Wofford, my friend, who has really gone that extra mile 
to attempt to communicate with both Lou Stokes and myself about 
not only programming and how it's operating, but new ideas that 
are in the fore.
    Senator, I want you to know that Rodney Frelinghuysen is, 
by far, the most attentive on my side of the aisle, and even 
with great conflict, he seems to show up most of the time. At 
this point, the Appropriations Committee process is one of 
Members having conflicting meetings on almost every occasion, 
so this morning it is no exception, as you can tell by the 
general attendance.
    Our purpose today is to get a feel for where your agency 
would take itself under your leadership.
    In the meantime, I want to mention to all who are present 
that my colleague, Louis Stokes, is in conflict as well this 
morning. The Secretary of Education is before another committee 
that Lou tries to be in attendance at as frequently as he can, 
so we are going to go, by way of introductory remarks, by me, 
ask Lou to do the same, and then, after your remarks, we will 
go directly to Lou Stokes for questioning. Then he will have to 
leave for another committee meeting.
    We are in the process of oversight of a number of 
commissions and agencies before this subcommittee. The 
pressures within this committee are extremely difficult. I 
think most in attendance know that we are involved with such 
issues as veterans' medical care and the public housing 
programs in our bill. NASA is here, EPA is here, as well as a 
number of science related programs like the National Science 
Foundation, and all of those dollars are competing with one 
another. And there's no exception here. So we look at 
adjustments that involve increased spending with great care and 
we hope to have ongoing dialogue beyond this meeting.
    Senator, so that you know for the record, when you make 
your remarks, we urge you to summarize as best you can. Your 
entire statement will be in the record. In the meantime, 
welcome to you and to your colleagues.
    Mr. Stokes, I call upon you for any introductory remarks 
you might have.
    Mr. Stokes. Mr. Chairman, in the interest of time, I'm 
going to defer any welcoming remarks as such, other than to say 
to Senator Wofford it's always a pleasure to have him come back 
and share with us some of the work AmeriCorps is involved in. I 
have had a chance to see some of it out in my own congressional 
district, but we want to know, of course, about what's 
happening nationally. So it is a pleasure to have you here 
again, and I look forward to your presentation.
    Thank you, Mr. Chairman.
    Mr. Lewis. Thank you, Mr. Stokes.
    Senator Wofford, it is very important that we not just get 
some sense from you as to those portions of the work of 
AmeriCorps, the Corporation for National Service that has 
worked out there, but your thoughts about those elements of 
your program that do reflect an adjustment upwards in your 
budget, for that draws the greatest attention about here. As 
you know, especially on the House floor, the Members are 
somewhat intent in looking at some of those adjustments.
    Senator, please present your remarks for the record and, 
from there, we look forward to hearing from you.
    Mr. Wofford. Mr. Chairman, Congressman Stokes and 
Congressman Frelinghuysen, I am delighted to be back here. I 
understand the pressures you're under and, in some sense, I'm 
happy I'm on the other side of the table now pressing you, 
instead of being pressed. And I'm doing it in a cause, of 
course, that I believe in and want to make the case for, as 
appropriate, particularly for the America Reads initiative. I 
appreciate your interest and past support, and I look forward 
to working with you and your colleagues on this committee.

                             budget request

    Our fiscal year 1998 budget, as you know, requests $546 
million, which would support approximately 29,500 AmeriCorps 
members through the grant program, and 1,600 members in the 
National Civilian Community Corps, which is the only part of 
this which we run. The rest of it is run by local or national 
nonprofits. Our request includes $53 million also for the Learn 
and Serve America programs, and $6 million for the Points of 
Light Foundation, initiated by President Bush.
    The Points of Light Foundation is our special partner in 
initiating and helping President Clinton and President Bush to 
organize the coming Presidents', plural, Presidents' Summit for 
America's Future that's going to be chaired by General Colin 
Powell, to start at least a three-year campaign to try to turn 
the tide for children and youth through civic action and 
citizens service.

                                overview

    I want to make three points here today. First, that we 
think the record is piling up, that national service works, 
that it's a proven way to leverage volunteers and to help 
communities solve some of our most critical problems, and 
particularly problems of children and youth.
    The senior programs that are a part of our Corporation, and 
VISTA, have proven themselves by how they worked and what they 
did, and we believe that is happening with the new work of 
AmeriCorps members as Learn and Serve student volunteers.
    Second, we are committed to achieving the highest levels of 
integrity and efficiency, and have taken major steps to cut 
costs. We are also making an all out effort to develop a sound 
financial management system.
    Third--is the America Reads initiative. I certainly 
wouldn't want to be in competition with Secretary Riley, who is 
also making the case for the America Reads initiative. As I 
will explain, we are partners, though we have two separate 
tracks, each standing on its own merits and are being 
legislatively proposed differently.

                    national service accomplishments

    As you know, very few programs have received the level of 
scrutiny that AmeriCorps has in these past three years. The 
conclusion, from the evaluation reports that have been 
submitted to you over the years, including some interesting 
ones this year, is that there is a lot of evidence that has 
piled up that, through the experiences of communities across 
America--that national service is working, that it is a problem 
solver, dealing with some of our toughest problems in this 
country: literacy, education, crime, drugs, homelessness. And 
it's reflected in the quite extraordinary support from a wide 
range of governors of both parties.
    My written statement goes into some detail, with a certain 
amount of emphasis on projects that are in the districts of the 
members of this committee. But that same point could be made 
for members of any committee in Congress. The test of 
AmeriCorps and our other programs is what you find is really 
happening in your districts. I really warmly encourage members 
of this committee, and all Members of Congress, to visit 
projects in their districts. That's the one way to understand 
what is happening. It's hard to get a real sense of what 
AmeriCorps is because it's doing so many different things, but 
it has a thrust and a focus that you can only see when you meet 
the members, see what they're doing, and talk to the nonprofit 
organizations that find this people power a tremendous new 
contribution to their own work.

                     National Service in Education

    But nowhere is AmeriCorps having a greater effect than in 
education. More than half and up to two-thirds of all 
AmeriCorps members work with children and youth. They tutor, 
they teach, they mentor, run after school programs, summer 
programs. They teach drug prevention, anti-gang efforts, create 
safe havens, and they, on an increasingly large scale, are 
organizing students to serve. Here in the District of Columbia 
we have met the request of the school system, which has a 
requirement of 75 hours of community service to graduate, to 
help students to do citizenship in order to learn citizenship.
    We are offering AmeriCorps, or AmeriCorpsVISTA, service 
learning coordinators to each of the 18 high schools, to help 
make that a more effective program, to coach, consult, put the 
students into the best programs. And we're doing that in 
districts all around the country.

                            disaster relief

    From forest fires in Idaho to earthquakes in California, to 
floods all over the United States, AmeriCorps members, 
specially trained in disaster relief--a lot of that in 
partnership with the Red Cross--have moved in fast and stayed 
for the duration in 17 disasters in the last few years.
    James Lee Witt called AmeriCorps one of the country's most 
valuable programs, and he worked with us to set up a formal 
partnership in which trained service participants are on call. 
Right now, AmeriCorpsNCCC, the National Civilian Community 
Corps, teams are assisting the Red Cross in the tornado damaged 
areas of Arkansas. VISTA's senior corps of volunteers, members 
from our AmeriCorps rapid response corps, with the American Red 
Cross, are on the job in Ohio, West Virginia and Kentucky, 
working with FEMA to help flood victims.

                         Leveraging Volunteers

    A key to understanding the cost effectiveness of AmeriCorps 
is the degree to which it leverages volunteers. It recruits, it 
organizes, it leads volunteers. Because most AmeriCorps members 
serve full time every day often, as a cadre of leaders, they 
help the nonprofits multiply the number of volunteers that they 
can use effectively, and they actually recruit those 
volunteers. That's part of the case for the role of the America 
Reads initiative. An outside evaluator found that each 
AmeriCorps member recruited, trained and supervised an average 
of 12 unpaid volunteers.

                   Demographics of AmeriCorps Members

    National service provides an opportunity for Americans of 
all backgrounds to work together to get things done. It 
reflects the racial diversity of our communities. One in two 
AmeriCorps members are white. Nearly one in three is African-
American. One in six is Hispanic. In California, the Hispanic 
ratio is one in four.
    AmeriCorps is living up also to its GI Bill promise of 
expanding educational opportunity, especially to those from 
America's hard-working middle class, as a way to serve your way 
through college, instead of going either on loan to loan or 
with grants not tied to service.
    Last year about 70 percent of AmeriCorps members came from 
households with incomes of less than $40,000. So far, the 
national service trust has made more than 26,000 payments, 
totalling about $44 million to over 6,000 educational and 
lending entities.

                         Reinvented Government

    The Corporation is an example of reinvented government. It 
is locally based. I want Members to realize that more than 430 
AmeriCorps grants go to local nonprofit groups, schools, 
colleges, universities, faith-based organizations, and a 
thousand such organizations through VISTA, and the Learn and 
Serve programs. These local programs recruit, select, 
administer, and they determine what kind of service should be 
performed.
    Our programs are based on competition. Those that don't 
perform get eliminated. Since AmeriCorps began, 70 programs 
were not renewed for additional funding.
    It's built-in nonpartisan. State commissions, which make 
two-thirds of the AmeriCorps grants, are appointed by 
governors. By law, they have to be balanced with Democrats and 
Republicans. By the way, three-fifths of the governors are 
Republicans, which is part of the built-in nonpartisanship, if 
you want to call it that----
    Mr. Lewis. I beg your pardon, but you don't need to do 
that. [Laughter.]
    Mr. Wofford. The rest of the grants go to national, 
nonpartisan and nonprofit organizations, also by competition.
    It's results-driven. We, in the State commissions, require 
every program in which AmeriCorps members serve to design 
annual objectives and track the progress throughout the year.

                 Cutting Costs and Improving Efficiency

    We are cost conscious and cost effective. We have 
eliminated grants to Federal agencies which ran local community 
programs. They weren't working in a Federal department as 
bureaucrats; they were out in the field in some of the most 
grassroots field programs. But to simplify procedures and 
respond to congressional concerns, we have completely 
eliminated the Federal grant program in which Federal agencies 
developed programs for AmeriCorps members.
    We have raised the local program's match from 25 percent to 
33 percent for the programs, and many local programs go well 
beyond that. We have expanded the number of education awards 
only--an idea that Senator Grassley pressed for, and which we 
like--by which the Corporation provides the $4,725 educational 
voucher after a year of service, or half of that for half-time 
service. The nonprofits, the religious organizations, colleges 
and others, provide the rest of the cost.
    We have already approved and have in operation 2,000 of 
these assignments, including a new partnership with the Boys 
and Girls Clubs of America, to support 800 AmeriCorps members 
on those terms of only the education award. We have now 
approximately 5,000 requests for these awards.
    Since I last appeared before you, we have moved forward 
with an ambitious plan for notching down AmeriCorps' costs. We 
are reducing the average cost per member to $17,000 in the 
program year just beginning, '97-98; $16,000 in '98-99, and 
$15,000 per member in 1999-2000. That includes all our costs: 
the Corporation's share of the living allowance, the education 
award, if used, the health care plan, the other costs of 
recruitment and training, program support, and assistance to 
State commissions.

                          Financial Management

    The handling of the Corporation's financial management 
problems, that were described in my written testimony and in 
many other reports you have received in the last year, 
demonstrates our commitment to improvement and to reform. My 
top priority, shared fully by the Corporation's board of 
directors is getting our financial house in good order. Under 
the leadership of our new Chief Financial Officer, Donna 
Cunninghame, we are making steady progress toward producing 
auditable books and correcting deficiencies, some of which we 
inherited from three decades of the Action agency, whose 
systems, and problems were incorporated into the Corporation.
    Our goal is a sound financial management system that makes 
auditable financial statements a routine operation.

                             america reads

    The demonstrated success of national service in tutoring 
and literacy, and the recruiting of unpaid volunteers, is what 
led President Clinton to give national service a major role in 
the America Reads initiative. The American Reads initiative is 
to be a national campaign, locally run by local literacy 
programs and school districts, to reach the goal that every 
American child learns to read by the end of grade 3, and will 
be tested on it in grade 4, with an agreed-upon national test.
    Our '98 fiscal year budget request, with an increase of 
$146 million, targeted to the America Reads challenge, is 
funded within the President's plans for a balanced budget. A 
complete legislative program is going to be presented to 
Congress in April.
    Government won't do this. Government has a role, but it's 
going to be essentially a challenge to citizens and to local 
groups. I was in Houston when they launched the ``Houston 
Reads'' program about three weeks ago. Barbara Bush keynoted it 
and I closed it. They had an all day working session of the 
literacy groups in and around Houston. They focused on the 
target of 20,000 extra tutors for Houston to reach that goal.
    Barbara Bush commended the President on the goal, but said 
a mother's instinct made her note that six months before the 
President did, the Governor of Texas, named Bush, had said that 
the clearest and most profound goal for the State of Texas is 
that every child reads by grade 3.
    Under this plan at least one million extra volunteer tutors 
will be recruited, organized, and trained by community based 
organizations for in-school, after school, weekend programs, 
summer programs, in the empty hours, to move to give the extra 
assistance that the teachers desperately need.
    In the first place, for those one million tutors, we hope 
very much that many of our senior volunteers, under the 
jurisdiction of another committee, the RSVP program and the 
Foster Grandparents, will play a part.
    Our college and high school Learn and Serve programs are 
expected to play a part. We have proved that 11th and 12th 
graders can become very effective tutors of second graders, at 
almost no cost, and that will be one of the resources. But the 
President is asking for 11,000 new AmeriCorps members, to be 
the recruiters and the organizers of this army of one million 
tutors; a locally run army.
    America Reads is built on the track record with programs 
like the AmeriCorps for Math and Literacy in San Bernadino, 
where 18 AmeriCorps members teach reading and math to 
elementary students in an after school program for latchkey 
kids with great success. That program was studied, among others 
in a group, and found to be returning $2.60 for every dollar 
invested.

              reauthorization of the national service acts

    Let me conclude. There is the matter of reauthorization. We 
are now operating under the authority of the General Education 
Provisions Act, which will expire next October. I have met with 
Chairman Goodling and members of the House Committee on 
Education and the Work Force, to begin the formal 
reauthorization process, and we are scheduled to meet with 
their Senate counterparts shortly. I look forward to working 
with you and your colleagues to draw on our strengths and 
overcome our weaknesses, and make necessary mid-course 
corrections.

                               conclusion

    If the era of big government is over, the era of big 
citizens had better begin. I have made the case in significant 
respects that we're an example of reinventing government. I 
think an even more important case for all of us is to find the 
ways and means to reinvent and reignite citizenship, because 
our problems are mounting. They're not going away. We believe 
the programs of the Corporation can make a significant 
contribution to solving those problems and developing great 
citizens and more effective citizen action that our country 
calls for.
    Thank you.
    [The information follows:]

[Pages 138 - 231--The official Committee record contains additional material here.]


    Mr. Lewis. Thank you, Senator Wofford.
    As I indicated, I am going to call on my colleague, Lou 
Stokes, first. But before we go to that, you did introduce 
Donna Cunninghame. I meant to ask you to introduce others that 
may be appropriate as we go through with the questions, or you 
may want to do that at this point. It's your choice.
    Mr. Wofford. I'll do it as we go along.
    Mr. Lewis. All right.
    Mr. Stokes.
    Mr. Stokes. Thank you very much, Mr. Chairman. I appreciate 
you taking me out of order and permitting me to do this so that 
I can get over to the Labor HHS subcommittee.

                             america reads

    Of course, as Senator Wofford mentioned, I will be 
questioning the Secretary of Education over there, and I 
probably will talk with him extensively about the America Reads 
program. So let me start with a question or two relative to 
that program, Senator.
    As I understand the situation, included in the $549 million 
request before this subcommittee for the Corporation is $162 
million for America Reads. In addition, funding for the 
Domestic Volunteer Service Act in the Labor Health and Human 
Services bill, where I will be going in just a moment or two, 
adds another $38 million, for a total Corporation funding of 
$200 million. Is that correct?
    Mr. Wofford. Yes, sir.
    Mr. Stokes. Now, is it correct that there's another $265 
million in the Department of Education's budget, bringing the 
Government-wide America Reads initiative to nearly half a 
billion dollars?
    Mr. Wofford. Yes. I believe that's accurate.
    Mr. Stokes. Let me just play devil's advocate here for a 
moment. And I certainly applaud the President's goal of 
teaching every child to read by grade 3. Obviously, there is a 
great need for a program of this sort because we have young 
people graduating from high school in some parts of the country 
who cannot read the diploma that they're given on stage.
    I'm wondering, however, if we're now spending billions upon 
billions of dollars, the local, State and Federal Government, 
and we have not been able to produce students who can read 
well, tell me how this program is going to change that.
    Mr. Wofford. Well, Congressman Stokes, we got to the moon, 
which people had dreamed of for years, because a President set 
a goal and a commitment that the Nation accepted, that we were 
going to find the ways and means to get to the moon. And we 
cracked the physical atom with a commitment getting the atom 
cracked and beat Hitler.
    I think the goal of seeing that every American reads by 
grade 3 is in the same category. There is plenty of evidence--
every educator I have talked to says that the child that comes 
out of grade 3 functionally illiterate--that the odds are 
overwhelmingly against that child succeeding. The odds are that 
that child is heading into disaster, of not being able to get a 
good job, heading into unemployment, the streets, crime and 
welfare, and early death.
    Setting the goal itself is important. If you set it, then 
how do you do it? A lot of people worked to develop the 
estimate that you need one million extra tutors. Houston went 
into the study and came up with the first goal of 20,000 
extras; Waco, TX, one thousand. The Governor of California 
estimates they need 250,000 mentors working with young children 
and set the goal for that.
    The educational organizations and teachers I know say that 
when 40 percent of the fourth graders are so far behind their 
reading level that they're going to be a burden on not only 
themselves but others in the class, we have a real crisis.
    The one million tutors are going to be used by programs 
that really work. There will also be some new programs started. 
We already know how San Francisco State has developed a whole 
new program, to use college work study students from that 
campus in connection with the school district for this America 
Reads goal. We have 81 college and university presidents on a 
group that is trying to get 100,000 college work study 
students, approximately 10 hours a week, to be the extra tutors 
that we need.
    The AmeriCorps participation in this is to help organize, 
community by community, working with local nonprofit literacy 
programs and school districts, those extra tutors, and help to 
effectively utilize them when they're there. As you look at it 
in both committees, the Education Department's contribution to 
this is going to be very important. It has several facets to 
it, largest of which is to provide additional reading 
specialists to the literacy programs around the country. In 
order to use the extra tutors you have got to have a cadre of 
reading specialists that know how to train them expertly--we'll 
have some AmeriCorps members that can do that. But the reading 
specialist is, I think, the major contribution of the Education 
Department's funds.
    Mr. Stokes. In light of the fact that you put this 
increased emphasis on this area of your budget, that one out of 
three of your dollars is going for the America Reads program, 
are you restricting any other parts of your budget that was 
funded in the past?
    Mr. Wofford. I think one out of four of our dollars, if we 
got the extra $200 million through both committees, would be 
for America Reads. We've got several thousand AmeriCorps 
members today that are in literacy programs. A great many of 
them are working with elementary school children.
    A year before this we set Children and Youth and such 
programs as a high priority of the Corporation. We expect right 
now that our programs through the State commissions are going 
to produce this very year, before any new funds come, an 
increasing number of AmeriCorps members in reading programs 
around the country. Many, many cities have already launched 
these.
    All of the new money--and it's not shifting other 
resources--would be in the America Reads initiative.

                 legislative proposals to america reads

    Mr. Stokes. Senator, how about your legislative proposals 
relative to America Reads. When do you anticipate that will be 
submitted to the Congress?
    Mr. Wofford. I believe by the end of this month a bill will 
be coming up to Congress. We're all working very hard on it.
    Mr. Stoke. One other question, and then I will submit the 
balance of my questions for the record.
    Mr. Lewis. Fine, Mr. Stokes.

                          diversity in program

    Mr. Stokes. Senator, you mentioned in your presentation 
this morning, with a great deal of emphasis, your concern 
relative to diversity within your programs. I certainly applaud 
you for the emphasis you demonstrated on it.
    One of my concerns, however, with this Corporation, as I 
have with other agencies of our government, is how we reflect 
diversity at the top of that agency. As I look here this 
morning with the group that accompanies you, I don't see any 
African-American females, I don't see any Hispanics. I see two 
African-American males.
    How do you reflect this diversity at the top of this 
Corporation?
    Mr. Wofford. Well, the head of AmeriCorps's main grant 
program is meeting out in Kansas City today. She is Hispanic, 
Latina. I believe Diana Algra is in Kansas City today to meet 
with all the chairs of our State commissions.
    I saw Fred Peters behind me. He is not an African-American 
woman, but----
    [Laughter.]
     Mr. Wofford. He is a distinguished retired Army officer, 
who has played a major role in shaping the National Civilian 
Community Corps, which is the one program we run.
    General Andrew Chambers has been appointed to head the 
NCCC. Knowing your interest, I have a list for you of where we 
stand on this. I'm not satisfied with it, but I think at least 
one major appointment about to be made will please you.
    Mr. Stokes. Thank you, Mr. Chairman.
    Mr. Lewis. Thank you, Mr. Stokes.
    My colleague, Mr. Stokes, and I are very much together and 
concerned about this issue, and our objective is to have our 
commissions and our agencies reflect very much the mix of 
America.
    Also, within constituencies there are constituencies, and I 
note with great interest that it is very obvious that two 
groups have impacted Mr. Stokes. The African-American females 
are obviously communicating a bit directly with him, and also 
Lucille Roybal-Allard is having some impact on me, which is 
very healthy in and of itself.
    We are making progress in most of our agencies, and we look 
forward to--we will get into a lot more specifics in terms of 
questions for the record, about percentages, et cetera, and 
what is actually happening out there.
    Mr. Stokes. Could we put this in the record, Mr. Chairman?
    Mr. Lewis. Sure.
    Mr. Stokes. Let me thank you again, Mr. Chairman, for the 
courtesy extended to me. I appreciate it.
    Mr. Lewis. Thank you, Mr. Stokes.
    Mr. Wofford. I thank you for your continued interest in 
that. We all need fire held to our feet.
    Mr. Stokes. I hope you continue working on that. This 
agency ought to be a model for the other agencies, not an 
agency where I even have to raise this question. It's 
embarrassing to even have to talk to an agency of this sort 
about an issue of this type.
    Mr. Wofford. I agree.
    Mr. Lewis. Mr. Stokes, I might mention we are scheduled to 
have the Corporation for National Service with us until noon, 
and we had scheduled a couple of hours this afternoon. I'm not 
sure--depending on the participation here--whether we will go 
into the afternoon session or not. So we will be communicating 
with you. We could get our work done by noon is what I'm 
suggesting. If that's the case, we will submit questions for 
the record for other members who weren't able to attend.
    Mr. Stokes. Thank you very much, Mr. Chairman. Thank you, 
Senator.

                             budget request

    Mr. Lewis. Senator Wofford, the Corporation for National 
Service is requesting $549 million, roughly a little more than 
a two million differential from what you said for the record, 
and I believe that reflects the IG's----
    Mr. Wofford. The Inspector General, $2.5 million.
    Mr. Lewis. Correct. So it's $549 million, and 212 FTEs for 
fiscal year 1998, an increase of $146,500,000. That is, in the 
world of our whole bit of work, not a lot of money, but it is a 
36 percent increase in this agency.
    You may recall that in the rescission process in 1995, 
looking at national service, we in this committee decided that 
we could not be responsive to the President's request for 
additional funding, which was considerable, because the program 
did not have a comprehensive evaluation and we thought we 
should see some of that before we went forward. Frankly, we 
were being gentle in connection with that and little did we 
know that we would find ourselves on the floor, where we had 
made some adjustments in veterans' programs--an amendment came 
to us on the floor that just kind of swapped the increase with 
available moneys for national service, replacing those programs 
for veterans. So the competition in this subcommittee is very 
real, and we have got to be realistic about where we might end 
up in this process.
    There is a long time between now and conference, so we will 
have ongoing discussions. But I just wanted to remind all of us 
for the record that there is a long process here, not just a 
single step.
    Mr. Wofford. Mr. Chairman, being aware of that, I just want 
to reemphasize that the case for an expansion this year stands 
or falls on the America Reads initiative, and whether Congress 
and the country joins the President in a commitment to that 
goal and to that program.
    Mr. Lewis. We'll get to that in some depth in my 
questioning.
    Beyond that increase, in addition, $260,300,000 and 362 
FTEs are requested for the Corporation in the Labor HHS bill. 
Now, this brings the total 1998 request for the Corporation to 
$809,300,000, and 574 FTEs.
    The new thrust for the Corporation, as we have already 
begun to discuss, in 1998 is the America Reads challenge, a 
national effort to build a citizen army of one million 
volunteer tutors to make sure every child can read well and 
independently by the end of the third grade.
    Let's take a few moments and talk about that portion of 
your legislative proposal. Your statement indicates that this 
legislation for this initiative will be sent to Congress later 
this month.

                 legislative authority on america reads

    Briefly explain what additional legislative authority is 
required for the Corporation and the Department of Education to 
implement this proposed program.
    Mr. Wofford. On our side, the authority to engage 
AmeriCorps members in elementary literacy programs is not only 
there but it's been one of our priorities for some time. The 
reason we think we are ready for that expansion, is that 
AmeriCorps members can do it, have been doing it successfully.
    We don't need an authorization. We need appropriations to 
expand our work in literacy. The Department of Education has a 
different procedural and legislative situation. I think they do 
need authority for certain things.
    Mr. Lewis. You would be running this program, and I know 
the Department might want to style a special approach. But I'm 
curious about this question.
    Why is the Department of Education's part of the initiative 
being proposed as mandatory, as opposed to discretionary? This 
is really a discretionary-type program.
    Mr. Wofford. We are asking for discretionary funds under 
our budget.
    Mr. Lewis. Why is the Department doing the other?
    Mr. Wofford. It did not seem to be feasible for us to, 
granted the situation you just described, to be proposing that 
it be on the mandatory track, because it's fitting directly 
into things we're already doing.
    We will be playing the lead role in figuring out how to get 
the extra 11,000 AmeriCorps members, but the bill that will be 
coming up will propose a State structure, in which there is a 
joint process between the State Department of Education and the 
State Commission on National Service. It's a joint education/
corporation effort at the Federal level to plan how to do this. 
We are working very closely with them.
    The leading specialists are very vital to the program. If 
the Education Department is not able to offer funds to State 
and local literacy programs, to add those reading specialists, 
it will greatly hamper the chance of making this the kind of 
success it could be. It would mean that all those local 
programs have to somehow, assemble and pay for the reading 
specialists.
    If we want to jump start this, we have got to do the two 
things that are being asked, the reading specialist and some 
other steps that the Education Department is prepared to take, 
and the extra AmeriCorps members.
    Mr. Lewis. It strikes me that if they got the funding, that 
they could do it on a voluntary or discretionary basis, if they 
did. Labor HHS is the other subcommittee, like my own, that is 
under the greatest pressure in their whole panoply of 
responsibilities, in terms of discretionary moneys. So new 
moneys necessarily have to be looked at very carefully.
    I am sure over there they will ask you the same question. 
At least it's my intention to suggest to John that he take a 
hard look at that question.

           department of education funding for america reads

    Let's look at the other side of the coin. Why did the 
administration not request all the funds for America Reads 
under the Department of Education, especially if the education 
part is to be authorized and scored as mandatory?
    Mr. Wofford. Mr. Chairman, I was giving a full tribute to 
the importance of the role the Education Department will play 
in this. If you talk to the people who are on the ground 
organizing, they very, very much want a key leading part of 
that to be an expansion of AmeriCorps members serving in their 
literacy programs they already have. That's what we're in the 
business of doing.
    If we are to try to be the organizers of one million 
volunteer tutors, including many from our own programs--the 
senior programs, the college and high school service learning 
programs--it would be most natural that we would be the ones to 
lead that effort.
    Mr. Lewis. I suggested that we're looking at the other side 
of the coin when we're talking about Education doing this job. 
The back side of the coin would be AmeriCorps has volunteers 
who presumably are talented and educated people, who could be 
trained pretty quickly, in terms of reading skills.
    It is clear that the established education system isn't 
doing it, according to this quest for a new program, so why not 
AmeriCorps? They say we ought to be doing it, and forget about 
the Department of Education.

                        service learning program

    Mr. Wofford. I want you to know that there are pilot 
programs that are ready to do what a pilot ought to do, which 
is ignite a furnace. There are 11th and 12th graders in 20 
Philadelphia schools who now for three years, through our 
Service Learning program have provided some reading specialists 
to train the teachers of 11th and 12th grade students on how to 
train their students to be tutors of second grade students. The 
11th and 12th grade teachers themselves need an initial 
training on how you train people to be tutors of second 
graders, because it's not their field.
    But those teachers say it has had an enormous effect on how 
those 11th and 12th graders--many of them at-risk kids in 
Philadelphia--have raised their own reading levels by two and 
three grades by being tutors of second graders, three 
afternoons a week for two hours, one on one.
    The teachers I have talked to say that kind of 
individualized attention to the most at-risk kids in their 
class, who just not making is saving their own classes, so they 
can go forward with the students who can make it. It is turning 
around many of those second graders who love those 11th and 
12th grade kids that are tutoring them in the empty hours, 
where they would be the latchkey kids. It works. It costs very 
little.
    I see the America Reads initiative as spreading things like 
that. We're going to contribute to the initiative all the 
programs we know that work and ought to be spread. Together, 
with the reading specialists, I think we can, in short order, 
in collaboration with the local programs, have something that 
moves us towards achieving that goal.
    Mr. Lewis. Thank you for that.
    Let's look at different authorization and funding scenarios 
for just a moment.

                       with no education funding

    What happens if the Education part is not authorized? Would 
it make much sense to fund the Corporation's part of the 
proposal--i.e., finding the volunteer tutors--if there were no 
Education funding for reading specialists and materials to 
train those tutors?
    Mr. Wofford. Well, if I haven't already, I want to make 
clear that I think the joint venture, the joint initiative and 
the joint plans, make tremendous sense. I have confidence that 
what is----
    Mr. Lewis. You've made that clear. It's the ``what if'' 
that is----
    Mr. Wofford. ``What if'', I already said that----
    Mr. Lewis. You know the odds are pretty good that that 
could be where we end up.
    Mr. Wofford. Local programs will be greatly hampered in 
moving as fast as they want to move. That Houston Reads 
initiative is very much hoping they will get some reading 
specialists through that part of the plan. However, if the 
Education part is not funded we are ready and able for a major 
expansion of AmeriCorps to help--achieve the goal.
    I think there are 20 cities that have declared the goal, 
Boston Reads, Baltimore Reads, Houston. I have been, I think, 
in a dozen of the cities that are launching plans to achieve 
these goals. It's not just President Clinton pulling this out 
of the air. Thank god, I would say, that he has helped the 
Nation see that this is a goal we ought to commit ourselves to.
    It has percolated up from education and the school 
districts and their problems. We're ready to expand in that 
area. It's an area that we proved we can work in.
    Mr. Lewis. Senator, some of our other agencies have been 
very responsive to their participation in this commitment that 
is now the President's commitment. It's the commitment of both 
Houses and both parties to move towards balancing our budget 
between now and 2002.
    I mention NASA just because they've been very, very 
responsive. By attrition, they have reduced thousands of jobs, 
and at the same time, by applying business principles to their 
operation, they have been able to move forward, in many ways 
more effectively than before.
    Indeed, they recognize there are very difficult and tight 
circumstances, and they brought to us a number of reprogramming 
requests.
    Presuming that you reevaluated a lot of your programming, 
and know that some of it has worked very well, and probably 
some of it hasn't worked at all--you know, reapplying dollars 
is very much a part of this process.
    So, if the Corporation's part of the program were funded, 
but additional authorizing legislation is not enacted, how 
would the operation of the program differ from what is being 
proposed? As I understand it, the proposed legislation would 
set up two pots of money for AmeriCorps grants--one for America 
Reads and one for the regular program that you have been 
running, correct?

                  state commission on national service

    Mr. Wofford. Yes. The joint venture at the State level will 
use our delivery system, which is the State Commissions on 
National Service that make the AmeriCorps grants, appointed by 
governors. We are meeting with the chairs of all those State 
commissions in Kansas City this very day and tomorrow.
    Those State commissions would work with the State education 
agencies in those States, The State education agencies are 
already represented on our State commissions, by statute. The 
partnership is already there.
    It is true that instead of just the State commission making 
the grant decisions, the grant decisions would be made jointly. 
I anticipate that when you get actually to the partnership at 
the State level, there will be the division of labor that you 
see between the Department and our Corporation here. The 
reading specialists will go through the Education Department.
    The structure that will emerge will be that the State 
Education Department representatives will look to the State 
Commission for the major part in how they would do the grants 
for the AmeriCorps members.
    Mr. Lewis. We're still, though, in the ``what if'' 
business, because looking out there, I have to at least 
conclude that, until the bill gets through both bodies, in an 
area where we're talking about a mandatory program that's 
likely to expand over time, I can see a very critical eye 
looking at that, even though it's not our responsibility.
    What happens if there is no legislation? Does the 
Corporation have authority to separate out funds for a separate 
America Reads program, or would any additional funds just go 
toward the regular program? Do you have the authority?

                state commissions and literacy programs

    Mr. Wofford. I believe we would have the authority. I know 
we have the authority to say that the Reads initiative would be 
our top priority for any new money going to the State 
commissions. Then it would be up to the State commissions to 
decide which literacy programs would get those AmeriCorps 
members.
    Mr. Lewis. Absent additional authorizing legislation, and 
an increase in the Corporations 1998 appropriation, would you 
try to operate an America Reads program out of whatever funding 
level the Corporation was provided?
    Mr. Wofford. Part of the problem for AmeriCorps and the 
National Service Corporation is that, by and large, with the 
exception of the National Civilian Community Corps, which we do 
run, we don't run these programs. I had to change our language 
in which--and I see there's a little residue of it still in my 
written testimony--in which we talk about AmeriCorps programs. 
It's been misleading to Congress and the public.

                           americorps program

    There are Habitat programs using AmeriCorps. There is the 
Texas Literacy Corps using AmeriCorps members. AmeriCorps 
members serve in those programs.
    We don't intend to run an America Reads program anywhere. 
We intend to supply AmeriCorps members to local or State 
literacy America Reads programs that are formed by school 
districts or colleges and universities, or programs just 
focused on literacy, which we already have many. They are using 
AmeriCorps members in literacy programs, including adult 
illiteracy programs and family illiteracy programs.
    Mr. Lewis. I'm concerned about my taking more time in 
asking questions, even though I have a series I would like to 
get to.
    Normally in the first round we call upon our colleagues in 
the order in which they have arrived and go from there. So, it 
is my pleasure to call on my colleague, Rodney Frelinghuysen, 
for some questions.

                 funding under department of education

    Mr. Frelinghuysen. Thank you, Mr. Chairman. I would like to 
follow up on the question that the Chair asked earlier relative 
to why the Administration did not request all the funds for 
America Reads under the Department of Education. What is your 
understanding as to why DOE did not?
    Mr. Wofford. Well, if in fact, as the planners both locally 
and nationally seem to agree and I believe, the extra volunteer 
tutors are needed, and AmeriCorps members are a vital parts of 
that organizing of those million volunteer tutors.
    I do not know that it makes sense to take programs that we 
administer, and our state commissions run, and say now they are 
going to be run by the state departments of education. Because 
it is not going to be run by the federal Department of 
Education. It is a state or local program, and we are in the 
business of doing it right now on a very large scale in 
proportion to our number of 25,000 AmeriCorps members.
    The largest group of people supported by the Federal 
Government that are working right now with elementary kids that 
are in this case very distressed or have major disabilities are 
our Foster Grandparents.
    We have ties to the colleges and universities through our 
college and university service learning programs, to their 
volunteer programs. And the America Reads plan assumes 100,000 
college work-study students would be assigned to local 
programs, using money already existing.
    The places where the work-study students non-paid 
volunteers best used, have been best used is where AmeriCorps 
members are able to help organize the college volunteer efforts 
in a focused way. Why would it make sense to have another 
department, which is not in the business of doing any of those 
things, administering them?

                 broader expansion into literacy issue

    Mr. Frelinghuysen. But everyone will agree that literacy is 
critical, that we have far too many children and adults that 
are illiterate. It would seem to me that it would be entirely 
within the purview of the Department of Education, as a matter 
of national policy, to be structuring programs to address it. 
And I would assume that they probably have a multitude of 
programs already that address these issues.
    I think it is a wonderful national goal. I have a lot of 
town meetings, and I often ask people what they think of 
various agencies, how they work. If people even know you 
exist--and in some cases there are people who give you very 
high marks--they have a real question about why you are having 
a broader expansion into this literacy issue.
    Many of them tell me--my citizens and their teachers who 
appear at these town meetings--that the Department of Education 
ought to be doing these things.
    Mr. Wofford. You start with the reasonable assumption that 
the Department of Education is doing them. America Reads will 
stand or fall on how a local community, a local school 
district, a local set of literacy programs, figures out how to 
do it. Neither the Education Department nor we run those 
programs.
    I suppose the most direct federal participation is in 
Headstart, the expansion of which is pertinent to achieving the 
goal of everybody reading by grade three. It may not be true in 
your district or in your experience, but in many, many of the 
communities that are already moving to achieve the goal of 
getting young people to read by grade three, they are turning 
to the AmeriCorps members. And these will presumably be in most 
cases either college graduates, or have some college.

                         existing school system

    Mr. Frelinghuysen. Well, you know, I know the players. Most 
of us in this room have served in local government. I was a 
chairman of the RSVP group in my county for 12 years. I have 
had a good relationship with Headstart.
    And it seems to me that while AmeriCorps may have a good 
track record in some ways, you are sort of--not you, but the 
Administration is basically sort of superimposing on an already 
highly bureaucratic structure a whole new initiative, with very 
admirable national goals, which are to address illiteracy for 
both children and adults, but most particularly for children.
    And many of my constituents and many members that I talk to 
on both sides of the aisle say, ``Well, what does it say about 
our existing school system? Is it not working?'' I mean, those 
who are most qualified to teach reading and the basics, is that 
not why they are employed by our various school districts? What 
is your general feeling about those who raise this issue? I 
think it is the critical issue.
    Mr. Wofford. Well, my experience is that there are no more 
ardent champions of finding the way to get the extra volunteer 
tutors who are trained and dedicated and will work in a 
sustained fashion--not just hit-and-run, come-and-go--than 
teachers.
    I have been in 30 states visiting our programs. Close to 
two-thirds of our programs are in education. A high proportion 
are dealing with after-school tutoring and literacy programs, 
Saturday programs, evening programs.
    Every teacher I have talked to that is faced with the 
reading challenge says that a high proportion of his or her 
classes in the most challenged schools have students that 
cannot be coped with in the class. Or if they coped with them, 
they could not take the rest of the class on, because they come 
into the third grade or the second grade basically illiterate. 
And those teachers desperately need people who will work one-
on-one in individualized attention.
    All the studies show that the breakthroughs for the kids, 
at risk for the disaster of illiteracy--functional illiteracy 
for most of their lives--come from the extra attention; One 
thing that can be added to what the school systems, and 
particularly the most challenged schools, are facing is this 
leadership in the non-school hours. It may take place in 
school. It may take place in boys' and girls' clubs or in 
``Ys''.
    Mr. Frelinghuysen. But in reality, a lot of these programs 
already exist. Some of your volunteers, your paid volunteers 
and others, are involved in these programs already. So you are 
basically adding to an already existing system? I mean, there 
are after-school programs, there are Headstart programs, in 
most congressional districts around the nation. And I think we 
all agree that those are critical programs.
    Some teachers may say, ``Well, you give us the resources. 
We can provide a higher level of teaching that relates to 
giving children the appreciation of reading.''
    Mr. Wofford. I am sure many teachers would like a lower 
student-teacher ratio and help in bringing that about. But I 
have not found any teacher in a year-and-a-half visiting our 
education programs, who, does not say that the one-on-one 
assistance they are getting both actually during the school day 
and after the school day in the non-school hours, is of 
enormous assistance.
    You and I may differ in the degree to which we think there 
is a crisis here. If 40 percent of the--

                     skills of work-study students

    Mr. Frelinghuysen. No, I do not think we disagree on that. 
I think there is a national crisis, and I do think in some way 
it reflects very negatively on the existing system. I think 
there is an absolute national crisis. It may have something to 
do with either a lack of parents, or two parents, or the 
imposition of television in our everyday lives.
    You know, I think it is a worthy national goal. I have some 
questions as to whether you ought to be in the forefront of it, 
versus the Department of Education. And I do worry about the 
whole notion of training a cadre of people. I mean, the most 
highly-skilled workforce relative to literacy is already 
employed by most school boards. You are talking about bringing 
in work-study students in colleges.
    I mean, what are their skills, and how would they measure 
up against those men and women who have devoted their lives to 
these very goals and objectives?
    Mr. Wofford. Well, my loss of words is related to the 
overwhelming feeling that, however good all the programs are 
that now exist, they are tremendously inadequate to meet this 
problem.
    The work-study students are key to this. The aim for half 
of the new work-study jobs that Congress appropriated October 
1st that goes into effect in July--The President has asked and 
has the backing of the American Council on Education and most 
of the major educational organizations, and 81 college and 
university presidents are actively recruiting their fellow 
colleges and universities to get half of those 200,000 new 
work-study assignments, which average about ten hours a week, 
is that they will be placed in slots to support the reading 
initiative, initiatives of local communities.
    Almost everyone agrees that if you could get--instead of 
volunteers that may come or not come for these after-school 
programs--a committed ten-hour-a-week work-study student who is 
working his way through college and have that student trained, 
you would have a great resource.
    I am talking about all the good programs that you are 
referring to that want to be able to build up to a bigger 
scale. And we have been in the business of showing how it can 
be done. At George Washington University right now here in 
Washington there are full-time AmeriCorps members who are 
helping to organize the part-time students of George Washington 
University to work in the District's school system as tutors. 
And it works.
    Mr. Frelinghuysen. All right. Thank you, Mr. Chairman.
    Mr. Lewis. Thank you, Mr. Frelinghuysen.
    Mr. Knollenberg?
    Mr. Knollenberg. Yes. Mr. Chairman, thank you.
    And Senator, welcome. I wanted to first thank you again for 
coming by last week and giving myself and my staff some of your 
personal time on this thing. We have talked, as you know, a 
number of times. And we had a connection with former Governor 
Romney, and prior to his death he in fact met with you a day or 
two before, and he met with me I think a day or two before. So 
we have that commonality of experience.
    I think the questions that my colleagues raised about 
whether this should be your thrust are legitimate questions. It 
is not a reflection on you individually, but it is a question 
about, are we creating something here that in fact goes beyond 
what we really should? Should we be utilizing some existing 
structure, rather than bringing on a new role for you and your 
operation?

                          americorps structure

    Let me ask some basic questions so I understand the 
AmeriCorps structure, and as an individual how I would, for 
example, get into AmeriCorps. I want to ask you, how many 
individuals now are serving in AmeriCorps?
    Mr. Wofford. About 24,000, 25,000.
    Mr. Knollenberg. How much do these people make? We have 
heard I know some questions or some statements about that. I 
know the GAO estimates the number is higher. I think some of 
our colleagues feel it is in the range of 25,000, 26,000, 
27,000. What is the actual amount per individual that it does 
cost?
    Mr. Wofford. Those are two important different questions: 
How much do the AmeriCorps members get, what do they get, and 
what does the whole program cost?
    Mr. Knollenberg. Right.
    Mr. Wofford. The AmeriCorps members, with a few 
exceptions--And Congress permits a professional corps in which 
we have a teacher corps of about 800 members. We do not pay 
their stipends, but the school systems pay. And they get more 
than the standard.
    Mr. Knollenberg. So you have two levels? This is what you 
are saying?
    Mr. Wofford. Well, Congress had one provision for a 
professional corps. Actually, our own costs are less for that 
program because the school systems, the Alliance for Catholic 
Education, for example----
    Mr. Knollenberg. Yes, what level is that on? Cost, I am 
talking about.

                       volunteer allowance level

    Mr. Wofford. There could be different levels for the 
professional teachers' programs, depending on what the school 
system or a university wants to pay as a stipend. No program 
can by law pay more than $15,000 to a corps member, but almost 
no corps member gets paid $15,000.
    The standard for 95 percent is the Vista poverty-level 
allowance. It has been $7,600. Now next year they will get a 
little over $8,000, $160 a week. They then get a health care 
plan for about $1,000, if they do not already have one.
    Mr. Knollenberg. About $1,000?
    Mr. Wofford. About $1,000, if they do not have one. And 
then they get, after a year of full-time service, a voucher for 
$4,725.
    Mr. Knollenberg. What is the average age of these members?
    Mr. Wofford. I think, rather than average age, in my 
written testimony there is----
    Mr. Knollenberg. Well, take out of that picture now--You 
have talked about the more professional category. I am talking 
about the non-teacher element. That is what I am really after.
    Mr. Wofford. There is 26 percent under 21; 53 percent, 22 
to 29.
    Mr. Knollenberg. So they are in that very category?
    Mr. Wofford. In the written testimony, are charts. And of 
educational attainment, 8 percent have less than high school; 8 
percent have graduate degrees; 20 percent have high-school 
diplomas but have not gone to college.
    Mr. Knollenberg. Twenty percent?
    Mr. Wofford. Twenty percent. Thirty-six percent either have 
a two-year degree or some college. And 28 percent graduated 
from college.
    Mr. Knollenberg. Let me ask you this question, now.
    Mr. Wofford. So 72 percent have had some college.
    Mr. Knollenberg. You know, when we talked on Thursday, I 
gave an example of a charitable organization that had better 
results with unpaid volunteers than with those from AmeriCorps 
who are paid. And I believe your response was that, in your 
opinion--and you used the word ``leverage,'' I think--that in 
your opinion, with those involved in the AmeriCorps system, the 
best use of those people was to use them as levers to get to 
others.

                       role of tutors to teachers

    Now, here is my question. With respect to the Reads 
Program, it almost seems to me like--and tell me if I am 
wrong--we are using kids to teach teachers. Is that right?
    Mr. Wofford. No. You said to tell you if you were wrong.
    Mr. Knollenberg. Fine.
    Mr. Wofford. I respectfully submit that you are wrong.
    Mr. Knollenberg. Okay. Then let me just clarify one thing. 
The AmeriCorps members are the ones that do the teaching to the 
tutors; is that not true? Explain it.
    Mr. Wofford. Some might do that, but by and large that is 
not the assumption for the AmeriCorps members.
    Mr. Knollenberg. Your kids have to be taught, too. The 
AmeriCorps members have to be taught, in order to be able to 
teach the teachers, I would think.
    Mr. Wofford. I am assuming that a great proportion of the 
AmeriCorps members who are recruited by local programs, college 
and university or literacy programs, will be either some 
college or college graduates. They may do some tutoring 
themselves, but their assignment is to be the organizers for 
the volunteer tutors. That means helping to recruit them, 
helping to be ready.
    One of the greatest problems schools have when volunteers 
come into the schools is to know how to use them. Some of the 
best programs we have are right in schools and they are 
organized with teachers' help but with AmeriCorps members 
running the after-school math or literacy programs.
    Mr. Knollenberg. So the AmeriCorps members do not really do 
the heart of the program during the day? It is after hours? Is 
that the idea?
    Mr. Wofford. No, in many, many cases the AmeriCorps members 
we now have are actually running programs in-school for one-to-
one attention during school hours for kids that cannot cope in 
class. But the main thrust is the after-school hours.
    But the proposal for America Reads is that the additional 
AmeriCorps members would be the organizers, the recruiters, the 
leaders, the cadre that would locally--not at some national 
level--operate these things.
    But your colleague, George Romney, had a thesis which is 
responsive to your first concern.
    Mr. Knollenberg. He was very, very much in the direction of 
the volunteer. It was not the paid volunteer, though. You will 
agree with that?
    Mr. Wofford. No, no, I once again respectfully disagree. 
When I got appointed to this, the first call I got was from 
George Romney, who said, ``But I want to make sure that we work 
together on what I believe is the twin engine that can crack 
the atom of civic power,'' he said. ``The twin engine of 
unpaid, occasional, large-scale volunteering and full-time 
national service.''
    And he said, ``I am going to come down every week,'' and he 
did it for three weeks to see colleagues on my side of the 
aisle, to convince them that you needed full-time national 
service in order to get millions of unpaid volunteers. Unpaid 
volunteers without infrastructure----
    Mr. Knollenberg. I know. We talked about that. Let me go 
into a couple of things, though, because as much as I believe 
in his orientation to volunteerism--and I think yours is, too--
we are not trying to create, though, a bureaucracy here, 
another level of government that enlarges. You know, this 
budget went up some $200 million this time over the last time.
    Let me ask you, we had in here last week, I think it was, 
or two weeks ago, somebody from the Selective Service 
Administration. They were testifying. They mentioned that you 
have an agreement with them to promote AmeriCorps. How does 
that work?

                      selective service agreement

    Mr. Wofford. Well, it is a very simple agreement.
    Mr. Knollenberg. Well, what do they say? What do they do? 
How do they promote it?
    Mr. Wofford. Oh, I wish I had it with you. As far as I 
know, it is essentially one thing, which is a card.
    Mr. Knollenberg. Making them aware? Is that it?
    Mr. Wofford. They send out a little card to every 
registrant in Selective Service in this country. And they have 
added to the card a little box that says, ``Are you interested 
in volunteering in national service?''
    Mr. Knollenberg. I see.
    Mr. Wofford. And one check. Here is the card.
    Mr. Knollenberg. So it is just one question? That is the 
promotion?
    Mr. Wofford. This is what it says. It says, ``Serve 
America. Find out how you can serve your country right now, 
U.S. Armed Forces. For information on U.S. Armed Forces, visit 
your local recruiter, or call 1-800--'' etcetera. ``AmeriCorps: 
Want to make a difference in America's communities? You can do 
civilian service through AmeriCorps. Call 1-800--''
    Mr. Knollenberg. Would you provide that for the record?
    Mr. Lewis. We do have it in our record.
    Mr. Knollenberg. You have it in the record?
    Mr. Lewis. In case you need it in supply, we do have it. 
[Laughter]
    Mr. Wofford. I'll keep it in my pocket.

                            auditing process

    Mr. Knollenberg. Let me go on to another question. And you 
and I discussed this the other day. It has to do with the 
auditing process. I know that the answer that you gave me was 
pretty much along the line that the auditing has been 
challenged, GAO has challenged it, and certainly there is a 
letter that I have here that was produced subsequent to our 
conversation, that has to do with the auditing troubles that 
continue at AmeriCorps.
    And as much as I know you said that some agencies do not or 
have not produced a record, either, that is auditable, I do not 
know that that is entirely excusable, because a lot of agencies 
have, and they continue to do so.
    This letter of yesterday--and I am sure you have seen it--
goes on to talk about----
    Mr. Wofford. From whom, sir?
    Mr. Knollenberg. From the IG, and this is dated March 10. 
It says, ``Yesterday, the inspector general of the Corporation 
for National Service released another in a series of troubling 
reports about the financial conditions of the President's 
premier program, AmeriCorps. This time, Peat-Marwick found that 
CNS had failed to maintain adequate management controls and 
records.''
    So the internal record keeping or record structure 
apparently was not there for them to produce anything but a 
negative or a challenging statement.
    Mr. Wofford. Mr. Knollenberg, just for the record, that is 
not a letter from our Inspector General, I believe; is it?
    Mr. Knollenberg. Luise Jordan.
    Mr. Wofford. The letter is?
    Mr. Knollenberg. Inspector General. You have to look at it.
    Mr. Wofford. What you read is from her letter?
    Mr. Knollenberg. This was sent to you from her.
    Mr. Wofford. Not what you read, though.
    Mr. Knollenberg. I read exactly what I read.
    Mr. Wofford. You read Peat----
    Mr. Knollenberg. It is right here in the first paragraph. I 
will read it for you again. I can take it out of the first 
paragraph. It says that, ``The corporations internal records 
were not adequate to ensure complete and accurate financial 
statements.'' It says it plainly.
    Mr. Wofford. That is accurate.
    Mr. Knollenberg. Yes, I did use the top, but the frank fact 
is that it was pulled out of the first paragraph. So I just 
think that it is something that should be mentioned. And, yes, 
there are agencies that do not produce auditable records, but 
they should. And most of them do.
    And so, as you head into a program of expansion, there 
ought to be some real analysis and assessment of what has taken 
place previously. And the organization has only been there a 
short time, I know, but we should have, I think, more accurate 
information to reflect from so that we can draw some 
conclusions about the adequacy of this new program, the new 
add-on, the Reads program. No one would question, as my 
colleagues have not, the adequacy of that situation.
    But I do think that there ought to be a movement in the 
direction of providing, let us say, a little more information, 
so that the internal records are updated and made available so 
that we can read them and reflect upon them in some meaningful 
way.
    Mr. Wofford. Mr. Knollenberg, you understate my view about 
this. I said in my testimony that the highest priority for me 
and for our Board of Directors is seeing that we have a sound 
management control system and that we have auditable 
statements. I do not find the fact that our statements, like a 
number of other government agencies, are not satisfactorily 
auditable yet, acceptable at all.
     You need to understand that we are a new agency. When the 
Corporation for National Service was created, several programs 
of the old Action agency--the senior programs, Vista, and the 
whole Action financial system--were combined with the small new 
Office of National Service into a new corporation.
    The first audit only one month into AmeriCorps; the rest of 
it was the old programs. Rightly or wrongly, the corporation 
decided that it would build its financial systems on the Action 
agency system. The problems we have now go back in some cases 
three decades of the systems of the Action agency.

                arthur anderson's audit recommendations

    Our new chief financial officer--There was some difficulty 
in getting one when the government was closed and our 
appropriations were at zero and I was seeking to find the best 
chief financial officer. But in due course we found her, and 
she has been at work since mid-fall, late October, in an all-
out program to meet the 99 recommendations of the Arthur 
Andersen audit. And we are well on the way. By June I think 
that the great majority of those deficiencies will have been 
corrected. I share totally your concern.
    Mr. Knollenberg. They stated there were 99, and that all 
but two would be resolved. That seems like a tall order. I wish 
you well. If that can be realized, fine. But it is a bit too 
much for this guy to accept on the surface.
    Mr. Wofford. Well, Arthur Andersen confirmed I think that 
we have resolved 28 of them. And since then many more we 
believe, satisfactorily resolved. I am meeting with our board 
tomorrow. There is nothing our board feels more strongly about 
than this, too.
    Mr. Lewis. If I can interpose there, Ms. Cunninghame has 
indicated to us that of those 99 she expects that all of those 
will be corrected except for two, or at least will be in the 
process of implementation. And ``the process of 
implementation'' is the question mark.
    Mr. Knollenberg. That does not mean that these will be 
done, I guess is what I am saying.
    Mr. Lewis. Correct. That is right. That is right.
    Mr. Knollenberg. Yes. Thank you.
    Mr. Wofford. Mr. Chairman, there were the two questions Mr. 
Knollenberg asked.
    Mr. Lewis. Please respond to that.
    Mr. Wofford. Yes.
    Mr. Lewis. And then we have got to move on to Mr. Walsh, 
sir.
    Mr. Wofford. On how much the corps members get. And one of 
your colleagues just very recently said the GAO has reported 
that the average AmeriCorps volunteer receives $26,000. The GAO 
never, never, in any way whatsoever, reported that, or in any 
way suggested that AmeriCorps volunteer members were getting 
more than the standard amount that I told.
    They estimated our own average cost, from the corporation's 
appropriations, at a little under $18,000 per member. The 
$26,000 figure has nothing to do with what corps members get. 
It is their estimate of the total resources that were in the 
projects they studied, applied to those projects. It is the 
total resources; not what our corporation is paying.
    And I ask you to help us on this misinformation because, if 
you are one of 24,000, 25,000 AmeriCorps members living on $160 
a week, hoping to have a voucher that will give you $4,725 to 
pay off your college loan or to go to college, and you hear in 
the evening news that somebody is saying, ``They are being paid 
$26,000,'' I think you can imagine sort of the blow to the 
spirit when they think they are serving their country.
    Mr. Lewis. Thank you.
    Mr. Walsh, welcome, and we yield to you.
    Mr. Walsh. Thank you, Mr. Chairman.
    Senator, good to see you.
    Mr. Wofford. Thank you, sir.

                         national service trust

    Mr. Walsh. There was one budget question here, and that is 
the line-item for National Service Trust, $59 million to $100 
million. What is that for?
    Mr. Wofford. That is the money that we are putting into the 
trust to account for the educational vouchers that will be owed 
the number of corps members that we estimate will be entitled 
to them.
    Mr. Walsh. So at the time of completing their service, 
these are the funds that they would get for their tuition?
    Mr. Wofford. It is about twice what the readjustment 
allowance from the Peace Corps was, I think. It is a voucher 
that during seven years they have a right, if they get admitted 
to a college or they have a college loan, to pull down. The 
money never goes to the corps member. It goes to either the 
university or to the lending institution.
    Mr. Walsh. All right. So this is anticipating an increase 
in the number of volunteers two years out, basically?
    Mr. Wofford. Yes.
    Mr. Walsh. OK.
    Mr. Wofford. We also are asking for $10 million. That is 
the one other increase, I believe, other than the America Reads 
initiative. Ten million dollars for the National Service 
Scholars program, we would match out of the trust fund $500 for 
$500 in local community funds put up by civic organizations or 
corporations for each high school in the country.
    Mr. Walsh. I would like to focus a little bit on the 
volunteers, and just briefly revisit this issue of cost per 
volunteer. The Peace Corps has enjoyed strong support on 
Capitol Hill for a long, long time. AmeriCorps is not quite 
there, yet. But I think it needs to be said, what would you 
estimate the costs for a Peace Corps volunteer, per volunteer, 
versus AmeriCorps?
    Mr. Wofford. Substantially more. I do not want to be unfair 
to the Peace Corps.
    Mr. Walsh. Which is more?
    Mr. Wofford. The Peace Corps is substantially more than 
AmeriCorps, I think you will find. And the Army is twice. For 
an enlisted man, the Army is two or three times, probably, what 
AmeriCorps is.
    I cannot give you today out of my head the average cost of 
the Peace Corps.

                     peace corps cost per volunteer

    Mr. Walsh. The Peace Corps cost per volunteer versus 
AmeriCorps cost.
    Mr. Wofford. Well, we do not actually use the word 
``volunteer.'' The President does, but we do not use it for 
AmeriCorps members. Shriver was bold enough with the Peace 
Corps, since there were not a lot of unpaid volunteer non-
profits around, to call them Peace Corps volunteers.
    Mr. Walsh. Well, I think the issue has been made, why would 
you be paying volunteers? We have been doing it for years in 
the Peace Corps.
    Mr. Wofford. And in the Army.
    Mr. Walsh. Well, let us keep them out for a second. I just 
want to try to keep it as much as we can apples-to-apples, 
here, AmeriCorps versus Peace Corps.
    Mr. Wofford. Domestic Peace Corps and overseas Peace Corps. 
AmeriCorps is the domestic Peace Corps.
    Mr. Walsh. Right.
    Mr. Wofford. And your Peace Corps was the overseas Peace 
Corps.
    Mr. Walsh. What is the difference in cost per volunteer?
    Mr. Wofford. I cannot speak for--The AmeriCorps cost per 
corps member is now going down to $17,000 per corps members, 
and down to $15,000 three years from now, per corps member 
total cost.
    Mr. Walsh. Do you have a ballpark on what Peace Corps 
volunteers get?
    Mr. Wofford. My colleagues are saying around $40,000, but I 
do not know. They think that is accurate. I really do not want 
to advance that.
    Mr. Walsh. Just a ballpark figure.
    Mr. Wofford. My colleague, Mark Geren, needs to speak for 
that.
    Mr. Walsh. Right. I understand. But I am just trying to get 
an idea.
    Mr. Wofford. No, the Peace Corps has the overseas costs of 
travel.
    Mr. Walsh. True.
    Mr. Wofford. And in our day, we had doctors over there.
    Mr. Walsh. The cost of living tends to be a lot lower over 
there, too.
    Mr. Wofford. I don't know if in your day there were doctors 
in the Peace Corps staff overseas.
    Mr. Walsh. There were.
    Mr. Wofford. The Peace Corps selects the volunteers, 
deploys them, terminates them.
    Mr. Walsh. Right.
    Mr. Wofford. We give grants to Habitat or to Red Cross, and 
they select the corps members and they deploy them.

                          selection of members

    Mr. Walsh. Okay, that gets to my next question on the 
volunteers. Does the National Service Corporation select and 
select out its members?
    Mr. Wofford. Only the National Civilian Community Corps, of 
about 1,000 now, which we hope to grow to 1,600.
    Mr. Walsh. So these 24,000, 25,000 members--You call them 
members?
    Mr. Wofford. Yes.
    Mr. Walsh. You do not select them, and you do not select 
them out in case there is a problem?
    Mr. Wofford. No. Habitat for Humanity likes to select its 
corps members from its outstanding college volunteers in 
Habitat, and that is their preference.

                         completion of activity

    Mr. Walsh. Have you had now in the years that you have been 
in business members complete their activity, get their tuition 
payment? And how many of those are there right now?
    Mr. Wofford. Twenty-six thousand have drawn down their 
vouchers, out of probably 44,000.
    Mr. Walsh. They have completed?
    Mr. Wofford. Forty-four thousand, I believe it is, have 
completed their service, of whom maybe 5,000 are second-year?
    Mr. Walsh. Well, what I am trying to get at here is, what 
is their experience after they leave this service? What 
percentage of them are taking the voucher, and what percent of 
them are actively involved in going to school, if they had not 
completed their school, and that sort of thing?
    Mr. Wofford. I would like for my colleague, Gary Kowalczyk, 
who is behind me, to comment on this, because he was I think 
correcting what I said about 26,000 payments.
    How many vouchers?
    Mr. Lewis. Mr. Kowalczyk?
    Mr. Kowalczyk. Yes. Mr. Chairman, we have brought more 
detailed information for the record about this. In general, the 
first-year graduates, over half have begun to either pay off 
loans or use that to go on to school. And they have seven years 
to do this. Second-year class, it is obviously less than half, 
because that has just been completed. And we would expect that 
number to grow, as well, over time. But we will provide 
specific information on the numbers for the record.

                         Education Award Usage

    As of February 26, 1997, 58 percent of the AmeriCorps 
members who earned education awards supported with funds from 
the 1994-1995 program year had used all or part of their 
education awards. The National Service Trust had made payments 
totaling $26,029,709.20 for these awards.
    As of February 26, 1997, 38 percent of the AmeriCorps 
members who earned education awards supported with funds from 
the 1995-1996 program year had used all or part of their 
education awards. The National Service Trust had made payments 
totaling $18,597,452.88 for these awards.
    As of February 26, 1997, the National Service Trust had 
made at a total of 30,216 payments.
    AmeriCorps members have seven years from the end of their 
service to use their education awards. These figures do not 
include AmeriCorps members who were not enrolled in the 
National Service Trust, such as members of AmeriCorps*NCCC and 
AmeriCorps*VISTA who took a cash end-of-term payment in lieu of 
participating in the National Service Trust.

    Mr. Walsh. So everyone that completes their two years of 
activity----
    Mr. Wofford. No, it is one year in AmeriCorps for $4,725. 
And you can stay a second year, unlike the Peace Corps.
    Mr. Walsh. OK.
    Mr. Wofford. But many--about 10-plus percent--are staying a 
second year.
    Mr. Walsh. OK.
    Mr. Wofford. Are being asked to stay.
    Mr. Walsh. So, I mean, is there some determination at the 
end of this year whether they have met their obligations, or do 
they, just by virtue of the fact that they have been on the 
payroll for a year, meet their obligation?
    Mr. Wofford. The organization that supervises, administers, 
selects them, has to certify that they finished a satisfactory 
full year, 1,700 hours of service.
    Mr. Walsh. Any figures on what percent do not complete from 
start to finish satisfactorily?
    Mr. Wofford. There is currently in the GAO study of the 
state National Service Commission structure and how the state 
commissions are operating. GAO studied programs in seven 
states, some 24 programs. They focused more than is 
representative of the corps as a whole on programs that are in 
the Youth Service Corps variety, which have a high proportion 
of at-risk kids and non-high-school graduates.
    And in their report it is 39 percent, I believe they said. 
I want to emphasize--as did GAO--that these 24 programs out of 
430 were not designed to be a representative sample. They did 
their best to visit some diverse projects.

                            completion rate

    Mr. Walsh. These would be the ones that would have the most 
problems with retaining people and getting them to complete 
their service?
    Mr. Wofford. Yes. I want to just make one very crucial 
point so you will understand this when you read the report. 
They said that 39 percent of those projects, it appeared to 
them, were not finishing the full year. Twenty percent of that 
39 had left for what was in the category of the organization's 
supervisor called compelling personal reasons. If you view the 
completion rate as excluding that, their estimate of those 
programs would be 22 percent.
    But what I really have to stress is, if you look at the 
chart on the educational programs, the high proportion of the 
Conservation and Service Corps--which I believe in and as 
Secretary of Labor and Industry in Pennsylvania supported--are 
with at-risk kids.
    Two of the key projects that they looked at were comprised 
almost entirely of drop-outs. Also, one was almost entirely 
Latino, and one was entirely African-American. Only 8 percent 
of AmeriCorps' members have less than a high-school degree.
    The program that they viewed, for example, as an example of 
a high attrition rate, is the Casa Verde program. It is one 
that has been awarded by the Peter Drucker Foundation as one of 
outstanding innovation. It is supported by the Austin 
community. They have taken the most at-risk kids. Thirteen of 
their first 65 left to take good jobs. In those programs, that 
is not a failure. That is a success, because they are on the 
spectrum that is closer to job training.
    On the other hand if the Alliance for Catholic Education, 
which supplies teachers for two years in hard-pressed Catholic 
schools in the South had a 10 percent drop-out rate it would be 
a major problem. I understand that they only had one person in 
their first year drop out to become a priest.
    So average figures are just extraordinarily misleading. The 
project in Alexandria was considered to have a 95-percent 
attrition rate because we agreed, their having started in 
December, there would be only a two-thirds of a year program. 
In those calculations they are listed as having 95 percent 
attrition. We are following the attrition rate very carefully.
    But National Service has so many different varieties that 
you have to look at each kind. And in a program which is a 
last-chance program for at-risk kids--which is about 15 percent 
maybe of our programs, 10 percent of our drop-outs--if they get 
a few people going on to college and if they get a lot going 
into work, that is a success.
    Mr. Walsh. My Peace Corps training started with about 55 
individuals, and at the end of a two-year period, there were 
about 24 who completed the two years. I don't know if that's 
typical.
    Mr. Wofford. The Peace Corps, I believe, by their 
testimony, has 29 percent not using their two years, plus, I 
believe, 80 percent who during the training period overseas 
dropped out, so that it brings it up to something like 30 
percent.
    The Army's attrition rate is 35 percent. Two-year public 
colleges is 47 percent, and four-year public colleges is one-
third. But again, that's a broad brush.

                         measureable objectives

    Mr. Walsh. What I'm trying to do--and I think my colleagues 
have asked the right questions about the program--I'm trying to 
get an idea from a volunteer's perspective. Because I think 
certainly a big part of this program was to take advantage of 
the altruism of youth and to channel kids who otherwise didn't 
have a channel to go to be positive and productive citizens. 
That's what I'm trying to get at.
    How can you measure, quantitatively and qualitatively, how 
these kids are doing after they complete their service? Do you 
have a measurement, or do you----
    Mr. Wofford. We're expanding and taking more seriously that 
whole process. But from the very beginning, the Corporation has 
done more than any program I know to try to insist that every 
project have measurable objectives and tracking of whether 
those measurable objectives are achieved, and preferably, 
quantifiable objectives.
    We've got an extraordinary amount of information on that.
    Mr. Walsh. I think it would help you up here.

                     california conservation corps

    Mr. Wofford. Sure, it would. But, you know, one of the 
things that isn't recognized is the degree to which many, many 
of the programs that became part of the AmeriCorps program were 
programs that had percolated up for many years. One of the 
largest is the California Conservation Corps that has been 
thriving through Democratic and Republican Governors.
    I was in the Back Country Trail project there, where they 
take the very at-risk kids for an extraordinarily demanding 
five months in the back country. They work as hard as anybody I 
have ever seen. Over a period of more than ten years, where 
they've been doing this, they have had an amazing success 
record that they have documented. Something like two-thirds of 
the park staff of the back country Yosemite are veterans of the 
California Conservation Corps.
    We have about 30 of the conservation corps that were formed 
long before AmeriCorps came along. They are a part of 
AmeriCorps and have long track records. They're able to--they 
go to their legislatures in California and elsewhere--and give 
the track record of how they've turned lives around of many of 
the young people.

                          Vista Literacy Corps

    Mr. Walsh. I think that's helpful.
    I have a number of other questions, Mr. Chairman, and 
obviously, we have limited time and I won't ask them, but I 
will submit them. They relate to VISTA, the VISTA Literacy 
Corps, and this effort toward the goal of reading by the third 
grade. I would like to ask some questions about that.
    Mr. Wofford. Remember that VISTA, of the 24,000 AmeriCorps 
members, 4,000 to 5,000 of them are VISTAs.
    Mr. Walsh. Is all of VISTA's budget in your budget?
    Mr. Wofford. Not in your budget, but it's in our budget. We 
get money from the two committees, and VISTA is in Labor-HHS. 
Though the item called VISTA Literacy Corps was dropped, it was 
dropped with a clear understanding that the VISTA work in 
literacy would be continued. It's a very, very vital part of 
VISTA, and it is VISTA's track record over many years in 
literacy work that, in part, we're building on in the America 
Reads initiative.
    Mr. Walsh. Thank you, Mr. Chairman.
    Mr. Lewis. Thank you, Mr. Walsh.
    Senator Wofford, one of the points I want to make, as loud 
and clear as I possibly can, is that, in new programs like 
those that are part of AmeriCorps' work, it is very difficult 
to measure relatively early on. But I'm absolutely convinced 
that one of the problems of the past is that, in programs 
across government--I'm not speaking of your program, but across 
government--because the pattern for a long, long time was what 
did we get last year and how much will we give them this year 
in addition to that, there was very, very little serious 
oversight or measure.
    I am convinced that that which we do not measure, in terms 
of dollars available, you get no results from those that is 
meaningful out there. Surely there are exceptions, like kids 
living in the countryside and so on. But being able to justify 
competitive appropriations becomes very real when we're moving 
towards balancing the budget.
    So, you know, if you think this questioning has been 
reasonably tough--I remember just yesterday you told me I hope 
you spend a little more time than you spent in the other body. 
Well, this is what ``more time'' does. [Laughter.]
    Mr. Wofford. And I appreciate it greatly.
    Mr. Lewis. But, in turn, if you think this is a problem, 
you saw us on the floor in the last Congress, and we hope we're 
not late in the evening when we get to discussions regarding 
AmeriCorps.
    But, having said that, the questions are going to be mighty 
tough. For example--and I want those who give you back-up 
support to listen to this, because we need this kind of 
information for our record, so that we can be better prepared 
as we go forward.
    You indicated that a significant percentage of those 
volunteers are at the $8,000 level, that they can go up to a 
maximum----
    Mr. Wofford. Almost all.
    Mr. Lewis. They can go up to a maximum of 15, but a high 
percentage. Let's assume that. Let's take just that ``almost 
all'' who are at the $8,000 level.
    The testimony so far has indicated that those who graduated 
so far, who have gone through the two-year program, who have 
begun to draw down tuition grants, represent approximately 50 
percent. So let's say we take just the 47-25, not assume 
increasing numbers over seven years, and you cut that in half. 
Then the $8,000 grant does become, factually, at least, 
roughly, a $10,350 grant, at least, if you presume the draw 
down.

                       Health Insurance Coverage

    Then you add to that, I don't know what percentage of 
volunteers in that first class who drew down or had received 
health insurance. Can you give me a percentage?
    Mr. Wofford. I would guess three-fourths or more. 
(Conferring.) Excuse me. It's much less.
    Mr. Lewis. Do you see what I'm getting at, though? There's 
a very real number, if you're willing to----
    Mr. Wofford. No, we generally estimate that the total 
benefits to Corpsmembers are in the range of--assuming they 
draw down the education voucher--$13,000. But of the living 
allowance, the $8,000, the local program has 15 percent.
    Mr. Lewis. As you know, we're going to be trying to get----
    Mr. Wofford. Thirty-three percent of program support, but 
15 percent of----
    Mr. Lewis. I can hear one of my people who is very 
concerned that maybe there's a lack of really careful 
accounting here. Let's say a colleague like Todd Tiahrt might 
very well say, ``Look, we're cutting back tens of millions of 
dollars for housing programs that work, and people may not have 
adequate housing because of a program that we now are having 
difficulty measuring.'' When he starts doing that, then you 
start turning heads. You know, we need some help here, and it 
has to be hard-nosed dollar accounting.
    There is roughly a $2,000 overhead cost per volunteer, I 
gather. We need to get pretty specific in terms of the way we 
measure that, so that we aren't blindsided as we go through 
this.
    Back to America Reads. I'm not going to spend much more 
time on it because we have a number of questions I would ask 
for the record. But, indeed, it's important that you help us 
with this as well.

                            Education System

    A lot of the questions we have, which suggest there is a 
need at the Federal level to go out to school districts and 
find those school districts that are concerned about getting 
some help with better teaching kids to read, in some way 
training people who come in on a volunteer basis to help better 
teach people to read. Many would argue that that suggests that 
the Department of Education, one more time, demonstrates it's 
an abject failure, or clearly, the Department of Education, 
among other things, was going to deal with basic literacy, and 
one of the major components to basic literacy questions 
involves reading questions.
    I think you generally agree with what I have just kind of 
outlined.
    Mr. Wofford. Respectfully, I disagree.
    Mr. Lewis. Tell me what you disagree with.
    Mr. Wofford. I've been indoctrinated to believe that the 
education system is run by local school districts, not by the 
Federal Department of Education.
    Mr. Lewis. Then what's the role of the Department of 
Education?
    Mr. Wofford. I hope the Department of Education can play a 
catalytic and leading role in sometimes setting goals, like the 
need by grade 3----
    Mr. Lewis. Since we're not learning to read, they haven't 
gotten there, right?
    Mr. Wofford. Well, they don't run the programs locally.
    Mr. Lewis. You don't run the programs, either.
    Mr. Wofford. You don't want them to. I will not----
    Mr. Lewis. You will not, right?
    Mr. Wofford. No, but we are in a different--we are adding 
some people.
    Mr. Lewis. What I'm really doing is just asking you to back 
up a little bit.
    One of the major items that caused me, somewhere in the 
past, to say ``Hey, maybe there's a need for the Department of 
Education because there are a lot of major elements that relate 
to the whole question of literacy in many a school district, 
that ain't gittin' there.'' So maybe some advice and counsel, 
maybe some training ideas and maybe some stimulation would be 
good.
    Mr. Wofford. Yes.
    Mr. Lewis. We're a long ways down the path and we don't see 
any measurable results in terms of the Department of 
Education's action in those areas. Indeed, that is one of the 
items. The fact that there has not been progress is one of the 
items that caused me to say, ``Well, maybe we ought to at least 
consider what National Service is proposing here.''
    I'm frustrated like you are, that kids are not learning to 
read out there, and we've got good classroom teachers who are 
supposed to be doing it, and we all say the local schools ought 
to be running these programs.
    You know, there's a very small circle here that causes us 
to end up biting our tail if we're not careful.
    Mr. Wofford. Mr. Chairman, I wish I could adequately rise 
to the occasion of making a defense of what I think are very 
good, effective and creative things that the Department of 
Education in recent years has done on the literacy matter. From 
Families First, to Read Right Now, the programs I have seen 
around the country where it's being done well, one of which is 
Houston--which you've heard enough about this morning----
    Mr. Lewis. I've heard a lot from you.
    Mr. Wofford. Well, you've heard a lot from me, but in 
Houston I found great appreciation for the role of the 
Department of Education in helping with their literacy 
programs.
    From the people who are on the front line of literacy, I 
have almost invariably found respect for what the Department of 
Education has done in recent years to find the best practices, 
to give extra support. But it's only a small amount of support 
in a huge education system run by States, but most of all local 
school districts.
    Mr. Lewis. Senator, I want you to know that I went on a 
local school board many, many years ago, and I went on that 
school board because I knew my kids, when they first went to 
our elementary school, couldn't learn in buildings like that. 
And boy, did they learn, in portable buildings, because there 
was a classroom principal who supported good teachers and 
insisted that parents be involved.
    It goes right down to that. If we don't have principals who 
are willing to accept these volunteers, then the principals who 
are accepting them will be just adding on to the good work 
they're doing and average poor kids won't do very well. That's 
really kind of the heart of my concern.
    That is not our committee's responsibility. I chose not to 
be on the Ed and Labor Committee, and even that subcommittee, 
so we're going to have to leave that with John and have him do 
his good work. But I have many questions like that for the 
record that I would like to have you address, if you will, 
because they will be a spillover to the other committee and we 
intend to share some of this input with them.

                            Paid Volunteers

    What we're about here is one of the fundamental questions: 
is there not just an appropriate, but is there an effective 
Federal role that will help stimulate what we believe that 
States and local governments ought to be doing in the first 
place?
    I think it's very important that we recognize that 
volunteers can only do so much, but the public is out there 
right now asking some pretty fundamental questions, as to how 
much are we paying these volunteers. There used to be a 
government in the world where we kind of worried about changing 
the definition of things, that we know as a standard thing, and 
now we've got volunteers who are paid. Boy, I'm telling you, 
the debate on the floor is going to dwell on that and dwell on 
that, and we'll keep trying to answer the question.
    Mr. Wofford. Mr. Chairman, let me state that because of the 
confusion between paid volunteers and unpaid occasional 
volunteers, we don't, in fact, use the word ``volunteers''. 
George Romney's point was you can't get--except for some very 
few and very wealthy people and very religiously dedicated 
people--full-time service unless you give a living allowance. 
The Peace Corps is full-time service. AmeriCorps is three-
fourths plus full-time service.
    If you believe there's a real need for full-time service by 
a range of citizens, particularly young people in this society, 
you have to give some kind of living allowance. Now, what our 
Education Only award is doing is saying to Boys and Girls 
Clubs, where we are going to have 800, ``we're only going to 
give you the education GI Bill-like award. You figure out what 
the minimum living allowance is.'' A group of evangelical 
ministers is planning a service corps of several thousand 
people and they think $6,000 a year, plus putting up people in 
church basements, will be the way to do the living allowance. 
But the case for full-time service is crucial to whether 
$12,000 or $13,000 for the full-time service of a young person 
is worth it.
    Mr. Lewis. I hate to interrupt you, but I want to move on 
to the Summit. But before we do that, I would like to call on 
my friend, Rodney Frelinghuysen, for some additional questions.

                             Budget Request

    Mr. Frelinghuysen. Thank you, Mr. Chairman.
    On the surface of it, you're asking, as I understand it, 
for a 36 percent increase over your previous budget amount?
    Mr. Wofford. We're asking for an increase for--yes, for 
11,000 members for the reading initiative.
    Mr. Frelinghuysen. Somewhat akin to what I was asking 
earlier, there seems to be some unease--and it's on both sides 
of the aisle--about obviously our primary obligation is to 
balance the budget by the year 2002, and people often ask that 
we look at increases.
    If this is the number one priority, why can't you rearrange 
your programs within the amount of money we gave you last year, 
or have a lesser increase in order to achieve your objectives?
    Mr. Wofford. We did, a year ago, at my suggestion, but with 
the full support of our board, before the President had set 
this goal, we decided that the priority we would urge on all 
the State Commissions is problems of children and youth, and 
especially educational programs. That is already our priority.
    The Summit that Mr. Lewis is going to ask about is going to 
even more clearly set goals for the five things that young 
people need, and I think our Corporation is going to try to 
arrange our priorities to do more.
    If there is to be a national campaign to achieve the goal 
of reading at grade three, the estimate is you need 11,000 new 
tutor coordinators, organizers, etc. That we could not do on 
our own without additional appropriations.

                     the summit on america's future

    Mr. Frelinghuysen. Do you anticipate the Summit is going to 
ratchet up the demands for dollars over and above what you're 
requesting here?
    Mr. Wofford. The Summit is very dedicated. All of us that 
are organizing it, and General Powell most particularly, are 
seeing that it not be an occasion for focusing on Federal 
policy or Federal dollars, but that it be focused on how you 
crack the atom of civic power in communities and States. So no.

                      america reads outyear budget

    Mr. Frelinghuysen. I think you made reference to it in your 
opening statement, but what is the outyear budget for the 
America Reads initiative?
    Mr. Wofford. The outyear budget for the whole initiative is 
$2.5 billion. Susan Stroud, my chief counselor on this, she 
says $200 a million a year for five years for us, and $1.5 
billion for the Department of Education over five years.

                            carryover funds

    Mr. Frelinghuysen. For the last two years you have had 
carryover funds of $276.8 million, and that was for fiscal year 
1997, and $226 million for fiscal year 1997. Can you tell me 
why you have rather large carryover funds?
    Mr. Wofford. If you would permit me, I would like Mr. 
Kowalczyk to comment on that.
    Mr. Kowalczyk. In the appropriations bill there is a 
restriction on when the amounts of money become available to 
the Corporation. A great majority of it does not become 
available until September 1 of the year that it is 
appropriated. For example, even in our 1997 appropriation, a 
great majority of the moneys are not available until September. 
So the carryover you see reflects the timing of our grant 
obligations. We can't make most of those grant awards until 
September. Some of them carry into October and November, and 
when they do, we report them to you as carryover but, in fact, 
they are for programs that begin in the fall and winter of this 
year.
    Mr. Frelinghuysen. So to get a clearer picture of exactly 
how much money we're dealing with here, where do the carryover 
funds figure into your overall budget proposal?
    Mr. Kowalczyk. We would like to see greater flexibility in 
the timing of those moneys. We have asked for two-year 
availability, but in the past that has been an outlay concern 
for the Committee and for the Congress. We have worked 
cooperatively to come up with an amount that represents 
reasonable need up until September of that year, with other 
moneys becoming available after September.
    It is not an instance of having a need and money and not 
being able to address the need. It's simply a question of the 
committees making available the resources to us after September 
1 of the year. There is only a 30-day window there to record 
that obligation during that period. A large amount of that 
obligation actually gets recorded in the following year.
    Mr. Frelinghuysen. So, translating that into English--and 
I'm sure that's a full and proper explanation--what does it all 
mean relative to your overall budget request?
    We have obviously set some of these parameters, but what 
does it do to your overall bottom line?
    Mr. Kowalczyk. We provide to the Committee amounts on a 
comparable basis each year. So the $200 million that we are 
seeking represents an increase above the prior year amounts 
that were available. The timing of the obligation is simply a 
matter of when the moneys become available to us. It doesn't 
represent differences in programs.
    The $200 million is the correct figure and the amount 
before this Committee is the amount that Senator Wofford has 
testified to.
    Mr. Wofford. The timing is feasible, if that's convenient 
to the Congress and the budget officers, because increasingly 
our programs are on an academic year. The programs can start in 
the fall without hurting our grant-making process.

                          grant-making process

    Mr. Frelinghuysen. I want to focus for a minute on the 
whole grant-making process. I'm staggered when I look over some 
of the IG's report and audit reports on the number of just the 
Federal agencies that you deal with here.
    Have you quantified what----
    Mr. Wofford. Which are you referring to?
    Mr. Frelinghuysen. I'm referring to the report of--the 
statement of record of Cornelia Blanchette, Associate Director, 
Education and Employment Issues, Health, Education and Human 
Services Division, from last May.
    I'm not being adversarial, but I'm wondering--and I'll give 
you a copy of this. She lists in her submittals here the 
Federal agency grantees in the AmeriCorps USA program, and just 
about any Federal department one has ever heard of, and a few 
that I've never heard of, you have some sort of relationship 
to.
    How do you quantify--You know, what are the carrying costs 
of our relationships with all these agencies? I know some of 
them feed money into the purposes of your program and they work 
with you, but I just wonder whether someone has actually done 
an analysis of what all the administrative paperwork is just 
relative to the Federal grantees.
    Mr. Wofford. Well, there are no more Federal grantees. That 
was ended last year.
    Mr. Frelinghuysen. So this list here----
    Mr. Wofford. I don't know the list you're referring to. 
[Examining.]
    We're going to need to get back to you and see what this is 
about.
    The Federal grants in which we made to the Department of 
Agriculture for rural programs they initiated was one in 
response to the President's request to Federal agencies to see 
whether, they could use AmeriCorps members in local programs.
    We had some wonderful programs. Some of our best rural 
programs were local programs initiated by the Department of 
Agriculture. Some of the best conservation programs were 
initiated by the Department of Interior.
    It became unexplainable to Congress and the public why one 
agency would give grants to another, and it has been described 
as AmeriCorps members working as bureaucrats in the Department 
of Agriculture, where they were among the most grassroots 
programs we had.
    Nevertheless, we concluded that it was not a fight that was 
worth continuing and we lost some of the very best rural 
programs, conservation programs, that we had. But there are no 
grants to Federal agencies any more.
    I would have to study what the document is that you gave 
me. But our grants with Federal agencies have been ended. There 
are none any more.
    Mr. Frelinghuysen. So there are no Federal grantees. I 
wasn't trying to raise an issue that you dealt with. I just 
wondered whether there are any Federal grantees out there.
    Mr. Lewis. Would you evaluate that and respond for the 
record?
    Mr. Wofford. Yes, we will.
    Mr. Frelinghuysen. It was attached with some materials 
from, I guess, the GAO.
    [The information follows:]

[Page 262--The official Committee record contains additional material here.]


    Mr. Frelinghuysen. How many contracts do we have with 
private and how many contracts do we have with what might be 
classified as public agencies, nonprofit agencies?
    Mr. Wofford. AmeriCorps has some 430 grantees. Two-thirds 
of them are grants made by the State Commissions. The great 
majority of the grantees are nonprofit organizations, and we 
can give you a full list of the organizations.

                     administrative costs on grants

    Mr. Frelinghuysen. I'm more interested, obviously, in the 
overall statistics. I just wondered what the cost of doing 
business with these grantees is. If you take ``x'' university 
or Head Start, whether, in fact, you've done sort of a study as 
to what it costs in terms of the administrative paperwork.
    Mr. Wofford. Head Start, for years, has VISTA members and 
there is very little paperwork with VISTA. There's no money 
that goes with it. It's just a VISTA that gets assigned to the 
Head Start program.
    The grant program, which is what AmeriCorps, other than 
VISTA, is about, the highest cost projects are under $18,000 
per grant. The average of the State grants is $12,388. Our 
national nonprofit direct grant program--by the way, we have 
caps on what the grants can be--is a little lower than the 
amount I just gave you. I have the amount of grants to every 
one of our grantees here with me.
    We have agreed that our average cost per AmeriCorps 
member--we agreed with Senator Grassley and, beyond that, we 
put it into our Act last year--we are going to reduce the 
average cost from $18,000, where we began, to $17- to $16- to 
$15- by the year 1999-2000.
    Mr. Frelinghuysen. Senator, I have some questions relative 
to actually how you're going to accomplish that, but I just 
want to focus once again, if that list isn't part of the 
record, then----
    Mr. Lewis. It will be.
    [The information follows:]



[Pages 264 - 276--The official Committee record contains additional material here.]




                      inspector general's findings

    Mr. Frelinghuysen. When the IG issues reports relative to 
the National Center for Family Literacy, the ARC of the United 
States, the home instruction program for preschool youngsters, 
the Northwest Service Academy, the Greater Miami Service Corps, 
the Blackfeet Nation, and they make some critical comments 
about the way money is spent, what literally happens as a 
result of those findings and recommendations?
    Mr. Wofford. The Inspector General's reports have been of 
tremendous use in finding things that are wrong in the agency, 
but mostly in the programs that they look into around the 
country. Some 70 of our grants were not renewed, either by the 
State Commissions or by us, if they were national nonprofits. 
The IG reports have been very valuable in finding programs that 
should not be renewed, and in some cases programs where some 
action had to be taken.
    You listed at least one such that I'm aware of.
    Mr. Frelinghuysen. So Members of Congress who might review 
such a list--and I have looked through at least the materials I 
have been provided. This is from reports issued during the 
period April 1, '96, through September 30th of last year. All 
of those recommendations have been addressed and those problems 
have been rectified?
    Mr. Wofford. We're working at it, and we have taken very 
strong action in many cases. There has been crucial aspects of 
information.
    We have now a very strong working relationship between our 
Chief Financial Officer and the Inspector General. That is a 
vital part of keeping us----
    Mr. Frelinghuysen. It may, indeed, I am sure, be a fraction 
of your overall grantees, but I do think it's one of those 
things that people throw up as a reason to express some concern 
and some doubt.

                          decentralized system

    Mr. Wofford. Mr. Frelinghuysen, one of the things that I 
hope people will keep in mind is that, unlike the Peace Corps, 
which I administered in Africa, which was responsible for its 
programs, every part of it, from beginning to end, this is an 
extraordinarily decentralized system. This year we have taken 
even further steps so that the State formula grants we are not 
second guessing. We evaluate, we seek to take action if there's 
something wrong. But we are really devolving to the governor-
appointed State Commissions the decisions.
    In fairness to the State Commissions, the people who are 
really responsible for the programs--it is Millard Fuller's 
habitat for humanity program--that administers the AmeriCorps 
members. Our grantees have been very responsive to our 
evaluations or to the IG's investigations. But we don't run 
these programs. So this is a reinvented, very decentralized 
public/private partnership.

                          improving efficiency

    Mr. Frelinghuysen. You made some comments on page 13 of 
your testimony which are in line with your comments. You say 
here, ``Over the last year, the Corporation has made many other 
changes to improve our efficiency. We have made improvements to 
our grant review process and increased the control the 
Governors' Commissions on National Service have over program 
decisions.''
    Why have you done that? I'm sure it's a good idea, but why 
have you done it?
    Mr. Wofford. As Congress set up this Act, you did not go 
the route--you did not do it the way Sargent Shriver and the 
Peace Corps would have done it. Instead, you set up a system in 
which every Governor was asked to form a State Commission. You 
originally divided funding into three parts: population 
formula, competitive grants, which had to go through two 
hurdles to get decision making to the Federal level, and then 
national nonprofits.
    We are now not having the formula grants, go through a 
review process at the state level and a second one in 
Washington. The Speaker has often said he recognizes the need 
for millions of volunteers and for some full-time service 
people, but he doesn't like the Federal Government calling the 
signals. One of the ways you don't call the signals is say the 
signals should be called by State Commissions.

                    current cap on individual grants

    Mr. Frelinghuysen. Going back--and you may have indirectly 
commented on it in your responses to me--you testified on a 
number of occasions to the whole issue of bringing the costs 
down from $17,000 in the current year, to $16,000 in '98, and 
then a lesser figure in '99.
    How are you actually doing it? How are you actually going 
to accomplish those objectives, given, let's say, your plans to 
spend more money and embrace, obviously, a lot more people into 
your overall system for good purposes?
    Mr. Wofford. What is our current cap on individual grants? 
[Conferring.] We've got about a three-way mechanism of 
enforcement. The State Commissions are given a budget that they 
can't go beyond, and that budget is an average budgeted cost 
for their grants.
    Mr. Lewis. Whoever is responding should identify himself so 
the recorder can get it.
    Mr. Wofford. We have an average cost. All together, their 
grants have to fit the average budgeted cost of $17,000. That 
includes the education awards and $2,000 for their overhead and 
our overhead in training and programming. It's about $10,000 as 
the guidelines to the State Commissions for what they have to 
average.
    Now, they can go above the $10,000 in a grant, as I pointed 
out to you. The highest grant this year that State Commissions 
have made is $17,629. They can go above the average. The 
programs that were above our overall average were required to 
reduce by ten percent this year, but the State Commissions have 
to stay within that budget. We have control of the national 
direct one-third, to stay within our budgeted overall cost. And 
we're going to do it.
    Mr. Frelinghuysen. So, come hell or high water, you're 
going to do it?
    Mr. Wofford. We're going to do it.
    Mr. Frelinghuysen. With the States taking their 
responsibilities, and your portion that you have direct 
responsibility for.
    Mr. Wofford. And it gives them an incentive to lean toward 
the programs that have shown how they can do it more cost 
effectively. We have some very good programs where the grants 
are in the $7,000 to 8,000 or $9,000 level, and now, with the 
educational awards only, States can use that to keep within our 
budgeted costs.
    Mr. Frelinghuysen. Thank you for your responses.
    Thank you, Mr. Chairman.
    Mr. Lewis. Mr. Frelinghuysen, thank you for your questions, 
and also, for your presence.

                      national service scholarship

    Before going to the question of the Summit for America's 
Future, where we have a number of questions to be asked, I 
would like to dwell for just a moment on an item that you and I 
discussed yesterday in my own office that related to a 
scholarship that would be a National Service scholarship for 
every high school in the country.
    $10 million has been designated to cover that prospect, 
with $500 per scholarship coming from the National Service 
Program and to be matched evenly by some local or community 
effort, and you indicated to me that there are people like the 
Kiwanas Club and the Rotary Club and others who are anxious for 
this kind of input and participation, and all of us can 
understand why they would like to supplement their scholarship 
provisions with something coming from the Federal Government; 
in this case, National Service.
    In that proposal, do you suggest that there should be 
required participation in National Service after receiving such 
a scholarship?
    Mr. Wofford. No. The scholarship is for outstanding 
volunteer unpaid service that the student will have done while 
in high school.
    Mr. Lewis. It would be non-National-Service-related, 
likely, anyway.
    Mr. Wofford. They might be part of a service learning 
program in the school that encouraged students to volunteer, 
but it would be for volunteer service they have done in the 
community.
    The civic clubs--the Lions and the Elks and the Rotary and 
others--have been part of helping to plan this. A large number 
of those civic clubs nationally have conveyed a lot of 
enthusiasm about this and said that they have been giving merit 
scholarships to many students and that they like the idea of 
now giving service scholarships. This is a kind of jump-start 
for something that some of them wished they had started 
earlier, and we expect a great response from them in both 
matching the money and in helping to pick the outstanding 
students and give their own name to the scholarship.
    Mr. Lewis. Is there any such grant program, service-related 
or otherwise, academically related that is provided with jump-
start kinds of monies coming from the Department of Education 
to local high schools?
    Mr. Wofford. I don't know of any like that. Do you know 
of----
    Mr. Lewis. I don't know of any, and this is not really the 
appropriate committee.
    Mr. Wofford. No, I know.
    Mr. Lewis. But I raised the question for pretty obvious 
reasons.
    Mr. Wofford. Well, we were surprised with how few of this 
kind of scholarships are actually being offered anywhere.
    Prudential has quite an extraordinary excellent program 
that gets local nominations, but it does it at the State and 
national level. Boys and Girls Clubs give about a dozen maybe 
each year from around the country, but the idea of this is that 
every high school in America would have at least one 
outstanding citizen service student, a volunteer service 
scholarship winner announced at graduation or whenever they 
wanted to announce it.
    Mr. Lewis. Mr. Frelinghuysen, I am just going to throw an 
item out here. For you and I are of a basic background and 
style, probably one of the individuals who would question 
seriously, probably didn't necessarily think that the 
Department of Education idea was automatically a bad idea. 
Whether we should have voted that way in the past or now is now 
being questioned by many of us, only because we are trying to 
measure results and trying to find where the results lie.

                           educational awards

    Having said all that, you suggest in your testimony, one 
more time before we get to the President's summit--you 
suggested that the Corporation has been encouraged to expand 
significantly the number of educational awards, and that is 
separate from scholarship awards, but rather, educational 
awards, and there is a $10-million item there, where we are 
providing awards for people, encouraging them to expand their 
own or extend their own education.
    Mr. Wofford. What is the $10 million?
    Mr. Lewis. It is $9.5 million, actually. It is 2,000 
recipients.
    Mr. Wofford. Oh, I see. Excuse me.
    The first experiment----
    Mr. Lewis. Correct.
    Mr. Wofford [continuing]. Expansion of a little pilot 
program----
    Mr. Lewis. Right.
    Mr. Wofford [continuing]. Was for 2,000 education awards, 
which is a little less than $10,000, $10 million, but we expect 
that. The reason the $10 million seemed small is we, with 
agreement with----
    Mr. Lewis. Well, you are going immediately to my question. 
That is, the cost is a little less than $10 million for the 
2,000, and your statement indicates an expansion to 3,000 
additional awards, and I am not sure where that money comes 
from.
    Mr. Wofford. It is not additional money.
    Mr. Lewis. It says 3,000 additional awards. Am I wrong on 
that?
    Mr. Wofford. Yes, but those, in fact, bring down our costs 
because instead of the average grant of--well, we are not 
talking about the National Service Scholars Program anymore.
    Mr. Lewis. No, we are not.
    Mr. Wofford. We are talking about the ed-only awards, 
right?
    Mr. Lewis. That is right.
    If you add 3,000----
    Mr. Wofford. Out of the AmeriCorps regular appropriation 
for 24,000 AmeriCorps members, the education----
    Mr. Lewis. Only.
    Mr. Wofford. The education only would be an investment of 
only $4,725, or maybe $4,725 with $1,000 bonus for 
administration. It, therefore, brings down our costs. It does 
not add to them.
    In other words, a State commission has so much money to 
give out in AmeriCorps grants, if it gives out grants at only 
$5,000 instead of at $10,000, it lowers its costs. It enables 
it to have more AmeriCorps members, but the same money, no 
additional money.
    Mr. Lewis. Maybe what I will have you do is have staff 
focus on this series of questions so that we can complete that 
for the record, but it did remind me of an aside that I was 
going to ask, and then I decided, well, don't be so cynical, 
please don't ask that, but maybe it would be an interesting 
project to have volunteers, a small number of volunteers poll 
for us not just the State education departments, maybe even the 
individual school districts, and then take the Department of 
Education total expenditure budget and say if you would have 
the Department of Education or we will divide this up and send 
you by e-mail a check for your proportionate share. I wonder 
what their responses would be.
    Mr. Wofford. I think you are trying to put me up against 
Secretary Riley----
    Mr. Lewis. No, no, no.
    Mr. Wofford [continuing]. In that other committee.
    Mr. Lewis. Senator, you have demonstrated clearly that you 
have had enough experience in this business that you are not 
going to suggest that somebody else shouldn't exist. That is a 
dangerous business, but nonetheless, it is a legitimate line, 
and I am sure that probably there are volunteers who would like 
to volunteer for that project, but nonetheless, moving to the--
--

                         three types of funding

    Mr. Wofford. I think it might clarify to you if I said that 
there are three types of funding, roughly. There is the Vista 
of old----
    Mr. Lewis. Yes.
    Mr. Wofford [continuing]. Which is just the living 
allowance----
    Mr. Lewis. Right.
    Mr. Wofford [continuing]. And they don't get any 
administrative money for their projects.
    There is the standard AmeriCorps new grant which was living 
allowance plus education award plus administrative program 
money to those local programs----
    Mr. Lewis. And health insurance, if requested.
    Mr. Wofford [continuing]. Which got us up to 17-, 18-, 
$19,000.
    The education award would be a third mode which would be 
just the $5,000.
    Mr. Lewis. Correct, correct.
    Mr. Wofford. So there would be gradations on the spectrum, 
but a State commission would have the flexibility to look at 
those three models and put together its own package in their 
own State staying within budget.
    Mr. Lewis. When you have a broad spectrum of proposed 
programs in an already reasonable comprehensive program with a 
lot of baggage, without very clearly outlined means of 
measuring results, that leaves off from the major questions out 
here in difficult appropriations years where people have great 
difficulty, especially late at night, justifying on the floor 
over it. ``You are doing what?''
    But in the meantime, I would like to move just for a 
moment. We do have additional questions here that are follow-up 
and clarification, if you would help us with those, but I would 
like to get us at least for a short time--and frankly, Rod, I 
am not sure what your own schedule is, but I am thinking about 
pursuing this just for a little while and maybe concluding our 
sessions. Are you up for that?
    Mr. Frelinghuysen. Absolutely.
    Mr. Lewis. All right. I think maybe it would be helpful to 
you as well as to our conflicting schedules.

                presidents' summit for america's future

    On January 24, 1997, the Presidents' Summit for America's 
Future was announced by President Clinton and former President 
Bush.
    The summit which will be held on April 27 through 29 in 
Philadelphia is aimed at bringing America to a new level of 
commitment to volunteer service, especially targeting the 
Nation's young people.
    Former Presidents and First Ladies have agreed to 
participate in the summit. President Clinton and former 
President Bush will serve as honorary co-chairs of the summit. 
Colin Powell will serve as general chairman, and Henry Cisneros 
will serve as vice chairman.
    Funding for the summit is to be provided by nonprofit 
organizations and businesses.
    What are the roles of the Corporation and the Points of 
Light Foundation in this effort? First question.
    Mr. Wofford. George Romney, just before he died, came to 
see Bob Goodwin, the head of the Points of Light Foundation, 
and me to say, ``I have this dream of a summit of all the 
living Presidents.'' The recorder needs to make sure it is 
``Presidents,'' plural, the apostrophe after the ``s,'' to show 
that its service is nonpartisan, to show that you need a 
strategy for service, to take a quantum leap in civic action to 
show that you can deal with critical problems, particularly of 
young people.
    The board of the Corporation and the board of the Points of 
Light Foundation agreed to sponsor this kind of a summit. We 
went to President Bush and to President Clinton, and both 
agreed.
    It was harder to get General Powell to agree, He is ready 
to put a great part of his life for the next three years or 
five years into this if he can be convinced it will turn the 
tide for millions of young people heading into disaster now. He 
says that, ``If you take five goals that every child ought to 
have, that every parent wants their own children to have, and 
design a strategy and use the summit as a start-up, a kickoff 
for a campaign to see that every child in an American family 
has those five goals, I'll throw my life into it.''
    They are a tutor, a mentor, a coach, a caring adult in the 
life of every child that doesn't have one in their family or 
needs one; safe places in which there are structured, 
challenging non-school-hour activities for the latch-key world 
of kids and others; three, a healthy start, immunization and 
incentive behavior--good incentives for healthy behavior, 
against drugs, fourth, effective education that gets people to 
read and gives them experience in school-to-work and workforce, 
so they will be productive workers and good citizens; and 
fifth, that every young person will be asked to serve to give 
back, not just be served. The summit is organized around those 
five goals.
    The General, who is chairing it, wants to have measurable 
targets for each goal. One of the targets might well be the 1 
million volunteer tutors. Summit organizers already know they 
want at least 1 million mentors added to Big Brothers, Big 
Sisters, and all the other mentoring programs.
    We are in the process of seeking commitments from 
corporations and organizations coming to the summit. What is 
the role of our two organizations and the corporation? We were 
the initiators of it. A joint committee of our two boards is 
the Steering Committee, headed by Ray Chambers, who is the 
first head of the Points of Light Foundation.
    We now have a chairman who is very actively chairing it in 
General Powell. Summit organizers are intending a post-summit 
campaign toward those five goals. We will not as a corporation, 
as a Government entity, be part of that organizational 
structure because that will be an independent sector-organized 
campaign chaired by General Powell, AmeriCorps, our service 
learning programs, our senior programs, are right now 
interested in all five of those goals, and if there is an 
effort to get far greater support for action at the local level 
toward those goals, we will want to do our part to actively 
show that citizens service in the various forms supported by 
the corporation can be part of the strategy to reach those 
goals.

                          corporation's goals

    Mr. Lewis. You have very efficiently taken my next 
question, which is, as I understand it, the summit's goal is to 
mobilize millions of citizens and thousands of organizations 
from all sectors in order to ensure that all our youth have 
access to fundamental resources that can help them lead 
healthy, fulfilling, and productive lives. The goals of the 
summit are consistent with the Corporation's mission, aren't 
they?
    Mr. Wofford. Yes. The Corporation, under the Act, is 
supposed to try to engage people of all ages to serve. Our 
Senior Corps' statement of purpose are very close to what the 
summit's goals are. The mission of AmeriCorps is set in the 
statute, and own strategic plan embodies all of those goals.
    Mr. Lewis. Okay. I thought your answer would be yes, but--
--
    Mr. Wofford. Yes, yes.
    Mr. Lewis [continuing]. In fact----
    Mr. Wofford. Yes.
    Mr. Lewis. Senator, in fact, I am sure that some people 
would say--perish the thought anybody on the floor would 
suggest this, but some people would say that this is a better 
method of stimulating volunteerism than the Corporation. What 
would you say to statements like that, presuming that you put 
on your other hat and you actually kind of step down?
    My House would not like that. Let's say that you decide to 
shift the hats and you are actually on the House floor and 
somebody made such a statement. What would you say in response 
on the floor?
    Mr. Wofford. I don't think I have privilege of the House 
floor.
    Mr. Lewis. Well, in the meantime.
    Mr. Wofford. No. Excuse me. I might. Who knows? You have 
very generous traditions, very generous tradition as shown 
especially by the weekend of civility up in Pennsylvania.
    I would go back to George Romney's argument which not only 
do I share, but I am in this job not because I like something 
called the Corporation for National Service or any one of its 
particular programs, but because many years of my life have 
been devoted to cracking the atom of civic power to show that 
you can actually solve problems, that volunteerism is not a box 
where people do good--but are not taken seriously and are 
thought to be out on the periphery--but that the combination of 
the leadership of the sectors of our society with citizen 
action, the twin engines of full-time service and millions of 
unpaid volunteers can actually achieve goals. I would like 
those like the Speaker, who says he wants every American to 
work one day a month as a volunteer, to think through how that 
could be organized without a large cadre of full-time people 
arranging the Habitat houses, the construction, the site, ready 
to give leadership when the unpaid volunteers come.
    Same with tutoring. You can't flood into a school 
occasional unpaid volunteers if there is not an infrastructure, 
a structure there, and the programs of our Corporation, I 
think, can be very useful. They are not the only ones.
    The Jesuit Volunteer Corps, the Lutheran Volunteer Corps, 
for example, give full-time service, and they will be able to 
get our educational-only awards now, without going through all 
the grant-making process that the AmeriCorps system has 
generally had in the beginning. I think the summit offers an 
historic opportunity to show that service by the different 
sectors of our society, including the volunteer sector, can get 
things done that need to be done.
    Mr. Lewis. Senator, do you envision that any new or 
additional Federal funds would be needed to address the 
concerns that are likely to be developed at the summit?
    Mr. Wofford. I think, Mr. Chairman, with the job ahead to 
make the case for 11,000 additional corps members to achieve 
one of the goals of the summit, the extra volunteer tutors, is 
a big enough challenge for me in the foreseeable future.
    Mr. Lewis. You are going to wait until after the summit, 
then.
    Mr. Wofford. Big enough challenge for the foreseeable 
future.
    Mr. Lewis. All right. I expected that response, but in the 
meantime--and I understand it.

                    aguirve international evaluation

    Senator Wofford, in your general statement, there is 
mention of the 1996 independent evaluation of the AmeriCorps 
program by Aguirve International, headed by President Ford's 
Commission of Education.
    Of course, some things done in the AmeriCorps program, I 
guess with a variety and mix of backgrounds, levels of pay, et 
cetera, it is not a simple thing to measure. Nonetheless, the 
programs obviously, as I have stated and you have stated, need 
to be measured.
    What are the three most significant findings of the Aguirve 
evaluation?
    Mr. Wofford. Our director of Evaluation is here, Lance 
Potter, and I think he could state that better than I.
    Mr. Lewis. Mr. Potter, would you identify yourself for the 
record?
    Mr. Potter. Yes. My name is Lance Potter. I am director of 
Evaluation for the Corporation for National Service.
    First, let me say that this----
    Mr. Lewis. I am sure you have got a dozen, but we are 
looking for three.
    Mr. Potter. Let me say that the study being done by Aguirve 
International is continuing, and it is a very rigorous study of 
a random sample of AmeriCorps programs.
    Mr. Wofford. Originally about 10 percent?
    Mr. Potter. It is a little more than 10 percent.
    They have found that the impacts of AmeriCorps are 
substantial. First one of the key findings is every single 
program they visit is producing tangible, demonstrable impacts 
in their community. They are all getting things done, which in 
and of itself is an unusual and significant note.
    I think one of the most significant areas related to what 
Senator Wofford is speaking about is in the area of community 
strengthening and developing relationships in communities.
    AmeriCorps has been, I think, exceptionally successful. The 
number of partnerships that AmeriCorps programs have developed 
among nonprofit organizations in their communities, their 
ability to essentially find more sufficient ways of bringing 
large groups of people together working on community problems 
has been cited over and over again as remarkable, in 
communities.
    AmeriCorps is also having, I think, very significant 
effects on the members themselves. The information that we are 
collecting suggests that being in AmeriCorps can change 
people's lives; that the people who serve are overwhelmingly 
positive about their experience. They indicate in great, great 
numbers that it has increased their intention to continue 
school, has increased their intention to volunteer in the 
future, and has significantly, in ways not dissimilar from the 
Peace Corps, broadened their perspective on the role of 
citizenship and their part in society.
    That is it in a nutshell.
    Mr. Lewis. Thank you, Mr. Potter. Probably, you should 
extend in responding to this next question as well. Have there 
been other independent evaluations of the AmeriCorps program 
during the past year?
    Mr. Potter. There have.
    Mr. Lewis. Okay. And if so, can you give us an idea, maybe 
off the top--but also for the record--what their significant 
findings were, separate from the Aguirve evaluation?
    Mr. Potter. Well, there are a couple of things I could 
point to. Let me say that benefit cost studies are an area 
where more independent research or research independent of the 
Corporation entirely have been funded. Those have shown pretty 
consistently $1.60 to $2.40 of return for every dollar 
invested, every Federal taxpayer dollar invested.
    We will release a study this summer. I expect it will be in 
that range as well. The other independent studies have focused 
more on implementation of AmeriCorps than on its impacts to 
date. As you noted earlier, it is very difficult midway through 
the third year of a program to assess impact, and most of the 
other studies have implementation issues.
    Mr. Wofford. Service learning has had a very significant 
study done.
    Mr. Lewis. You will appreciate that one of the reasons for 
probing is because I note with interest the complexity of 
programs as they are developing and moving forward. The 
measurement of those programs and their complexity is very 
important to us when competitive dollars are a reality, and I 
am really interested in your moving as quickly as you can to 
the results side and being as firm as possible, for it adds to 
credibility rather than otherwise, and these programs--all of 
our programs in this bill are being challenged on the floor, 
and for all the right reasons, I might add.
    Mr. Wofford. The amount of money is smaller, but maybe 
Susan Stroud or Lance Potter--Susan Stroud, counsel and senior 
adviser on Education who is running our Learn and Service 
Program, would speak on the major study that has been done on 
service learning, or Lance, whoever is----

                 evaluation of program through studies

    Mr. Potter. I will continue. I want to mention to the 
chairman that the corporation is very aggressive, in fact, its 
use of total dollars to evaluate its own programs. At the 
present time, you know there are 14 studies underway. A great 
majority of them are aimed at the very purposes to which you 
refer.
    The study that Senator Wofford made reference to is of 
higher education programs and showed significant impacts on a 
very wide range of variables for the young people serving in 
these programs. They are relatively low-intensity programs by 
the standards of, AmeriCorps. A study that we are now reviewing 
on K-through-12 programs engaged in service learning, will also 
be of great interest.
    Mr. Lewis. One more question, and then I will turn to my 
colleague. This is pretty simple.

                    alliance for catholic education

    On page 3 of the statement, there is mention of a Learn and 
Service America, a higher education grant with the Alliance for 
Catholic Education, ACE, in a number of cities in the Southern 
States.
    You indicated that ACE and the University of Notre Dame are 
matching every Corporation dollar with $13. Do you believe this 
effort would exist without the AmeriCorps grant?
    Mr. Wofford. I believe that the Notre Dame colleagues who 
came to say that the AmeriCorps program had inspired them to 
think about how to do this would say that the assistance in 
AmeriCorps was the stimulus to their being invented in this 
respect. I think Father Hesburgh, who brought them to see me 
quite a while ago when they were first incubating the idea, 
would say exactly that.
    Mr. Lewis. Okay. I have a number of questions like that, 
that are relatively straightforward, but in some ways, help us 
evaluate from various angles that I will submit for the record.
    Mr. Frelinghuysen.
    Mr. Frelinghuysen. Just a couple of other questions. On 
page 13 of your February 1997 submission to Congress, your 
larger fiscal year 1999 budget estimate----
    Mr. Wofford. Which page?
    Mr. Frelinghuysen. Page 13.
    You say here, ``AmeriCorps grant programs''--this is in the 
center of page 13--``are not entitlements. No program is 
guaranteed funding, and all programs must compete at either the 
State or national level.'' Can we talk for a few minutes about 
the different programs that are funded?
    Then, on page 17, you talk about the fact that, and I 
quote, ``In fiscal year 1997, as another year, there is no 
precise methodology to predict the number of programs that will 
receive funding through the various funding streams. The 
reason, of course, is that most grants, including renewals, are 
made on a competitive basis,'' and then, below, you basically 
outline what you anticipate will be the number of programs 
under the State Formula Program, under the State Competitive 
Program, under the National Direct Program and under the set-
aside.
    Aren't you basically giving us a pretty good forecast of 
what will be the eventual number of grantees?
    Mr. Wofford. Right now, the----

              state formula and state competitive programs

    Mr. Frelinghuysen. It is fairly specific on page 17, under 
the State Formula Programs, the State Competitive Programs. 
This is in the center of page 17 of that same booklet.
    Mr. Wofford. The statute provides that one-third of the 
grants go by State formula. It provides that one-third go 
through this competitive formula. I believe I am right. It is 
in the statute. One-third goes to National Direct on which a 
cap was set that we hope very much will be removed because it 
is greatly diminishing the ability for the major national 
nonprofits, like Boys and Girls Clubs and Habitat for Humanity 
and Red Cross to have multi-State programs. They don't want to 
have to go through many different State commissions in that 
whole process.
    I can't predict how many State grants there will be because 
they will just----
    Mr. Frelinghuysen. Your document appeared to have already 
made some of those projections.
    Mr. Wofford. This is an estimate based on the past track 
record. We could see larger programs in National Direct or 
smaller ones at the State level, but we have to have some basis 
for planning.
    Mr. Frelinghuysen. The reason I ask is that----
    Mr. Wofford. Oh, I see. Excuse me. I didn't read your last 
sentence that caused your question.
    Mr. Frelinghuysen. Yes.
    Mr. Wofford. In each case, they would say, this is an 
estimate that is based on the past track record.
    Mr. Frelinghuysen. All of us here have served in local 
government, and I do know that the issue always comes up that 
sometimes groups, nonprofits, with the best of motives, the 
finest records of achievement often consider that they own a 
particular contract or a right to provide a service.
    I take you at your word that when there were some 
identifiable problems with the IG that you have weeded out some 
of the bad players.
    Mr. Wofford. That is not saying they were not renewed, not 
necessarily all for that reason.
    Mr. Frelinghuysen. Some of the points in there, and I won't 
read them into the record, but they are in obviously some 
record somewhere, some of the things that did occur appeared to 
me to mirror some of the things that the CETA program had a 
number of years ago and other job employment programs had, and 
I just want to have a higher level of assurance that when there 
are identifiable problems that those agencies that have 
problems will weed it out and not somewhat protect it just 
because of, let's say their power and prominence in the 
community.
    Mr. Wofford. Yes, to that with all my conviction.
    For the first time now, the State chairs of these 
commissions are meeting. We have worked very actively with the 
State executive directors to share that responsibility. In many 
cases, the State commissions have been the ones closer to the 
ground who have taken the action.
    Sometimes we, through our evaluation system, learned about 
it, or our inspector general did, but the State commissions 
have been very responsive.
    May I also add that we have two occasions when this happens 
routinely. Each of these three-year projected grants has to be 
renewed each year, and in that renewal process, there is a 
review. Then, at the end of three years, they have to recompete 
with any other new applicants for the pot of State money or for 
the National Directs, and we are just at the stage of 
recompetition, because it is the third year, for most of our 
AmeriCorps programs.
    Mr. Frelinghuysen. Well, I appreciate that clarification. 
Thank you, Senator.
    Thank you, Mr. Chairman.

                      proposed legislative package

    Mr. Lewis. Thank you, Mr. Frelinghuysen.
    Mr. Wofford, just a couple more questions, really for the 
record or really for this record. The specific authorization of 
the Corporation expired at the end of the fiscal year 1996. 
There was general authority in the 1993 Authorization Act to 
extend the Corporation for an additional year until the end of 
1997. When do you anticipate that the administration's proposed 
legislative package will be sent up to Congress?
    Mr. Wofford. We are meeting with Chairman Goodling and 
Chairman Jeffords, on both sides of Congress, to agree upon a 
schedule. We very much want serious and successful 
consideration of reauthorization.
    How soon we will actually put in a bill or proposed 
changes, I am not prepared to say that until I have at least 
had my session with Senator Jeffords.
    Mr. Lewis. Senator, I think you can appreciate this. I am a 
little disconcerted by general authorization extensions that 
essentially rationalize the delaying of work on the part of 
authorizing committees who, in turn, love to point to the 
Appropriations Committee, for they are constantly getting in 
the authorizing business.
    Frankly, we are interested in appropriating and evaluating 
dollars, et cetera, rather than doing that other work.
    When I last year suggested to my staff, my chief of staff 
on this subcommittee, that perhaps this go-around we would 
not--would not appropriate any money for any program that was 
not reauthorized, not just extended, but reauthorized, he kind 
of turned white and said, ``Do you have any idea of how much of 
your bill would not be spending any money?'' It is a huge 
percentage, but it is not healthy for any of us.
    Mr. Wofford. I agree with that.

                              gender chart

    Mr. Lewis. A curiosity in your charts has caused me to 
scratch my head, and I guess it would cause others. It is that 
chart that relates to percent of members who happen to be male 
and happen to be female, your gender chart. At this moment, it 
appears the pattern is taking us rather quickly to 68 percent 
and above who happen to be of a gentle gender.
    I am really curious about that pattern, and I am wondering 
if you have any idea as to why that is occurring. I am sure 
your recruitment does not involve just reaching for women. Can 
you explain?
    Mr. Wofford. We are curious. We are exploring why. We have 
had focus groups. We have got some very good minds working on 
it.
    Our National Civilian Community Corps, in which we are 
directly responsible for recruiting and selection, is trying to 
figure out how we reverse this pattern to get a balance.
    Apparently, the Peace Corps, I believe I have learned, has 
gone over to a majority of women. In my day, it was one-third 
women, and we were working very hard to get women in it.
    There is a tendency for men to be appealed to more by the 
Back County Trail Project of the California Conservation Corps. 
I would say that was two-thirds men when I visited them.
    The strenuous programs I would think would appeal to women 
as much as to men, the same way I would think the challenge of 
being a tutor----
    Mr. Lewis. Not the women I know.
    Mr. Wofford. Well, if my wife had seen the beauty and the 
excitement there, she would have loved it.
    On the other side, as you know, the service industry, 
teaching, for example, has had a predominance of women, and 
two-thirds of our--more than half, going on two-thirds of our 
assignments are in education, which may be a factor.
    Our new public affairs ads are specifically targeted to 
men.
    Mr. Lewis. I don't know what the experience of the Peace 
Corps has been. I wonder if the gender breakdown follows these 
patterns or not. We may as an aside ask that question to see if 
we can conclude----
    Mr. Wofford. I know the proportion of women has greatly 
increased from the first years of the Peace Corps. Just what it 
is now, I don't know.
    Mr. Lewis. I will pursue that, just because it is----
    Mr. Wofford. Well, we are pursuing it, also. We are 
pursuing the challenge here to keep a balance. The balance is 
much better.
    Mr. Lewis. I did have some additional questions relative to 
a number of reports that are emanating from the inspector 
general's office, but the specific area of interest related to 
the auditability of the trust fund, but frankly, their 
information came to us just last night. So we haven't really 
had a chance to look.
    I might mention for the record an item that is relatively 
new for this committee, and I hope we can send this to other 
committees.

                   partnership with inspector general

    I have become very impressed with the potential of our 
forming an effective partnership with our IG's around. I am 
very concerned, for example, at housing programs across the 
country and what may be happening in urban America, and the 
IG's have done their work, but their reports have kind of, in 
some way, fallen off the cliff at HUD. We intend in a very 
positive way to ask the IG's to help the committee, especially, 
and in connection with your program, looking at some of those 
other analyses that are being done and getting their 
independent-for-Congress input, I think, could be valuable to 
us as go forward.
    Mr. Wofford. We do, too, with her reports, and on the 
National Service trust, the problems that that exploration of 
an audit developed in the report that we sent to you. Those 
problems are like the problems of the '99 recommendations. It 
is the same organization, and it had the same problems, and we 
are going to be scrubbing those numbers in the education trust 
to the very best of our ability and with the utmost concern and 
priority.
    Mr. Lewis. Ms. Cunningham and others, I am sure, will be 
pleased to hear that this will be probably the last time for 
the record that we suggested our problems relate to Vista and 
Action and others, but rather, Service Corps had a little time 
in the saddle here.
    Mr. Wofford. Yes, indeed.
    Mr. Lewis. All the problems will be Service Corps' problems 
from this point forward, National Service Corps' problems.
    Mr. Wofford. And that trust, except insofar as you could 
pin it on the structures and the systems that were inherited, 
it is on the Corporation's watch, of course.
    Mr. Lewis. Right. We do have additional questions for the 
record, largely from those members who have had conflicting 
circumstances. I would ask my staff to notify the other members 
that we are concluding our hearings for this go-around at 
least, and if they do have questions, to submit them for the 
record.
    In the meantime, Mr. Frelinghuysen, do you have an 
additional question or comment?

               district of columbia nccc deployment site

    Mr. Frelinghuysen. Just for the record, what is the present 
deployment site for the District for the National Civilian 
Community Corps (NCCC)? The budget request will cover the cost 
of making the current District of Columbia NCCC deployment site 
a permanent campus.
    Mr. Wofford. Fred Peters, the head of the NCCC, would you 
state your plans about the site in or near the District?
    Mr. Frelinghuysen. Mr. Peters? Is that Fred?
    Mr. Peters. Fred.
    Mr. Frelinghuysen. Thank you.
    Mr. Peters. We have got a temporary site in the District. 
At this time, it is located at Fort Belvoir, Virginia. We do 
work in the District. The idea was to find a place where we 
could house corps members that would not be of great cost to 
us. We have an arrangement with the Department of Defense that 
allows us to utilize military installations, if they are 
available.
    They are located in old World War II buildings, a temporary 
arrangement. We rotate teams of 10 to 12 corps members, and 
there are 55 total.
    Next year, what the budget reflects is that that will 
become a permanent campus, and raise that 55 to 100. We have 
got many things that we would like to do in the District, and 
as you know well the many compelling needs in the District.
    We are trying to find a location in the Washington area 
that will house that 100 people, and we have got the Department 
of Defense helping us. The intent is to raise that number to 
100 corps members here in the District, and they will do work 
in the District of Columbia, the State of Virginia, and Western 
Virginia.
    Mr. Frelinghuysen. We have how many of these campuses 
nationally?

                          nationwide campuses

    Mr. Peters. We have now five campuses. We have one at Perry 
Point, Maryland that is located at a VA hospital. It is a small 
one, 55, 60 corps members. In Charleston, South Carolina, that 
is about 265. We have got Denver, Colorado, an old Air Force 
base, Lowery Air Force base, and then San Diego, California.
    Mr. Wofford. I think we would maybe like to put in the 
record an account of what we are doing in the District of 
Columbia, including the NCCC, if we could add that to the 
record.

[Pages 292 - 311--The official Committee record contains additional material here.]


    Mr. Lewis. Well, I would appreciate your broadening that 
addition in the record to include this comment.

                               conclusion

    I wouldn't want to close this session without mentioning 
the rather phenomenal session that the House of Representatives 
had in Hershey, Pennsylvania last weekend. Virtually, all the 
members who are in attendance today participated in that 
weekend session, and it was one of the more positive and 
stimulating and exciting activities that I have been involved 
in, in the many, many years I have been involved in public 
affairs, about 220 members of the House coming together, 
reflecting a whole spectrum of members, but committing 
themselves to dialogue, rather than some of the shrilled lack 
of dialogue that we have seen by way of C-SPAN for some time 
now. It is a very positive development that needs to be 
extended in many ways.
    Some, including myself, were heard to say that small steps 
at bipartisanship and nonpartisanship are much better than 
gigantic steps that fail, and one of the elements that came 
forward is a ``small step.'' It involves the Speaker's vision 
of a shining city on the Hill; that the Nation's Capital is 
going to be the Nation's Capital whether we improve upon its 
condition or not, but, indeed, if all of us decide to come 
together on this one and insist that the Nation's Capital be a 
place that we all can be proud of, and indeed, beginning with 
the citizens who live in the District, a place that is safe, 
where the schools function well, where the children compete in 
all other brackets of education as they already compete in 
their music skills, the orchestra for young people where 
parents are involved, that is worldwide recognized and renown, 
it can be done in the District, a small step towards seeing 
what nonpartisanship and working together can do.
    I would commend it to the National Service Corps. There is 
going to be a lot of action here in the next several months and 
I think several years that bode very well for attempting to 
extend what could eventually be judged only as rhetoric at 
Hershey. I have the hope that it is a lot more than that.
    So we have gone through this process today and gave you 
more than, I gather, what happened in the other body, but 
probably more than you really wanted.
    Mr. Wofford. No, no. I can't say how much we appreciate 
these hours and the concern and the questions. It has been 
wonderful.
    Mr. Lewis. Well, it is a pleasure to be with you, and we 
look forward to working with you all. Thank you for coming.
    The meeting is adjourned.

[Pages 313 - 605--The official Committee record contains additional material here.]







                           W I T N E S S E S

                              ----------                              
                                                                   Page
Johnson, Gary....................................................     1
Witt, J. L.......................................................     1
Wofford, Harris..................................................   131








                               I N D E X

                              ----------                              

                  Federal Emergency Management Agency

Assistance to State of Kentucky:
                                                                   Page
    Flooding in Kentucky.........................................    53
    Location of Kentucky Disaster Field Office...................    53
    Making Additional Assistance Available.......................    54
Assistance to State of North Carolina:
    FEMA's Role in North Carolina Disasters......................    39
    Hazard Mitigation Funds for North Carolina...................    43
    N.C. Recovery Task Force Recommendations.....................    42
Chemical Stockpile Emergency Preparedness Program:
    CSEPP........................................................    65
    DoD as a Partner.............................................    67
Climate Forecasting..............................................    50
Closing Remarks..................................................    75
Counter-Terrorism Funds..........................................    73
Director's Opening Remarks.......................................     2
Disaster Assistance:
    1998 Disaster Relief Estimates...............................    24
    Budget Supplemental..........................................    25
    California Hospital Medical Center...........................    38
    Disasters in Midwest.........................................     4
    Disaster Insurance...........................................    38
    Disaster Obligations.........................................    24
    Disaster Projections.........................................    72
    DRF Efficiencies.............................................    29
    Levee Problems...............................................    20
    Need for Efficient Response..................................    20
    Public Assistance Appeals....................................    62
    Recent Disasters.............................................    26
    Remaining Requirements from California Earthquakes...........    73
    Snow Removal Policy..........................................    44
Disaster Assistance Direct Loan Program:
    Disaster Loans...............................................    66
    Disaster Loan Program........................................    64
Emergency Equipment:
    Budget for Equipment Updating and Replacement................    51
    Emergency Equipment Replacement..............................    32
    Surplus Equipment............................................    36
Executive Direction:
    Assessing Priorities.........................................    52
    Minority Contracting.........................................    46
    Submission of Congressional Reports..........................    22
    Workplace Diversity..........................................    45
Fiscal Year 1998 Budget Request..................................   130
Flood Program:
    Borrowing Authority for the Flood Program....................    30
    Flood Insurance Deductible...................................    58
    Flood Insurance Rates........................................    69
    Flood Insurance Requirements.................................    36
    Flood Losses and Collections.................................    70
    Flood Mapping................................................    55
    Insurance Legislation........................................    59
    Marketing of Flood Insurance.................................    56
    Subsidized Policies..........................................    57
    Working with Insurance Agents................................    58
Mitigation:
    Hazard Mitigation Grants.....................................    33
    Mitigation Programs..........................................    68
    Value of Mitigation..........................................    28
Need for Additional Urban Search and Rescue Teams................    31
Pre-Disaster Mitigation Program:
    Pre-Disaster Mitigation......................................    34
    Pre-Disaster Mitigation Concept..............................     3
    Pre-Disaster Mitigation Pilot Projects.......................    44
    Legislative Authority for Pre-Disaster Mitigation............    74
    Spending Plan for Pre-Disaster Mitigation....................    48
State and Local Assistance:
    Budget for Preparedness, Training and Exercises..............    71
    Comments from States.........................................    49
    Cost Share for State and Local Grants........................    71
    Performance Agreements.......................................    67
    State and Local Assistance vs. Pre-Disaster Mitigation.......    35
    State and Local Programs.....................................    32
Subcommittee's Opening Remarks...................................     2
U.S. Fire Administration:
    Arson........................................................    61
    Funding for the Fire Academy.................................    63
U.S.G.S. Mapping.................................................    22

             Corporation for National and Community Service

Accomplishments of National Service..............................   133
Administrative Costs on Grants...................................   263
Alliance for Catholic Education--Notre Dame......................   286
America Reads........................................136, 232, 321, 337
    Broader Expansion into Literacy..............................   240
    Budget.......................................................   259
    Department of Education Funding.......................237, 238, 240
    Legislative Authority........................................   236
    Legislative Proposals........................................   233
    Literacy and Existing School Systems..................241, 256, 313
    Role of Tutors to Teachers...................................   245
    Skills of Work-Study Students................................   242
    State Commissions on National Service........................   239
AmeriCorps Cash Award............................................   341
AmeriCorps Member Stipend......................................244, 335
AmeriCorps Recruitment...........................................   341
AmeriCorps Structure.............................................   243
AmeriCorps* National Programs for 1996...........................   264
AmeriCorps* NCCC District of Columbia Deployment Site............   291
AmeriCorps* NCCC Expansion.......................................   342
AmeriCorps* NCCC Nationwide Campuses.............................   291
AmeriCorps*State Formula and State Competitive Programs..........   287
AmeriCorps*State Programs for 1996...............................   266
AmeriCorps*VISTA Literacy Corps..................................   254
Audit Process....................................................   246
Audit Recommendations from Arthur Andersen.......................   248
Budget Estimate..................................................   159
Budget Request............................................132, 235, 258
California Conservation Corps....................................   253
Carryover Funds..................................................   259
Competition for AmeriCorps.......................................   340
Completion Rate of AmeriCorps Members..........................251, 252
Conclusion.......................................................   312
Cost Per Peace Corps Volunteer...................................   249
Cutting Costs and Improving Efficiency..........135, 250, 278, 317, 333
Decentralized System of National Service.........................   277
Demographics of AmeriCorps Members...................134, 153, 289, 324
Disaster Relief..................................................   134
District of Columbia National Service Projects...................   292
Diversity in Agency..............................................   234
Education and National Service...................................   133
Education Award Usage............................................   251
Elimination of AmeriCorps Grants to Federal Agencies...........260, 262
Evaluation by Aguirre International..............................   284
Evaluation of Program Through Studies............................   286
Financial Management......................................135, 316, 333
Grant-Making Process...........................................260, 318
Health Insurance for AmeriCorp Members.........................255, 335
Inspector General's Findings.....................................   277
Leveraging Volunteers............................................   134
Matching Funds...................................................   317
Measurable Outcomes..............................................   253
National Service Scholars......................................279, 315
National Service Scholars and Education Awards...................   280
National Service Trust...........................................   249
``Paid Volunteers'' Misnomer.....................................   257
Partnership with Inspector General...............................   290
Partnership with States..........................................   335
Presidents' Summit on America's Future.........................258, 282
    Corporation for National Service Involvement.................   283
Prohibition on Political Activity................................   337
Questions for the Record.........................................   313
Reauthorization of the National Service Acts...................137, 288
Reinvented Government............................................   134
Selection of AmeriCorps Members..................................   250
Selective Service Agreement with AmeriCorps......................   246
Service-Learning Program.........................................   237
Three Types of Funding...........................................   281
Training and Technical Assistance................................   319
Welfare Reform and National Service..............................   324
Written Testimony................................................   138