    [House Hearing, 106 Congress]
    [From the U.S. Government Publishing Office]

     DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED

                        AGENCIES APPROPRIATIONS FOR 2000

    _______________________________________________________________________

                                    HEARINGS

                                    BEFORE A

                               SUBCOMMITTEE OF THE

                           COMMITTEE ON APPROPRIATIONS

                             HOUSE OF REPRESENTATIVES

                           ONE HUNDRED SIXTH CONGRESS
                                  FIRST SESSION
                                    ________

      SUBCOMMITTEE ON THE DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE
                        JUDICIARY, AND RELATED AGENCIES

                        HAROLD ROGERS, Kentucky, Chairman
     JIM KOLBE, Arizona                 JOSE E. SERRANO, New York
     CHARLES H. TAYLOR, North Carolina  JULIAN C. DIXON, California
     RALPH REGULA, Ohio                 ALAN B. MOLLOHAN, West Virginia
     TOM LATHAM, Iowa                   LUCILLE ROYBAL-ALLARD, California
     DAN MILLER, Florida
     ZACH WAMP, Tennessee

     NOTE: Under Committee Rules, Mr. Young, 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.
        Jim Kulikowski, Jennifer Miller, Mike Ringler, and Cordia Strom,
                               Subcommittee Staff
                                    ________

                                     PART 5
                                                                       Page
     Secretary of Commerce............................................    1
     United States Trade Representative ..............................  209
     Bureau of the Census.............................................  265
     National Oceanic and Atmospheric Administration..................  339

                                    ________

             Printed for the use of the Committee on Appropriations
                                    ________

                         U.S. GOVERNMENT PRINTING OFFICE
     57-729                     WASHINGTON : 1999

                            COMMITTEE ON APPROPRIATIONS

                       C. W. BILL YOUNG, Florida, Chairman

     RALPH REGULA, Ohio                     DAVID R. OBEY, Wisconsin
     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                STENY H. HOYER, Maryland
     TOM DeLAY, Texas                       ALAN B. MOLLOHAN, West Virginia
     JIM KOLBE, Arizona                     MARCY KAPTUR, Ohio
     RON PACKARD, California                NANCY PELOSI, California
     SONNY CALLAHAN, Alabama                PETER J. VISCLOSKY, Indiana
     JAMES T. WALSH, New York               NITA M. LOWEY, New York
     CHARLES H. TAYLOR, North Carolina      JOSE E. SERRANO, New York
     DAVID L. HOBSON, Ohio                  ROSA L. DeLAURO, Connecticut
     ERNEST J. ISTOOK, Jr., Oklahoma        JAMES P. MORAN, Virginia
     HENRY BONILLA, Texas                   JOHN W. OLVER, Massachusetts
     JOE KNOLLENBERG, Michigan              ED PASTOR, Arizona
     DAN MILLER, Florida                    CARRIE P. MEEK, Florida
     JAY DICKEY, Arkansas                   DAVID E. PRICE, North Carolina
     JACK KINGSTON, Georgia                 CHET EDWARDS, Texas
     RODNEY P. FRELINGHUYSEN, New Jersey    ROBERT E. ``BUD'' CRAMER, Jr.,
     ROGER F. WICKER, Mississippi              Alabama
     MICHAEL P. FORBES, New York            JAMES E. CLYBURN, South Carolina
     GEORGE R. NETHERCUTT, Jr.,             MAURICE D. HINCHEY, New York
    Washington                              LUCILLE ROYBAL-ALLARD, California
     RANDY ``DUKE'' CUNNINGHAM,             SAM FARR, California
    California                              JESSE L. JACKSON, Jr., Illinois
     TODD TIAHRT, Kansas                    CAROLYN C. KILPATRICK, Michigan
     ZACH WAMP, Tennessee                   ALLEN BOYD, Florida
     TOM LATHAM, Iowa
     ANNE M. NORTHUP, Kentucky
     ROBERT B. ADERHOLT, Alabama
     JO ANN EMERSON, Missouri
     JOHN E. SUNUNU, New Hampshire
     KAY GRANGER, Texas
     JOHN E. PETERSON, Pennsylvania

                     James W. Dyer, Clerk and Staff Director

                                      (ii)

    DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED
                        AGENCIES APPROPRIATIONS FOR 2000

                                  ----------

                                              Wednesday, March 3, 1999.

                             DEPARTMENT OF COMMERCE

                                    WITNESS

    WILLIAM M. DALEY, SECRETARY

                                  Introduction

        Mr. Rogers. The Committee will come to order.
        We are pleased to welcome William Daley, the Secretary of
    Commerce, who will testify on behalf of the programs and the
    fiscal year 2000 budget request for the Department of Commerce.
        The Department's budget was submitted as part of the
    President's overall budget on February 2nd of this year.
    However, we have read in the newspapers that the Department's
    budget may be $1 to $2 billion short of what will ultimately be
    requested.
        Consequently, we are in a bit of a quandary, to put it
    mildly, since we are here to consider the Department's fiscal
    year 2000 budget without knowing what the operating request for
    the Department's budget will be. I have never quite known how
    to add up numbers when there were zeroes in certain columns. We
    hope the Secretary will be able to enlighten us today on where
    things stand.
        I am sure he has brought with him the detailed requests
    that his Department is going to ask the Congress to have the
    taxpayers spend. If he does not have those numbers, I will be
    sorely disappointed and absolutely amazed.
        I might also note that the Congressional Budget Office is
    said to be releasing their reestimate of the President's budget
    request today, and it apparently has concluded that the
    President's budget request is some $30 billion in outlays over
    the spending caps that are in place for fiscal year 2000.
        What this means is that some $30 billion in outlay
    spending, which probably translates into $40 to $50 billion in
    budget authority spending, contained in the overall President's
    request, cannot be accommodated if we are to stay within the
    spending caps that are in place for fiscal year 2000. As a
    result, I do not think we can underestimate or understate the
    difficulty of the task ahead in considering the Department's
    submission.
        Before yielding to the Secretary, I will yield to my
    colleague, Mr. Serrano, for any comments he would like to make
    at this time.
        Mr. Serrano. Thank you, Mr. Chairman.
        First of all, let me thank you, Mr. Secretary, for coming
    before us today. I understand the Chairman's concerns about
    holding a hearing without numbers, but I have to remind
    everyone that often, or very rarely, does the Supreme Court get
    involved in situations that bring us to this point.
        And so I know that when all is said and done, you, Mr.
    Secretary, and your Department will give us all of the
    information we need. In fact, I suspect that when we leave here
    today we will be pleased with what we have heard.
        We also understand that no matter how much we try, today or
    any other day this year, Mr. Chairman, to get away from a
    certain issue, we cannot run away, nor get away from the facts.
    The census issue is a very difficult one to deal with for many
    people and in many cases. In most cases, it has become a very
    political issue.
        Nevertheless, it is my intent, and certainly the intent of
    most, if not all, members of this committee to see to it that
    we do the right thing, that we stick by our constitutional
    mandate. And, I personally will do whatever I have to do to
    make sure, Mr. Secretary, that you get the tools necessary to
    conduct your census the proper way and to do the work that the
    Department does, in general, in the proper way. And, I am
    looking forward to your testimony.
        Mr. Rogers. Now, Mr. Secretary, if you would like to
    summarize your statement, we would be pleased to hear from you.
    Your statement will be inserted for the record, together with
    the Department's budget-in-brief.
        Secretary Daley. Thank you very much, Mr. Chairman and
    Members of the Committee. I appreciate the opportunity, once
    again, for the third time to appear before you on behalf of the
    Department's budget. I am also very pleased to present the
    Commerce Department budget for fiscal year 2000, which will be
    the first budget of the new century.
        We have left the old century with a surplus. President
    Clinton, and I know all of the Members of the House of
    Representatives, want to enter the new one the same way.
    Without growing Commerce too much, we do want to make some key
    investments in 2000 to keep this tremendous economic success
    which we have had over the last couple of years continuing.
        Our request is for $7.4 billion. Most of the increase over
    fiscal year 1999 is for the 2000 census. In light of the
    Supreme Court ruling and the dress rehearsal evaluation, last
    week, Dr. Kenneth Prewitt, the Census Director, announced the
    broad outline of a new plan. As soon as the numbers are
    available, I will convey them to you, Mr. Chairman, and to the
    Subcommittee.
        Let me quickly highlight some of the key areas of the
    budget, first starting with the census. This is, as we know,
    the largest peace-time mobilization that this country does. It
    is an enormous management challenge to count and determine
    where every person lives on a certain date in the year 2000. We
    requested a total budget of $2.8 billion, a $1.8 billion
    increase over 1999 levels.
        Again, this was done before the court ruling in late
    January, so the request assumes the use of sampling for all
    purposes in the 2000-Census. As you well know, the court
    decision precludes sampling for the initial count, and for the
    numbers used to apportion seats for the House of
    Representatives.
        The court noted, however, that sampling techniques are
    required for non-apportionment purposes, if feasible. Dr.
    Prewitt announced last week it is feasible to use sampling to
    improve the accuracy of the final numbers. For those other
    purposes, things like redistricting and the distribution of
    Federal funds, the Census Bureau remains convinced sampling
    will improve the accuracy and should be used for all purposes
    other than apportionment, and also announced a plan that will
    make every effort to count every person.
        Conducting a census without sampling in the initial count
    will require substantially more resources. The Bureau will have
    to visit 45 million homes, up from the 30 million originally
    planned. They will need to hire more enumerators and need to
    send more people to areas with traditionally high undercounted
    areas. And more resources will be needed for promotion
    activities, paid advertising, and working in partnership with
    communities.
        I know all of us agree on this, and we need to do a better
    job than we did in 1990 when the census missed eight million
    people and overcounted four million.
        The second key area is the 13 percent increase for NOAA,
    $282 million over last year's appropriation. This increase will
    help protect our natural resources and better protect people
    and property from the enormous cost of natural disasters. Of
    that, $105 million is to support the President's Lands Legacy
    initiative.
        Today, 40 percent of our coastal waters are not fishable or
    swimmable. We want to restore coral reefs, fisheries, and
    protect our coastlines. $100 million is to reverse the decline
    in the salmon stock out West, and $42 million would increase
    the lead times and accuracy of severe weather and flash flood
    warnings and to improve our predictions of where hurricanes may
    hit.
        Let me say the modernization of the National Weather
    Service is progressing. The AWIPS is on budget. According to
    the National Weather Service, it is also on schedule.
        I thank you, Mr. Chairman, and the Subcommittee for your
    support and your enormous patience in this endeavor.
        Third, we are requesting a seven percent increase for the
    International Trade Administration. In 2000, we want to open
    new posts in 11 countries. We want to create a greater presence
    in Africa, Latin America, and add staff in the markets
    important to our exporters, such as China.
        Last year our exports dropped for the first time in more
    than a decade. Our exports to Asia plunged a staggering 14
    percent, and that huge drop accounted for over half of the
    increase in our trade deficit in 1998. Quite frankly, we need
    to do everything we can for American exporters to create new
    markets. We cannot have record high trade deficits year after
    year.
        We also want to reach out more to small businesses to
    encourage them to export, especially now that the Internet
    makes a worldwide reach so easy. We need to beef up our trade
    compliance activities. America has benefitted enormously from
    the open-trade system. Open markets do work, and we prove it.
        But not everyone has been playing by the same rules, and
    the steel situation cried out for action because countries were
    abusing our open-trade system. I believe we took very swift
    action, but we must remain vigilant and be ready to respond to
    any American industry that is a target of abuse.
        Fourth is NIST. About $55 million of the request for new
    spending is to construct the Advanced Measurement Laboratory in
    Maryland. It will enable our scientists to perform cutting edge
    research. We want to continue to have on our staff Nobel Prize
    winners and National Medal of Science winners. But they need
    and deserve state-of-the-art facilities.
        Fifth is the Economic Development Administration, where we
    want to continue fully funding important programs. We are
    requesting a $20 million increase to assist communities hurt by
    economic dislocation; $5 million of that will be for the
    Northeast where the fishing industry has been hit rather
    severely.
        Let me quickly run through some other new initiatives. We
    are asking for a $14 million increase to help public
    broadcasters transition from analog to digital broadcasting.
    The Patent and Trademark Office is expecting a seven percent
    increase in patent applications, and a 10 percent increase in
    trademark applications. Both are sure signs that our economy is
    growing.
        To meet these workload increases and improve our service to
    the customers, we will invest the increase of about $105
    million in information technology and also additional
    personnel.
        We are requesting $1.5 million for the Bureau of Export
    Administration to fund inspections of chemical facilities under
    a new international convention, and there are about 2,000
    potential sites, and the request is for inspecting at least 42
    of them. Other nations will do similar inspections to stem the
    flow of chemical weapons.
        Other requests are for increases in ATP, statistical
    improvements, research vessel support, and in preventing cyber
    attacks that could devastate companies and, therefore, have a
    most serious impact on our overall economy.
        Mr. Chairman, if I could end on a personal note. I hope to
    be the last Secretary of Commerce of this century, if all
    things go well during the next couple of hours. [Laughter.]
        I always said that this is a terrific time to serve our
    Nation. We are in the middle of the longest peace-time
    expansion in the Nation's history. But it obviously takes the
    support of this Subcommittee to make the Commerce Department
    what it is.
        I thank you, Mr. Chairman, and the subcommittee, for your
    continued support and your counsel during the last two years.
    Thank you very much, Mr. Chairman.
        [The information follows:]

                  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                      Revisions to the Fiscal 2000 Request

        Mr. Rogers. Well, thank you, Mr. Secretary, and it is good
    to have you with us. In spite of the fact that sometimes we do
    not agree on some topics, I find that you do lay things on top
    of the table, and I appreciate at least that.
        Well, I do not know, but if we do not--if we are unable
    to--get some numbers from you, there may not be a Department of
    Commerce to manage over the next two years. We are faced with a
    very surreal situation.
        On the one hand, the largest item in your budget, your top
    priority, the decennial census for which a $1.8 billion
    increase is already in the budget request, I am told may be a
    billion, or two, or maybe three short. But you do not tell us
    how much or how that shortfall would be paid for, offset, or
    whatever.
        On the other hand, we are somehow supposed to judge the
    rest of your budget, which has large increases in areas that
    are lower on your priority list, like NOAA, $280 million, a 14
    percent increase; NIST, $90 million increase, a 14 percent,
    without knowing what we are on the line for with respect to the
    Census. I do not know how we can develop a budget. I have never
    encountered this type of thing before.
        All of the time, the Administrations, Republican and
    Democrat, are happy to come here and tell us how much they want
    next year. And we are happy to listen, and then we get our
    pencils out and we figure out how much we have got to spend,
    and we figure out how much you need, come up with some sort of
    a working arrangement. But I do not know how we can do that,
    not knowing what you are asking for.
        I do not know how we can deal with the rest of your budget
    until we know specifically what you are demanding of us for the
    census, which is the biggest item. So until everything is on
    the table, and we know what we are facing, is not the budget
    for your Department just one big question mark?
        Secretary Daley. Well, there is no question, Mr. Chairman,
    that there is a very large question mark as to what the census
    will cost, by virtue of the fact of the Supreme Court decision
    about five weeks ago. We are working feverishly to get a number
    that we can have faith in, and that we can present to you as an
    accurate amount that we can stand behind.
        There is no question, as you say, Mr. Chairman, finishing a
    budget for the Department of Commerce without knowing what this
    amount may be is impossible. We do not like being in this
    situation. We are here because this is a massive undertaking,
    one that we do only every 10 years.
        And it is extremely complicated and has been complicated
    even more than probably in previous censuses by the uncertainty
    of exactly what method we would be using, by virtue of either
    Supreme Court cases or the political fight that has gone on in
    the Congress over the last couple of years.

                Department's Actions to Plan for the 2000 Census

        Mr. Rogers. But you created that confusion. In all other
    decennial censuses in the nation's history, we always knew how
    we were going to do it, and we did it--maybe flawed, maybe
    inaccurate, maybe off to some degree, but there was certainty
    there.
        And for three years now--and I have been on this
    Subcommittee for 15 years leading up to the Census: the
    aftermath of the 1980 Census, leading up to the 1990 census,
    the funding of the '90 Census, the turmoil that followed the
    '90 Census, the frustration that all of us have felt over the
    years about the fact that we cannot get an accurate count, and
    now the 10-year lead up to this Census.
        And I began on the 2000 census in 1991, saying, ``We have
    got to find ways to do it, and we have got to fund it.'' And
    for three years this Subcommittee has told you to prepare a
    backup plan in case the sampling procedure was rejected, as it
    now has been by the Supreme Court.
        We have asked you three years for that, and last year you
    and I had a shouting match about this. I am going to try to
    restrain myself this year.
        Secretary Daley. Thank you.
        Mr. Rogers. I say try.
        The law specifically required that you develop, and be
    prepared to implement, a 2000 Census which did not use
    statistical methods. The law says you have to do that. And not
    only that, we gave you $27 million to do it two years ago.
        And you have known you were going to do this for the last
    10 years. And yet here we are on--more than the eve of the
    deadline--we are past the deadline, and you come up here and
    tell us you do not know how you are going to do it yet, and we
    do not know how much it is going to cost.
        I just do not know what to do. I mean, the law is the law.
    The Congress has spoken. The Supreme Court has spoken. Both
    branches are saying, ``Get your act together. Do it.'' Now,
    what else can we do?
        Secretary Daley. Well, I think we can try to work together,
    Mr. Chairman, and we are doing that, not only with the
    Subcommittee, with the Congress, in putting together this
    enormous challenge before us. In the two years I have been
    here, this issue has taken up more time than any other in the
    Department, and, obviously, much time of the Subcommittee.
        We have planned for the census. We have prepared, as best
    as we can to this point, of preparing for a sample census.

                             Decennial Census Plan

        Mr. Rogers. Where is the plan? I mean, just give us the
    plan.
        Secretary Daley. Well, the plan that we have put forward,
    that Dr. Prewitt put forward last week, is the plan that we
    plan to go with in the year 2000.
        Mr. Rogers. But we have not seen your figures. And your
    plan uses statistical methods, something the Supreme Court has
    said you shall not do. It is illegal.
        Secretary Daley. They said it was illegal for apportionment
    purposes.
        Mr. Rogers. Yes. And that is where--let us just talk about
    the apportionment purposes for the moment. The Supreme Court
    has said, ``You cannot use statistical methods in the
    reapportionment count. You must actually count.'' Correct?
        Secretary Daley. For apportionment purposes, right, Mr.
    Chairman.
        Mr. Rogers. Yes, you must count. Now, do you have that plan
    ready?
        Secretary Daley. We have a plan that was put forward in
    January for that purpose. We are refining that based upon the
    dress rehearsal, based upon laying out the entire plan for the
    year 2000 and having a complete--we are in the process of doing
    what is called by the Census--``Master Activity Schedule,''
    which is over 4,000 items, with schedules, with deadlines. That
    is what is being finalized that will be an actual finished
    final plan.
        A lot of that, as I think I said, Mr. Chairman, last year--
    a lot of the final plan would be determined by the dress
    rehearsal and the testing of the systems and the plans and the
    management programs.
        Mr. Rogers. But we asked for this plan as long ago as three
    years. How are you going to conduct the actual count for
    reapportionment purposes? We gave you $27 million. You and I
    had this conversation last year. I asked you to leave at one
    point in time and not come back until you brought the plan. You
    still did not have the plan. That was one year ago. And here we
    are this year, and you still do not have the plan. Now, we want
    our money back.
        Secretary Daley. Well, I think after----
        Mr. Rogers. Give me the plan or give me the money we gave
    you to do the plan a year ago.
        Secretary Daley. Mr. Chairman, if I can, last spring when I
    was here and the hearing was recessed, you had asked for a
    plan. We came up and we gave you what we had at that point. We
    announced in January a plan of doing the census at the
    Congress' direction.
        It was funded through June, and we had made plans for an
    enumerated traditional--for lack of a better phrase--
    traditional census through--basically, through this political
    fight that we are having, and through the first six months of
    1999. And we are now in the final throes of trying to put
    together the final activity schedule and the absolute final
    plan that the Census Bureau is going to go with.
        Mr. Rogers. Why has it taken three years? We asked you
    three years ago for this. I asked you last year for this, and
    detailed numbers. We gave you $27 million for the plan. You
    have had all this time. We still do not have the plan. I do not
    want a broad outline. We have got to spend dollars.
        Secretary Daley. There is not a final plan--we are trying
    to develop the final plan right now. What we gave you last
    year----
        Mr. Rogers. The question is why have you not done it before
    now?
        Secretary Daley. Because we had to go through the last two
    years of testing procedures, doing the dress rehearsal. I do
    not think putting out a final plan two years before the actual
    event is the way to go. The Census Bureau could not do that and
    then not be expected to be changing that plan, based upon the
    dress rehearsal, based upon discussions with community groups
    and local officials on how we are going to proceed. This has
    been very much a work in progress.
        We are now coming down to the final plan, based upon the
    Supreme Court, based upon the dress rehearsal, based upon
    everything we have learned over the last couple of years, on
    the methods and the ideas that have been put to the Census
    Bureau, both by Members of Congress, by the scientific
    community, by local officials, by community groups around the
    country, on how best to do this census.
        I know you would like to have seen a plan that you know
    would be followed through two years later. But the fact of the
    matter is, that is not the case on this, because we are still
    trying to finalize, based upon information we have been
    gathering over the last two years, what is the best plan and
    the best method to have the most accurate count.
        And the way we thought we could do it based upon all of the
    best information we could get, has been now determined by the
    Supreme Court that we cannot move forward. So we are now taking
    that, adapting that, along with----
        Mr. Rogers. We told you three years ago to develop a plan,
    assuming that you could not use statistical sampling. We wanted
    two plans, one without sampling, one with sampling, just to be
    ready for this event. And we gave you the money to do it with,
    and here we are at the last second, and you have not done it. I
    do not know what did with the money.
        Secretary Daley. Well, we----
        Mr. Rogers. What did you do with the $27 million we gave
    you for that very purpose?
        Secretary Daley. We have expended money to plan for exactly
    what you are saying. Did we finish a complete plan? No. I mean,
    we would not have finished--if the Supreme Court had ruled not
    that sampling was illegal, but had decided it was
    unconstitutional and we had to go back, we would not have a
    plan, a complete plan with a traditional census to give you
    today. We have to go through a complete master schedule
    activity list to get ready.
        Mr. Rogers. I told you two years ago the Supreme Court
    would rule that sampling is illegal or unconstitutional. We
    gave you the money to develop an alternative plan at that time,
    in case they did. You have spent the money. We do not have the
    plan. When can we get the plan? When can we have a plan?
        Secretary Daley. Mr. Chairman, we have a plan that was--a
    summary of the plan was put out by Dr. Prewitt 10 days ago.
        Mr. Rogers. When can I have a specific plan with specific
    dollars, Mr. Secretary?
        Secretary Daley. I cannot give you an answer to when you
    will have the specific dollars at this point, Mr. Chairman.
        Mr. Rogers. Why not?
        Secretary Daley. I have tried--we are trying----
        Mr. Rogers. Because OMB says not, right?
        Secretary Daley. No. It is because we do not have the final
    number that I can give to you and say, ``Mr. Chairman, this is
    a number that I believe in''----
        Mr. Rogers. Well, when can you say that?
        Do you realize we have got to write a budget at some point
    in time? Has that occurred to you, that we have got to spend
    money for NOAA and NIST and the National Weather Service, and
    all of the other items in the Department of Commerce? Not to
    mention the Supreme Court's budget, all of the Courts, and all
    of the State Department, with our embassies around the world,
    all of the international organizations that this Subcommittee
    funds.
        When can we have your number on the census, so we can
    satisfy the Supreme Court's need for salaries and expenses, for
    example?
        Secretary Daley. I would hope, Mr. Chairman, very shortly,
    but I cannot give you a date at this time. And I cannot tell
    you with certainty exactly what date that may be. And I know
    what terrible position this puts you and the entire
    subcommittee in, not only relating to our Department but the
    other departments that you have jurisdiction over, and the
    entire overall budget.
        Mr. Rogers. Well, I just want you and the world to know
    that when the Supreme Court's salaries stop, and when the
    National Weather Service stops forecasting weather on the
    evening news, that it is the Department's fault for not getting
    us a plan so we can appropriate your money for you.
        I want the world to know that, and I want the fault to lay
    squarely on your shoulders and the Administration's. We are
    trying our best, and have been for years, to get the money to
    you to fund the operations of the Department of Commerce,
    including the census. And I will be doggoned if I can
    understand why you cannot come here with a specific number on
    the entirety of your budget.
        And we are stymied. We have to sit here and wait, and I
    guess that is all we can do. Are you going to ask for a
    supplemental request for fiscal year 1999 to implement the new
    plan?
        Secretary Daley. That is something also, Mr. Chairman, that
    we are trying to come to final conclusion on, looking at the
    numbers, looking at where we may be on June 15th. If the
    Congress moves forward with funding for the census, what, if
    anything, we will need. And that number also we have not
    finalized.
        Mr. Rogers. Will you submit a budget amendment for fiscal
    year 2000, to pay for whatever plan you come up with? And will
    that amendment be offset? Will you take money from somewhere to
    make up for this? I mean, these are the questions you and I
    have got to face.
        Secretary Daley. Right.
        Mr. Rogers. And it is late.
        Secretary Daley. I know, Mr. Chairman, how late it is, and
    it is not a position I like being in. It is by virtue of a
    whole host of things that have occurred that have gotten us to
    this position. We are working feverishly to try to get you this
    number, so that the Department's overall budget can be looked
    at in its entirety. How we move into 2000 to address this--what
    is a serious situation is one that we want to work with you.
        Mr. Rogers. Well, I am just saying to you, you are
    jeopardizing, in an extreme way, you are jeopardizing census,
    not to mention all of the confusion that will result following
    the refusal or the failure to do a census. I am pleading with
    you, please put politics aside, let us do the census. The
    founding fathers required of us in the Constitution that we do
    so. They also said you should actually enumerate, actually
    count, people.
        You have jeopardized this requirement. You are to the edge
    of the cliff, looking into the chasm below. And I am pleading
    with you, step back from the chasm. Give us your plan. Tell us
    what it is going to cost, so we can satisfy the American
    people's need for an adequate census. Please. I do not know how
    else to put it. Please, will you do that?
        Secretary Daley. We will do both of those, Mr. Chairman.
    Obviously, your next question is--when? We are working
    feverishly to have that amount to you as quickly as is
    possible. That is the only assurance I can give you.
        And the plan that we have put forward that was announced
    last week is the plan that has been complimented and
    criticized, but I think it is a very complete plan. It is not
    the entire Master Activity Schedule, which should be finished
    hopefully sometime between the 15th and 20th of March.
        Mr. Rogers. Oh, and, by the way, I appreciate your giving
    that to me, so I did not have to read it first in the
    newspapers.
        Secretary Daley. I am often amazed by reading things in the
    newspapers about my Department also, Mr. Chairman.
        Mr. Rogers. That is the only report frankly, I have seen of
    the new plan is--what I read in the newspapers.
        Secretary Daley. That is about the same situation here.
        Mr. Rogers. You did not see it either?
        Secretary Daley. I have not seen it. The estimate, the
    guesstimate in the newspaper shocked me also.
        Mr. Rogers. So they did not give that to you either?
        Secretary Daley. No.
        Mr. Rogers. Your reason you did not give it to me is
    because they did not give it to you, right?
        Secretary Daley. We do not have a final number for you.
        Mr. Rogers. No, I understand that.
        Secretary Daley. We do not have----
        Mr. Rogers. You did not see it either?
        Secretary Daley. I saw the article, obviously. Yes.
        Mr. Rogers. But you did not see it before the article?
        Secretary Daley. No.
        Mr. Rogers. Well, who printed the article?
        Secretary Daley. I do not know who the leak was. It was an
    anonymous source.
        Mr. Rogers. Oh.
        Secretary Daley. I guess that is what it is. You know, they
    are probably here. I do not know. [Laughter.]
        Mr. Rogers. Would you raise your hand, please?
        Secretary Daley. Wait. Let me make sure it is nobody here.
        Mr. Rogers. Well, you know, we are making light of this,
    but this is deadly serious, and I am absolutely flabbergasted,
    disappointed, and frustrated that some people down there are
    playing games, political games, on something that, number one,
    is costly, and, number two, is so vitally important to our
    country, our citizens, the people that pay our salaries.
        And I think it is an absolute--I am disgusted with those
    folks down there who insist upon playing silly games with
    something this serious, and playing games with you. I think it
    is terrible that they would undercut you. So I am disappointed.
        Mr. Serrano?

                                census estimates

        Mr. Serrano. Thank you, Mr. Chairman. Mr. Chairman, I begin
    my comments with some nervousness because you and I made a
    decision that in your style, and in mine, we were going to work
    together on every issue. And, I have good news and bad news.
    The bad news is that, the one issue which will probably force
    us to disagree has come up early in our relationship. The good
    news is that, it has come up early in our relationship
    [laughter] and we will be able to keep working on it as we move
    on to agree on what I am sure will be hundreds of issues that
    we will agree on in this committee.
        And, while I know that your comments were directed at the
    Department, and on the issue, and not at me, I hope you also
    understand that my comments have a historical perspective to
    them. In terms of the two-party system, and the disagreements
    that we have in this House on this issue are in no way directed
    at you, but some may sound like I am answering your comments.
    But, even if you had not spoken, I would have spoken on the
    same issue.
        A fact of life is that, I do not have any doubt that both
    the Commerce Department and the Census Bureau want to get this
    job done and done properly. That goes without saying. They are
    professional people who do this professionally.
        In fact, the Commerce Secretary is surrounded in that
    Department, backed up, and in the Census Bureau, by people who
    are professionals. They do not run every two years to do this
    job. They do it year after year after year, and they add on new
    people, talented people, and they get rid of some people, and
    they move on. And, that is what they do.
        Secondly, we have to understand that this is the one issue
    that has been separating us for a long, long time. If we were
    to point at the heart of the differences in this House, we
    would have to point at the census count as one issue that is at
    the center of our differences as two parties, in this
    legislative society.
        I think it would be unfair, in my opinion, therefore, for
    us, as a body, to demand that they do that which at times we
    have not allowed them to do. I am not an expert on the rules of
    the House--we consider the possibility that every so often we
    deal with a bill in a special way, and we give it a little
    longer to work itself out. And, we give that particular budget
    a little longer time to present itself.
        And, maybe with the understanding that this issue does not
    come up but every 10 years, we should consider that, first, we
    were the ones who started the fight on the House floor over how
    people should be counted in this country. We were the ones who
    drove the issues to the courts.
        And, they are the recipients of all of that action. And,
    now we are asking them to turn out a product in a way we want,
    as the Constitution says. Except the constitution has said one
    thing and now the courts say, ``You cannot do that which the
    Constitution says you cannot do, but you could also do it in
    some other places for other things.'' And, they have to come up
    with dollars for that.
        They can come up with dollar figures for anything they have
    to do within the Department. What they are saying to us is that
    within the census, Mr. Chairman, there is a problem. And, I
    think we have to listen to that.
        Now, I understand your position. You are charged with 99
    percent of the responsibility of coming up with this budget. My
    role is to be persuasive in getting some things changed. It is
    to be your supporter. But, it is you who will be called by a
    chairman of the committee, full committee, and asked why the
    bill is not before the full committee. I understand that and I
    am supportive of that and I want to be helpful of that.
        But, I do not think, for us right now, it serves any
    purpose to put them over the coals when, in fact, we were the
    ones who put them over the coals to begin with.
        Now, newspaper articles today tell me that the Census
    Subcommittee is considering yet some legislative changes.
    Legislative changes which, if they come up, will alter the way
    the census will be conducted. Some of them, I must say, I
    approve. I cannot believe I am reading here that they may
    include printed forms in 33 languages. That goes beyond
    anything I would envision in my bilingualism stance. And, I
    applaud that.
        But even if I had supported that. And, it had been my idea.
    It would mean changes in the way they conduct the census. That
    means a little more time, perhaps a little more money, and,
    therefore, not being ready in time.
        Now, what I would hope would happen will remain a secret. I
    am not going to ask you a question because, if you do not agree
    with everything I have said, I really do not want to hear what
    you have to say at this moment. [Laughter.]
        But, I am hoping, Mr. Chairman, that we will fully
    understand and get to the point of understanding that they are
    charged with a responsibility they want to carry out. And, we
    have to make sure that that responsibility is taken care of.
        There were folks who were nervous, at first, about whether
    or not the political agenda would not be met by sampling. The
    issue has been taken care of. Reapportionment, apportioning
    seats will not take place. How do they handle redistricting in
    the House? Well, we have been hearing for the last four to six
    years that those are state decisions anyway. So, that will be
    dealt with by the states.
        But, the big issues that people were concerned about have
    been taken care of, to my dismay. But, so be it. That is what
    the court said.
        Now, let us give them the time to put together the numbers.
    And, if need be, let us ask, Mr. Chairman, those individuals in
    the House who are much better than I am at this to find out how
    to deal with a special situation, an emergency situation if you
    will, a once every 10 years situation, and deal with this
    particular part of the budget accordingly, not stopping the
    census from taking place.
        In fact, I am one of those people who wanted things added
    to the census. If you recall, Mr. Chairman, I am the one who
    said that the Commonwealth of Puerto Rico, the Virgin Islands,
    and Guam should appear in the census. Not outside the census.
    So, I added work to them, and I hope they carry that out. And,
    if they are not, I hope they do not tell me here today either.
        But, let us give them some time. It is in the best interest
    of our country. It is something we have to do. And, as I said,
    Mr. Chairman, and I will close with this, and I mean this
    sincerely and, I will tell you in private later, I want to be
    supportive of your efforts to get the census done. I really do.
    I am not here to cause you a problem. And, I will agree with
    you on all other hundred issues. But, this one that we tend to
    disagree on, let us see if we can work together to give them
    the opportunity to do what they have to do.
        Thank you, Mr. Chairman.
        Mr. Rogers. Thank you very much.
        Mr. Regula.

                              steel import crisis

        Mr. Regula. Thank you, Mr. Chairman.
        Mr. Secretary, we have had some dialogue on the recent
    surge of steel imports. I am pleased with some of the actions
    you have taken--the retroactive duties on Japan and Brazil that
    resulted from expediting these cases and finding critical
    circumstances and the suspension agreement with Russia.
        Now, as I understand it, the steel industry is not terribly
    excited with the suspension agreement. They would rather go
    forward with their litigation. And they have also expressed
    concerns regarding the minimum price and the levels limiting
    cold-rolled steel and the partial year surge. Would you comment
    on the concerns that the industry has raised, as it relates to
    the Russian suspension agreement?
        Secretary Daley. Thank you, Congressman. We have heard from
    the industry loud and clear as to their objection to both the
    suspension agreement with Russia and the comprehensive deal. We
    do feel that they are in the best interest of the steel
    workers, the steel companies, long term.
        We have, by virtue of these two agreements, gotten the
    amount of imports which will be coming into the United States
    back to pre-crisis 1996 levels for almost all of the products
    in the comprehensive deal, 14 different products; on the
    suspension agreement, back to 1997 levels.
        When the companies came in to us in the summer of 1998,
    their goal was to stop, as best one can under our rules-based
    society, the rules-based trading system, the import surge that
    was coming in. We believe we have done that, and we have done
    that very emphatically.
        And at the same time, we have sent a strong message to the
    rest of the world that they should not think that they are
    going to step into this void that Japan, Russia, and Brazil
    created having been brought back to pre-crisis levels and fill
    that. We will continue to act aggressively, as we did in these
    cases. We have an honest disagreement.
        We believe it is a good deal for the steel industry and
    steel workers. The price, we believe, is a price that is good
    and that it is the floor, and it is the price that will prevent
    any lowering below that. There was great concern that the price
    that was being charged before this $250 number was somewhere
    around $200, which is substantially less. We have $250 that is
    the floor. Plus, when you add on top of that the transportation
    cost for this steel, it probably gets it closer to the $300
    level, and we think that is a good price.
        Mr. Regula. I notice that the Russian steel industry has
    had some differences on this issue, and has not been very
    supportive of what the government negotiated. Has there been
    any follow up? Are the Russians going to renege on their
    agreement?
        Secretary Daley. No. We do not believe that they will
    renege at all, and we have plenty of opportunities in this
    agreement to make sure that they do live up to the agreement.
        The fact that neither our industry or their industry likes
    it may mean it is a pretty good deal.
        Mr. Regula. That is often the case in a lawsuit settlement.
        The recent surge of steel imports has led to a record
    buildup of U.S. steel inventories. And I understand that about
    24 million tons of steel have been added to customer
    inventories and work in process between '96 and '98. Some
    industry experts are claiming that even if imports decline by
    10 million tons in '99, inventories would not decline. Do you
    agree?
        Secretary Daley. Well, I think it depends upon the strength
    of our overall economy. We did see, in these last January
    numbers, that manufacturing has come back up--the first
    positive increase in, I think, about six or eight months.
    Obviously, the goal here is to see the steel industry and all
    of our different sectors grow.
        The steel industry will grow, and that backlog that is on
    the docks will be gone through, if our economy stays strong and
    grows. We are optimistic that it will continue to grow. And I
    think if we have the sort of growth that is expected, we will
    use much of that.

                                 asian economy

        Mr. Regula. Do you see any signs of turnaround in the Asian
    economy? This, of course, would be very helpful in reversing
    these surpluses of steel on the world market.
        Secretary Daley. There are some signs. Korea seems to be
    doing better. Thailand seems to be doing better. Overall,
    though, Indonesia and China have had some difficulties and are
    expected to have a tough year in 1999. We do not see any great
    resurgence over 1998 in 1999 for most of Asia, but there are
    some bright spots--as I say, Korea and Thailand.
        We are hopeful that Japan, as the second largest economy in
    the world, will see some domestic-led growth as opposed to
    export growth. But in order to use up the steel that is on the
    docks, and keep our economy growing is most important.
        My understanding, Congressman, is that some of the prices
    in some of the steel sectors, steel products, has begun to go
    up in the last 30 days to 45 days, which is a positive sign
    from 1998.
        Mr. Regula. When you evaluate a steel import surge, do you
    take into account inventory that is already in the warehouses?
        Secretary Daley. My understanding is that it is taken into
    account by virtue of what is filed with the Customs Department.
    But to be frank with you, I am not quite sure exactly.

                             lands legacy initative

        Mr. Regula. One last question. I understand that the
    Department is a participant in the President's Lands Legacy
    initiative. And, as I understand it, you are proposing that
    funds be transferred from the Land and Water Conservation Fund
    to the Department of Commerce, for purposes of coastal dredging
    and restoration, coral reef restoration, coastal zone
    management grants, and expanding national marine sanctuaries,
    and estuarine research reserves.
        The Interior Appropriations Committee normally has
    jurisdiction over the funding on land acquisition and the LWCF,
    and I have some concerns about your authority to utilize these
    funds that are being proposed for transfer. Do you have plans
    to purchase the land that will be restored? And who will be
    managing these new public lands that result from such
    restoration? And how do you see this working? Or has the
    proposal not been defined at this point?
        Secretary Daley. My understanding, first, is that we do
    have authorization, and the Subcommittee has authorization, to
    appropriate those funds--about $105 million--for the Lands
    Legacy program. We are committed, though, to see a permanent
    source of funding and will--after 2000, want to work with the
    Congress to come up with some permanent source of funding.
        Exactly how that land is going to be owned or managed, to
    be frank with you, Congressman, at this point I am not quite
    sure. But I would be happy to get back to you on that.
        [Clerk's note.--The following information was submitted
    subsequent to the hearing:]

        The Lands Legacy Initiative proposes a $12 million increase
    related to land acquisition and construction, of which about
    60% would be for land acquisition. Under the National Estuarine
    Research Reserve System (NERRS) program, the states, using
    grants from NOAA (which states must match at 50%), can acquire
    land for NERRS. This land is state-owned and managed.
        By the end of FY 2000, the System will expand from its
    current 23 reserves to an anticipated total of 27 reserves.
    This expansion will increase to over one million acres of
    estuarine habitat protected by the NERRS. Examples of
    acquisition could include: wetlands and other habitat slated
    for development; threatened or endangered species habitat;
    additional areas for conducting long-term research on water
    quality, land uses and functions; and sites for construction of
    NERRS public facilities.

        Mr. Regula. Thank you.
        Thank you, Mr. Chairman.
        Mr. Rogers. Mr. Mollohan.

                    statistical sampling and the 2000 census

        Mr. Mollohan. Thank you, Mr. Chairman.
        Mr. Secretary, I would like to join the Chairman and the
    new ranking member in welcoming you to the hearing. I certainly
    welcome you.
        I am sitting here thinking what a shame it is that
    partisanship has driven what can only be described as a
    bifurcated census process, but, it obviously has. We are in one
    census for the majority members of the House of Representatives
    for apportionment, and an accurate number for enumeration.
        We are in another census for everybody else for everything
    else. This census is based upon scientific sampling to try to
    get at that five percent or so that represents a real
    undercount. Every expert who testifies or speaks on the issue
    recognizes an undercount exists that can only be reached
    through scientific sampling.
        Now, the Supreme Court said that you cannot use the
    scientific sampling for apportionment. But as I understand it,
    you have to use it. You really have to use it for
    redistricting. You certainly have to use it for benefit
    distribution as a matter of practicality.
        I am asking if you agree with that, and at whatever costs?
    Shame being that you will not get an accurate count for
    apportionment without scientific sampling.
        Whatever extra that costs, you are going to have to do
    scientific sampling to satisfy the governors and the mayors of
    this country. When it comes to benefit distribution, they are
    going to insist upon accurate population numbers for the
    distribution of dollars and cents.
        Do you agree with that?
        Secretary Daley. I do agree with it, Congressman. It is our
    opinion that we are required to use sampling for other purposes
    other than apportionment if feasible. It is the Census
    Director--Dr. Prewitt's opinion that it is feasible to use
    sampling for these other purposes, and that is part of the plan
    that has been put forward and we are moving towards.
        Mr. Mollohan. Based upon whatever experience you have had,
    and what other input you are receiving. Can you testify, with
    regard to my point about the governors and mayors of this
    country, Democrat and Republican, insisting upon scientific
    sampling for benefit distribution?
        Secretary Daley. Well, we have heard from numerous mayors,
    governors and state legislators, county officials--I spoke to
    the National Counties Association this past weekend, and they
    are all concerned about the census, how it is going to be done,
    how accurate it will be, how effective it will be.
        Quite honestly, the vast majority of mayors would probably
    be more democratic, but it is a bipartisan group of mayors who
    have come forward and have participated in our process.
    Governors we have heard from on both sides.
        Mr. Mollohan. Both sides of what, Democrats and
    Republicans?
        Secretary Daley. Well, it is Democrats and Republicans.
    Some Democrats for sampling. Quite frankly, I do not think we
    have run into any Democrats that are against sampling yet as
    governors. Republicans that have been supportive of not doing
    sampling and against sampling, and some who have had no opinion
    yet and have stayed out of the fight.
        It is very much across the board, but we have heard from
    many more, quite frankly, who want the most accurate count that
    we could give them for the purposes that you have laid out.
        Mr. Mollohan. For benefit distribution?
        Secretary Daley. For benefit distribution primarily.
        Mr. Mollohan. I think when it gets down to reality, and
    people see what that means, particularly in these large states,
    there is going to be a very important expression of requirement
    on their part with regard to the census.
        Now, with regard to cost, which we are all concerned about,
    you recognize that you have to come up with a number to
    incorporate enumeration more extensively to try to get this
    under count, do you not?
        Secretary Daley. Absolutely.

                                  census plan

        Mr. Mollohan. You do recognize that you have to develop a
    plan?
        Secretary Daley. Yes.
        Mr. Mollohan. You are going to develop a plan and a number?
        Secretary Daley. Yes, we will.
        Mr. Mollohan. We all know that the majority is insisting to
    do enumeration, and that this is going to cost. It is going to
    cost a billion dollars more. It is going to cost two billion
    dollars more. It is going to cost three billion dollars.
        It is going to cost some huge amount of money more to
    achieve a less accurate result. You just want to come up with
    an accurate number and an accurate plan. Is that not correct,
    before you give these to the Committee?
        Secretary Daley. Yes, sir.
        Mr. Mollohan. The Chairman has expressed concern about you
    not having a plan, and is sitting here saying well, by golly,
    why do you not have a plan. How could you come up with a plan
    until the dress rehearsal was done? You would be guessing at a
    lot of the plan's elements.
        How could you come up with a plan and a cost? How could you
    come up with a plan and a cost really in the absence of not
    only the results of the dress rehearsal, but also without the
    results of the Supreme Court decision?
        Secretary Daley. Well, it would not have been a very
    accurate plan or probably very accurate number had we done
    that. We learned a lot from the dress rehearsal that is going
    into the final plan.
        Mr. Mollohan. You are in the process of revising the final
    plan now in light of the results of the dress rehearsal, and in
    accordance with the direction of the Supreme Court. Is that
    correct?
        Secretary Daley. Yes.
        Mr. Mollohan. I would suggest that the amount of additional
    money, for the record, be less a responsibility of the Commerce
    Department coming up with than the very difficult task of the
    Appropriations Committee coming up with the additional
    discretionary dollars. We are going to need to meet a lot of
    funding requirements, besides census.
        So funding the census is going to be a part of a lot bigger
    problem.
        Mr. Chairman, you let me know when I am running short of
    time.

                         import administration funding

        Mr. Secretary, with regard to trade issue Mr. Regula was
    pursuing--I am going to ask you a dollar and cents question. I
    have heard some static secondhand from the ITA and some of
    those people who have been working hard, like Mr. Regula, on
    this trade issue--that the Import Administration has expressed
    a concern about not having enough money to do its job.
        I just was reviewing the record, and if I am accurate about
    it, the request for '99 was $29.47 million and Congress
    appropriated the request for the Import Administration.
        Do you agree with that?
        Secretary Daley. I believe that was the number, yes,
    Congressman. I have not been given it, but I think you are
    accurate.
        Mr. Mollohan. Well, if I am not, will you let us know after
    the hearing? My understanding is that we gave them the request,
    and the request is a little higher this year. I am hopeful that
    we are just not using the steel issue as some sort of leverage
    to get additional funding for that account on the premise that
    maybe if we had additional funding, we could get a better
    response out of some quarters of the Administration.
        I know you are very responsive yourself and want to be
    responsive to the steel crisis facing this Nation.
        Secretary Daley. I do think I will--and this has all
    happened, obviously, in the last number of weeks. The response
    to the steel situation has put enormous strain on our responses
    in the Import Administration. We tried to move those cases, and
    we did, faster than any cases have ever been moved.
        They are very complicated investigations. We are hopeful
    that what we saw in the steel industry does not happen in other
    sectors, but it has put quite a strain on that piece of our
    Department.
        But we are committed to continue that sort of aggressive
    action when we think illegal dumping has occurred in this
    country.
        [Clerk's note.--The following information was submitted
    subsequent to the hearing:]

        We have checked the appropriations history, and the
    Committeee in fact did provide $31.047 million, the full
    request for Import Administration. We appreciate the
    Committee's strong support for the vigorous enforcement of our
    trade laws.
        This year we are requesting $33.154 million for Import
    Administration, which includes increases totaling $1.7 million.
        We look forward to continuing to work with you to ensure a
    level playing field internationally for American firms and
    workers.

        Mr. Mollohan. Thank you, Mr. Chairman.

                         national climatic data center

        Mr. Taylor. Mr. Chairman, Mr. Secretary, you are aware of
    the National Climatic Data Center, one of NOAA's three data
    centers, is located in Asheville, which I have the pleasure of
    representing. And I was impressed in part to see that the
    Administration has requested the funds for the Climatic
    Reference Network to develop a system of real-time weather data
    at the NCDC, as well this funding for modernization.
        Now, the larger question I have is what to do about the
    data once we collect it. I talked with the director some time
    ago and if we take the handwritten charts that come to the NCDC
    in and put them on top of each other, in one year it would be
    about 24 miles high.
        And the rain gauge information, if unrolled from their
    spools, would measure about 150 miles in length. And this is
    not a direct question, but I would ask if you could perhaps put
    your thought into how we could utilize more manageable media in
    storing that information and modernizing it as much as
    possible.

                   apple juice concentrate dumping from china

        I would encourage you to do that. I would also ask a
    question in dealing with China, and I am going to put the same
    question to the U.S. Trade Representative. I know the question
    is jointly to be answered. We represent apple farmers in
    Western North Carolina and what I believe to be dumping of
    apple juice concentrate from China has totally wasted a lot of
    their resources.
        We cannot even begin to pick our own apples for what they
    sell their apple juice for in this country, to our domestic
    juice manufacturers. What are some ways that you could use your
    office to address this issue, and to make our overseas markets
    more attractive for domestic apples?
        I personally do not think we are going to do much with
    China, not in the near future. But you keep that in mind?

                                     nafta

        In fact, talk with me a little bit about NAFTA in general.
    Our district has been hurt more than I would expect most
    districts because I would say there are at least 12 major
    industries in western North Carolina that have been dumped on
    by NAFTA, and we have not seen any positive results from it.
        Is this considered successful, or is the Administration
    looking at our trade through NAFTA's eyes to see how you can
    address the whole country's needs, rather than just certain
    parts of the country?
        Secretary Daley. If I could first, Congressman, on the
    apple situation, the apple juice situation from China. Let me
    talk to our Import Administration people, see if there has been
    any discussions.
        As far as I know, at this point there has been no dumping
    case filed, but--and also let me talk to our compliance center
    who makes sure that if there are markets that are not open to
    U.S. products, that we find out whether or not there is some
    action we can take within the rules-based obvious society that
    we are.
        [Clerk's note.--Subsequent to the hearing, the following
    information was provided for the record:]

        Import Administration, within the International Trade
    Administration, enforces the antidumping (AD) and
    countervailing duty (CVD) laws to ensure the domestic
    industries are not injured by unfair foreign competition in the
    U.S. market. The U.S. AD law is designed to counter
    international price discrimination, commonly referred to as
    ``dumping.'' Under the CVD law, Import Administration
    investigates complaints that foreign governments are unfairly
    subsidizing their industries that export to the United States.
        While the apple industry has not filed a petition, we are
    available to meet with apple industry representatives at their
    convenience. Consistent with our legal process, Import
    Administration is permitted to meet with domestic industries to
    explain our procedures and data requirements, and to review
    draft petitions that are prepared by petitioning industries.
        The MAC unit of the International Trade Administration
    works with non-agricultural U.S. firms, particularly small and
    medium-sized enterprises, to open foreign markets--and keep
    them open while working to reduce the U.S. trade deficit. MAC
    does this by solving company and industry-specific market
    access problems in country or regional markets and helping U.S.
    firms and workers to identify and overcome barriers to U.S.
    exports.
        While the Department of Agriculture is formally responsible
    for removing trade barriers on agricultural products, our MAC
    staff would be pleased to meet with apple growers or put them
    in touch with their counterparts at Agriculture.

        On the issue of NAFTA, NAFTA has been, in our opinion,
    overall, over the last almost five years, a success. There are
    difficulties obviously with trade agreements. There are
    dislocations. Some areas are positively impacted. Some are
    negatively impacted.
        Overall, Mexico and Canada are two of our top three trading
    partners now. We have increased by 75% the amount of trade with
    these two partners. Exports from the United States to Mexico
    have increased since the devaluation of the peso in 1994.
    Exports from Mexico to the United States have increased
    substantially.
        But our exports to Mexico are also increasing at a very
    healthy rate. We think that is a positive sign. And the same is
    true with our relationship with Canada. So overall, we think
    that NAFTA has been very good for all three partners.
        Again, there is no question there has been some
    dislocation. We had the five year review this past January.
    There is a debate over what sort of estimates of job gain or
    job loss there has been. And there is quite a difference, as
    you could imagine, between what one side says and the other
    side says.
        Overall, for a healthier relationship with our neighbors,
    we think NAFTA has been very good. It is a complex relationship
    with Mexico on a whole host of areas. But in trade, we think
    things are moving positively forward in this relationship.

                        nafta impacts on north carolina

        Mr. Taylor. Well, let me illustrate: North Carolina is the
    tenth largest State, and our top three industries are tobacco,
    textiles and furniture. Well, as far as tobacco goes--I think
    this Administration inhaled and got a bad smoke or something,
    and I do not know what that is all about. We will put that
    aside, apart from NAFTA.
        But with textiles, of course, NAFTA has just hit the whole
    state hard. In fact, what few textile companies that are still
    with us, Levi-Strauss and Burlington Industries, are even now,
    just in the last few months, announcing that they are
    downsizing and moving out of the country.
        That is a real problem. And then in the furniture industry,
    we will not talk about the Department of the Interior, which
    believes no tree ought to be cut, and so it is hard to make
    furniture out of it. But we are now shipping furniture parts
    into the U.S.--one company in North Carolina gets in two
    containers a day from China, and soon it will be 6, 8 and 20.
        And this third North Carolina industry will be gone because
    China can produce furniture with the few cents an hour they
    charge in labor and get the wood offshore to provide quality
    furniture.
        How can we say that our trade policy is making jobs in
    America when you see that the top three industries in North
    Carolina are being devastated?
        Secretary Daley. Congressman, I think if you look at the
    overall job creation of the last number of years, you are
    talking about 18 million new jobs created in the country. The
    overall economy is good, as many people have seen it.
        There is no question there are pockets, either by
    dislocation of trade or technology changes, that have occurred
    that have caused pain and difficulty, steel being one, that
    technology has basically changed the way businesses operate.
        And some businesses that used to be driven to move to Asia
    for production of lower cost items are now moving to other
    parts of the hemisphere. We believe overall very strongly that
    this economy, with the sort of unemployment we have and the
    strong economy and compared to the rest of the world, is doing
    very well.
        But again, I acknowledge, as you do, that----
        Mr. Taylor. Right.
        Secretary Daley [continuing]. It is not a universal,
    perfect situation.
        Mr. Taylor. We are in an economic high point, I know. We
    started in 1980, coming back--it would bottom out on a small
    basis and started back up. And it is good for us in many ways,
    but there are good jobs and there are better jobs. There is no
    question that the manufacturing jobs that are being driven out
    of the country are being replaced with service industry jobs.
        And some of those jobs created in the high-tech area are
    positive as far as income, but a lot of the service jobs now
    that are available are not in the same area of income that we
    had with manufacturing. And that is what troubles me in the
    long run.

                         MANUFACTURING JOB DISLOCATION

        We may have the same number of jobs and even some
    increases; but if we are driving out our manufacturing jobs, we
    will not have the returns or the economic growth as far as
    individuals are concerned as we have had in the past. And the
    statistics are there for that.
        Does that trouble you? Nationwide, do you look at not just
    the number of jobs, but what we are going to do as far as the
    growth of the individuals' income, if we lose more and more of
    our manufacturing?
        Secretary Daley. Obviously we are concerned, Congressman.
    We have seen the wages of Americans overall going up in many
    sectors. I would just say I do not have an exact number. But in
    the manufacturing sectors which have had a substantial decrease
    over the last number of years, I do not know the percent, but I
    would imagine a substantial percent of that is a result of the
    technology changes that American businesses have taken
    advantage of and have made them more productive, more
    competitive worldwide. That obviously is no solace to someone
    who has lost their job by virtue of the fact that they have
    been replaced.
        Mr. Taylor. Or if it moves out of the country. I mean, if
    you can make it more productive inside the United States,
    people recognize that as the ability to compete. If you are
    lessening the competition by going to China, Mexico and
    wherever you only have to pay a few cents an hour, you
    recognize that kind of hurts the average worker here.
        And we thank you.
        Mr. Rogers. Thank you, Mr. Taylor.
        Ms. Roybal-Allard.

                                DECENNIAL CENSUS

        Ms. Roybal-Allard. Secretary Daley, I would like to go back
    to the issue of the census again because it is my understanding
    that you have an updated operational plan that is based on the
    dress rehearsal which was just recently completed.
        I, of course, am particularly interested in getting an
    accurate census coming from California. Based on the GAO study
    that was just released, California probably was one of--if not
    the biggest loser--of an inaccurate count in 1990, having lost
    approximately $2.2 billion Federal dollars, over the decade.
        And of course, Medicaid in California was the largest
    program that was affected. I can tell you that especially the
    hospitals and the clinics in my district could have used that
    additional money.
        Another finding of GAO's that is of particular importance
    to me was the fact that the under count affected Hispanics more
    than any other group, particularly in states like California
    and Texas, with nearly half of the under count in California
    and Texas among those who were of Hispanic origin.
        Based on this GAO study, does the study reinforce what you
    already know or what you already knew? And were there any
    surprises? And if so, what additional actions are you taking in
    order to correct some of the things that were raised in the
    study?
        Secretary Daley. I think there is no question that the
    study confirms what many people had felt, and that was that, by
    having a less than accurate count, certain communities, certain
    states would be disadvantaged potentially from a representative
    portion and also from a distribution of over $200 billion of
    Federal funds.
        I think the GAO study highlights the five states that were
    most severely hit. Some states, I think, would not be impacted
    if sampling had been used. But no doubt about it, California
    was the number one state.
        That is one of the main reasons that in our discussions
    with communities, and local officials around the country, we
    have highlighted, and they have highlighted more so to us,
    their desire for an accurate count because they believe that
    they should get a fairer share and a more accurate amount based
    upon their real numbers and not a number that is less than
    accurate.
        So that is what drives this process over the last eight
    years both from the perspective of those who looked at the 1990
    census and understand that it was less accurate for the first
    time than any census before, and the fact that the Congress and
    the Administration at the time went to the National Academy of
    Sciences in a unified, bipartisan way to say how do we do this
    better in the future.
        Obviously there are disagreements on how to do that. But we
    feel very strongly that, for the reasons and the sort of
    implication in that GAO report, that is another reason why we
    should have the most accurate census we can do. And that is why
    we have put our plan forward. Last week Dr. Prewitt forwarded
    the plan that includes sampling for distribution of Federal
    funds and redistricting purposes.

                               CENSUS ADVERTISING

        Ms. Roybal-Allard. Based on the dress rehearsal, it appears
    that paid advertising was particularly effective in raising the
    awareness of the public about the census.
        However, we also know from the 1990 census that even when
    there is a high percentage of people who know about the census,
    that awareness does not necessarily translate into action, in
    which they actually fill out the form and send it in.
        What is it going to take to correct that. I know you have a
    good advertising campaign. We know that we could raise
    awareness, but we also know that awareness does not mean that
    people are going to turn it in.
        So what are you planning on doing or what will it take to
    translate awareness into action?
        Secretary Daley. One part of this is obviously the paid
    advertising drive that we will do, the first time that the
    census has done this. They have depended in the past upon free
    advertising given by the networks and by the TV stations which
    were generally between 1:30 a.m. and 4:30 a.m.
        And so we are putting together a very aggressive
    advertising campaign, both television, radio, print media, and
    it is twofold. One, to educate people, as you have said, to
    tell them what this is all about and why it is important. And
    then to motivate them to participate, to fill out the
    questionnaires and make sure that they are accurate.
        We are, along with that, having pre-notification, sending
    postcards to notify people that basically your questionnaires
    will be coming. We will have an entire campaign basically prior
    to the April 1st date to do two things. One, to educate people
    up front; and then second of all, to try to motivate them and
    to motivate in those areas that have been historically under
    counted and try to target those groups.
        As you mentioned, Hispanics were substantially under
    counted last time, much more so than anyone else.

                       MINORITY UNDERCOUNT IN THE CENSUS

        Ms. Roybal-Allard. One of the dress rehearsals sites was
    Sacramento, California, and I believe it was chosen because of
    its diverse population. And as I go down the list of which
    districts actually reflected the undercount in 1990, it reads
    like a Who's Who of urban and racially diverse districts in
    cities across America.
        Could you tell me what some of the special problems are
    associated with urban districts or diverse areas and what you
    did in Sacramento which will help make the census more
    accurate?
        Secretary Daley. I think aggressive partnershipping with
    the local governments, having a more accurate address list so
    that as enumerators do go out door to door, that they have an
    accurate listing of locations, which is very difficult in urban
    situations.
        You have buildings that are abandoned or new buildings that
    are being built, and to make sure that we are familiar with
    that. We had an aggressive program with community groups to
    make sure that they were involved in the process.
        The partnership program that we have with, again, local
    governments and with community groups has been updated, and I
    think a lot more emphasis has been put into it. So we have had
    a whole host of learning from the dress rehearsal, what has
    worked, what has not. What we did learn in that dress
    rehearsal, as we learned from the dress rehearsal in South
    Carolina and the Indian Reservation was that the under count
    can be substantial.
        We have a much more mobile society. We have people who are
    less willing to deal with their government, less willing to
    want to get involved. They get a lot more junk mail. And so it
    is going to be harder this time to do what we did and just
    tread water, if that was our goal, to the 1990 level.
        Ms. Roybal-Allard. Thank you.

                           decennial census planning

        Mr. Miller. Mr. Secretary, good afternoon.
        Secretary Daley. Good afternoon.
        Mr. Miller. My area of interest is the census.
        Secretary Daley. Really? Okay. [Laughter.]
        Mr. Miller. Last week, when the new plan was introduced
    without a lot of detail, but with a new plan of a two number
    census, I was very disappointed. It reverses the policy and
    belief of the Census Bureau for years of posing a two number
    census.
        I mean, a two number census is bad public policy, and it is
    politics driving bad public policy. It is a recipe for
    disaster. It is a lawyer's dream. Because what we are going to
    have is, we are going to have the Supreme Court approve a set
    of numbers, actual enumeration.
        So every city, county, census block, census track have one
    number. And then we are going to manipulate those numbers and
    have the Clinton set of numbers which are the manipulated
    numbers. And every city is going to want the higher number.
        As I say, it is going to be tied up in the courts if that
    goes for a long, long time.
        First let me go back to what Chairman Rogers was talking
    about and why we do not have the details. While I was not
    involved in it back in 1997 when the Appropriation Bill was put
    together, there was a requirement then to have a dual track, to
    be prepared for both.
        And then last August, three Federal judges ruled that it
    was--you know, it was illegal to have the sampled census, so we
    were going to have to do a full enumeration. So it should have
    been--everybody should have been very aware that that was very
    possibly going to happen.
        In September, three more Federal judges, in another
    unanimous decision, said it is illegal. In January the Supreme
    Court ruled it illegal. And we got a detailed plan, fairly
    detailed plan, with appropriations and budget numbers and all
    for the sampled census, but we did not get it for this one.
        Now we are going to get it here in a couple of weeks, we
    hope. The question, to follow up with Mr. Rogers' question, is
    who made the decision not to pursue what the law required back
    in fall of '97 to have both tracks being prepared?
        I mean, I know we had an interim director last year, but
    someone had to make a decision and say well, do not worry about
    it, you know, we are going to win this one and, you know, so we
    do not need to follow that. I mean, someone had to make a
    conscious decision to not prepare--to not do a dual track.
        Secretary Daley. No one made a conscious decision not to
    finalize a plan, two totally final plans of sampling and of
    non-sampling traditional form, however you want to call it. The
    fact is, had Congress not appropriated the monies that we did
    use for the initial planning as we went forward, I would
    imagine I would be, at some point over the next number of
    weeks, sitting before you asking for even more money on a
    supplemental, or on a next year basis than we will ask because
    we did do planning on a second track.
        Did we finalize and have a complete, final plan? No, we
    have not. We did not get that.
        Mr. Miller. But we had one on the other one, the more
    complicated one.
        Secretary Daley. That was not fully formally finalized and
    done. And had the Supreme Court ruled the other way, I would be
    sitting here probably telling you that the plan that the Census
    Bureau is moving forward on, the master activity schedule based
    upon what has happened in the dress rehearsal, what
    information----
        Mr. Miller. We have a master activity schedule and an
    appropriation request for the other plan that is illegal. And
    so we do not have one for the other one. So someone, in my
    opinion, had to make a conscious decision and not be fully
    prepared.

                               TWO NUMBER CENSUS

        But let me switch over to another question. And this issue,
    as I saw, is a recipe for disaster. And quoting the Census
    Bureau, they said a two number census would be confusion,
    ``would create confusion and controversy.''
        And they have been on record really against a two number
    census for a long time. You know, why has the position changed
    that now we like a two number census? And will it not create
    confusion and controversy?
        Secretary Daley. Congressman, we do not like a two number
    census either. We wish we could have the most accurate. But
    between having two numbers and a less than accurate number for
    the purposes of Federal distribution of funds or redistricting,
    we will have to go with two this time.
        Obviously, if the Congress changed the law and allowed--and
    made it legal to use sampling for apportionment purposes, I
    would be sitting here telling you that one number is the best
    way. That is how we wanted to go. And if we had our druthers,
    as you, I would assume, would know, we would be sitting here
    saying one number is the way to go.
        It is. But we also are at a point right now that we have to
    get the most accurate number. And the way to get the most
    accurate number is to go, in our opinion, in the way we are
    proceeding.
        Mr. Miller. To a two number census. It is going to be, as I
    say, an absolute disaster we are facing for the next decade. We
    were at a hearing yesterday and Congresswoman Sue Myrick, who
    is the Mayor of Charlotte, was talking about--Mr. Taylor is
    gone. But in North Carolina, they are still tied up in the
    court over redistricting.
        They had a new redistricting plan last year. So just
    imagine when every city and county is going to be suing on the
    redistricting plans. I mean, it is going to be a different
    debate.
        Secretary Daley. But those cases are not being litigated at
    this point because of the two number census. They are being
    litigated because the legislature drew lines in a way----
        Mr. Miller. But just think of the litigation we are going
    to have in the next decade.
        You know, because we are going to have a lot--unbelievable
    amount of legal battles.
        Secretary Daley. Oh, yeah.
        Mr. Miller. Can you envision that?
        Secretary Daley. Oh, my name is all over them, I am sure.
    [Laughter.]
        Mr. Miller. I mean, but, you know, the number, you know, is
    going to be phenomenal. But is this going to create confusion?
    Now you are saying it is--your interpretation is that it is
    required for redistricting?
        Secretary Daley. If it is feasible for other purposes other
    than apportionment.
        Mr. Miller. You are listening to the same attorneys who
    have spent the past seven years telling you it was legal to--
    you know, you did not have to do a full enumeration. So you are
    going to listen to the same legal advice that has been wrong?
        And, you know, even the CRS has issued an opinion that they
    think it is probably doubtful that is going to be required. I
    mean, I think you are going to lose this in court. I feel
    fairly confident, once the case is introduced, they are going
    to throw it out for redistricting.
        I mean, you can read Judge O'Connor's opinion. You can, you
    know, look at other things. But you are, you know listening to
    this same bad legal advice and going to create the second
    number.
        Money is a different issue. Money is a totally different
    issue. And, you know, I am not debating money. But for
    redistricting--and we are talking about an April 1 of next
    year's number. So, you know, I was thinking the other day this
    must be--you know, this is going to be great for the trial
    lawyers.
        They are going to have a lot of fun with this one. I mean,
    you can imagine. You are literally going to be the Secretary of
    Commerce in the next decade.
        Secretary Daley. Well, I just know from 1990 that lawyers
    had a field day and the Secretary at the time--Mosbacher's name
    was taken in vain all over America, so I assume I will join his
    great position and have my name all over.

                              multilingual census

        Mr. Miller. I introduced a ten point plan to help improve
    the census because we all want to get rid of the--you know, we
    recognize it is there and we want to do what we can. And
    actually, seven of my points the Bureau has been supportive of.
        And some of it is just more money for advertising. I think
    paid advertising, you know, would be--and I think that we will
    find out they are going to recommend more money for that. The
    languages--I asked the question about more languages.
        I mean, Spanish, of course, is covered, but I do not
    understand--right now, for example, it is only in five or six
    languages. And you say well, that is just a minimal number of
    people. Well, if you are in Congresswoman Carrie Meek's
    district where there is a large Haitian population, Creole is
    the language.
        And yet, right now, you know, there is instructions of how
    to do it, but they have got to fill it out in English. And the
    only other way they can do it is we are going to hire people on
    the telephone to handle the issue. I mean, a lot of other
    areas, you know, problems are going to have that with language.
        It is not like I have a large Haitian population. I do not
    know, maybe Mr. Serrano does. But, you know, right now there is
    no way to help them but they have got to do it by telephone. I
    mean, it is not being--you know, trying to reduce that part of
    the under count I do not see.
        And I do not know why the opposition--they say oh, the
    computers will not do it. Well, so you are going to do it by
    telephone with translators only?
        Secretary Daley. My understanding, Congressman--first of
    all, when I came in here two years ago, I was told that these
    questionnaires would be out in 30-some languages and I thought
    that sounded great when I was told it. I wondered how they
    could ever do it and how you could have the sort of system that
    would--but that was their opinion at the time, that it could be
    done.
        I think what was proven to them through research and really
    putting not only pencil to paper, but probably some real
    understanding of how difficult and complex that would be, that
    it was just not feasible. My understanding is the six languages
    which the questionnaire would be printed up in--English,
    Spanish, Korean, Vietnamese, Talalog and Chinese--thank you--
    covered 99% of the people, so it became almost a cost benefit
    issue. It would be great if we could supply a questionnaire to
    every person who may have every language, and I am sure there
    are more than 33 languages that are spoken out there.
        Mr. Miller. Even Braille is not even included in this.
        But I mean, the thing is, these are the most under counted
    populations. To me, we can go the extra mile to make it
    possible and they are not going that way.

                            post census local review

        Let me go to another issue that--and that is post census
    local review. This is essentially supported by all local
    officials. I have not met a local elected official that is
    opposed to post census local review. You are familiar with what
    we are talking about.
        Now, Director Prewitt is saying that we cannot make any
    changes in the plan because it is already set in concrete, even
    though the plan is not available. But you are saying today that
    the plan is not set in concrete. And then the Advisory
    Committee of the--your Census Advisory Committee has
    recommended in favor of post census local review.
        Because, as I say, I have not met an elected official--
    there was 124,000 people added in 1990. And they say well, I
    guess those are not important anymore or such. I mean, you
    know----
        Secretary Daley. Well, they are very important,
    Congressman, and I do not look at that. We take all ten and all
    the other recommendations that you have made or may make very
    serious. Our goal is to do exactly what your goal is, and that
    is to count the largest number of people who are here in the
    United States on April 1st.
        The post census local review did not work well in 1990.
        Mr. Miller. But it added 124,000 people.
        Secretary Daley. Only a quarter of the governmental
    entities participated. It was not as successful as some people
    think it was. Right now we have greater local participation in
    the pre-census run up than we have ever had in putting together
    our address lists. We have 84% of the local entities helping
    us.
        Mr. Miller. But that is before. This is kind of like the
    audit. I mean, you have audits of books if you are in the
    private sector.
        Secretary Daley. Well, that----
        Mr. Miller. Like after the fact, why can we not--we have a
    real trust problem with this census, as you know. I mean, you
    know, and so now we are saying to the local mayors and county
    commissioners and township officials, you know, you cannot look
    at these numbers, we do not trust you anymore.
        Secretary Daley. Well, I can speak----
        Mr. Miller. What harm does it do? Dr. Prewitt could not
    find any harm.
        Secretary Daley. I do not think it does harm in the sense
    of--well, as you define harm. I know that what we have done
    with local governments in this audit, as you call it, is to try
    to audit the address list, which is the most important thing we
    can have accurate on April 1st by virtue of going to the local
    governments, saying that this is the urban address list we
    have, update it, continue to update it.
        If there is new construction going on, let us know. Get
    that all pre April 1st. If we keep this going afterwards in
    kind of an open-ended audit, it will make it very difficult to
    finish and have an accurate count--because I would imagine
    there will be some who will want to come in on December 31st
    and say there are two new people who just moved into my city
    and please count them because I am two people under a million
    and that is the magic number I have to get to.
        So our goal is to try, between January 1st and April 1st,
    so that on April 1st we know that we have the most accurate
    mailing--or address list of new residences, new construction so
    that----
        Mr. Miller. That is all good. I mean, those are good
    programs and I am, you know, glad to see that the Bureau is
    moving in that direction. But the thing is that little bit of
    trust that we need. And for those communities--I mean, mistakes
    are made.
        We had one congressman testify in Wisconsin that a whole
    ward was mysteriously left off. Of course, the Bureau corrected
    it. And Bureau sets the standards of--you know, you do not add
    two people I mean, I would agree with that. But it is just----
        Secretary Daley. But I know a few mayors who probably would
    not agree with that. One in my family. [Laughter.]
        Mr. Miller. Well, as you know, the Mayor of Detroit added
    45,000 to Detroit. So is it so set in stone that we cannot make
    any changes or, I mean----
        Secretary Daley. Well, I think we feel very confident that
    what you are trying to address is being addressed as best we
    can with this pre-census involvement by the local agencies--
    local governments. And to try to do the post-census is not
    going to give us the sort of numbers.
        We think we can accomplish it--part of the reason for that
    post survey having 124,000 is because they did not do as good
    of a job before April 1st as we plan to do.
        Mr. Miller. Actually, if they do a good job before, then
    there should not be anybody added, so it does not hurt to do it
    then. You know if everything is corrected, you know, in the
    pre-census----
        Secretary Daley. But you cannot do everything.
        Mr. Miller. You know, it is just a matter of whether----
        Mr. Rogers. Mr. Wamp.
        Mr. Miller. Thank you.
        Mr. Wamp. Thanks, Mr. Chairman. I was thinking just a
    minute ago, Mr. Secretary, when I was growing up and my dad
    would whip my butt and say, ``Hold still and take it like a
    man.'' And I admire you. You are tough.
        This day cannot be too easy for you. I serve on the
    Interior Subcommittee and down there we sometimes get on
    Secretary Babbitt like that and he squirms and yells and
    wiggles. It is kind of nice to see a guy, and maybe it runs in
    your family, that can take a harsh word or two. Maybe you are
    tough from where you grew up. [Laughter.]
        Secretary Daley. I am the youngest of seven, so that is the
    real reason why I can take a lot. [Laughter.]

                     department of commerce y2k compliance

        Mr. Wamp. Your testimony says that you have moved from 25%
    on Y2K compliance, I think, to 85%. Tell me more about NOAA.
    Where are they? That would be a great concern of mine on Y2K
    compliance with NOAA.
        Secretary Daley. Let me--to be honest with you,
    Congressman, I do not have it broken down by bureau. Let me
    just take a minute and--if I can ask Scott Gudes, who is the
    Deputy Under Secretary for NOAA.
        Mr. Wamp. Please.
        Secretary Daley. Tell us where NOAA is.
        Mr. Gudes. I'm Scott Gudes, Deputy Under Secretary at NOAA.
        We are in pretty good shape. The big lead issue is the
    Class VII, Class VIII conversion at the National Center for
    Environmental Prediction. We need to get that Class VIII up and
    operating. That is our lead issue.
        Mr. Wamp. Okay, keep us posted as the year goes by on that
    particular issue. I know with all the events that we have had
    in the last weeks and months and years even, that should be a
    primary concern.

                            lands legacy initiative

        And then furthermore, kind of following up on that, being
    on Interior I am, like Chairman Regula, concerned somewhat
    about Lands Legacy because it is a multi-agency--how many
    agencies are involved in Lands Legacy?
        Secretary Daley. I think there is somewhere around five or
    six, at least.
        Mr. Wamp. And as you say, five or six, and the total
    expenditure is somewhat unclear. And you said earlier you are
    not exactly sure how the land management issue would be
    handled. And one of the concerns we have on Interior, not being
    paranoid, but just being concerned and cautious, is any of this
    kind of a back door approach to some of the issues relative to
    Kyoto, climate change?
        I notice that on your natural resource initiatives in your
    portion of Lands Legacy, Ocean 2000 and Climate in the 21st
    Century are the names of some of these programs. Last week we
    had Secretary Richardson appear before the Interior
    Subcommittee and surprise us with an emergency $14 million
    dollar request for Y2K compliance for a nuclear reactor in the
    former Soviet Union.
        That is kind of a side issue. But there is so much global--
    so many global problems now, and I just wonder--I guess
    clarification that your department--or there is not an
    initiative to try to circumvent, in the absence of a Kyoto
    Treaty and the Senate ratification there, that this is not part
    of an effort to try to put together a multi-Agency, hard to pin
    down, hard to define, multi $100 million dollar initiative to
    try to implement some of the climate change initiatives that
    you cannot get approved.
        And therefore, if you just split it out, spread it out,
    split it up and make it confusing, maybe they do not know what
    we are doing with a whole lot of money coming from ten
    different directions. And on the Interior Subcommittee, we feel
    some of that happening, but you cannot really put your finger
    on it.
        Secretary Daley. None of the funds for the Lands Legacy
    program in the Department of Commerce will be used for
    atmospheric conditions. And now, quite frankly, if our
    ecosystem improves, that is going to help the objectives of a
    Kyoto. But those objectives are what we all share.
        But I can assure you that this is not being put together
    and our programs in the Department of Commerce are not being
    put together for the purposes that you fear.
        Mr. Wamp. And so the $105 million dollar request for fiscal
    year 2000 is just for lands in the areas that you described
    earlier and the preservation of those lands which will improve
    the ecosystem, and it is just basically a domestic initiative
    through the Department of Commerce?
        Secretary Daley. Yes.
        Mr. Wamp. Okay.
        Thank you, Mr. Chairman.

                           CARIBBEAN BASIN INITIATIVE

        Mr. Kolbe. Thank you, Mr. Chairman and Mr. Secretary. My
    apologies for not being here. But when we have these multiple
    committees and as chairman of one subcommittee who was chairing
    a hearing this afternoon it is difficult to be two places at
    once. So I am sorry I was not here earlier.
        I have a feeling there has probably been a few questions
    asked of you about the census today. [Laughter.]
        Secretary Daley. No, it did not even come up today. We are
    waiting. [Laughter.]
        Mr. Kolbe. So I think I will just pass on that one.
        Secretary Daley. Thank you.
        Mr. Kolbe. Except to let you know that I share the concerns
    that my colleagues on this side of the aisle have expressed
    about your idea for two numbers in the census.
        Let me ask you a couple of other issues here that I have
    some concern about. We are going to consider a supplemental
    tomorrow that is going to have some money for the Caribbean to
    cover the extraordinary costs of Hurricane Mitch and Hurricane
    Georges. I was down there with the Vice President's wife
    shortly after Hurricane Mitch hit Honduras, and the devastation
    is absolutely extraordinary.
        But I am also concerned because that supplemental does
    not--and I think appropriately, since this is not an
    appropriations bill--not include anything dealing with what I
    would consider the long term problem, and that is trade
    enhancement.
        Congressman Crane and I are preparing tomorrow to introduce
    legislation for a Caribbean Basin Initiative, which I know you
    are familiar with. And I am wondering if you might comment on
    the need for some kind of a long term economic development for
    the Caribbean region and Central America.
        Secretary Daley. I share your concern, Congressman. As you
    know, the Administration supports the Caribbean Basin
    Initiative. Many of the industries in the Caribbean have been
    dramatically negatively impacted over the last number of years,
    especially since NAFTA was passed.
        And we are hopeful that Congress this year will move
    forward on that and some other trade issues.
        We have put together, out of the Department of Commerce, a
    team that we took to Central America about a month and a half
    ago that David Festa headed. And we have come back, and
    reported to the U.S. businesses to get them engaged in looking
    to help in Central America to do the sort of projects that are
    needed by virtue of this hurricane.
        And we are reaching out to the business community to tell
    them one of the opportunities that may be there to help bring
    our expertise and to encourage them to continue the sort of
    support unilaterally that they have done in a humanitarian way.
        But as far as the trade issues are concerned, I think we
    have got to look to find ways to help the Caribbean not just
    through aid, but some additional trade initiatives. First one
    and the best would be the Caribbean Initiative, in my opinion.
        Mr. Kolbe. Well, thank you. I happen to agree with you.
    Long term, I think it is the most important thing that we could
    do for that region.

                  WORLD TRADE ORGANIZATION MINISTERIAL MEETING

        On another trade related topic, do you have anything in
    your budget--I guess it would really be for this year, but
    maybe in 2000 budget request--for the preparation for the WTO
    ministerial meeting that will be taking place here this fall?
        Are you going to have--I know that is primarily USTR's
    responsibility, but Commerce has a large role to play in that.
        Secretary Daley. We will play a large role but we are
    trying to figure out right now how we can be supportive of the
    USTR. To be frank with you, we have not allocated people yet to
    the program. We are waiting to have all of the interagency
    process develop, what it is each of us will be doing.
        Mr. Kolbe. What takes place, of course, here in the United
    States, as you know, and there will be a large operation that
    goes with that--and I would just be interested in knowing that
    role. As you see that developing, please let us know what role
    you see Commerce playing in terms of support, research, and the
    preparation for the various topics that will be coming up at
    the meeting.
        Secretary Daley. We have been in consultation, obviously,
    with the Trade Representative's office, State Department, the
    other agencies of Government to try to help lay out the agenda.
    And we have not, as I say, allocated personnel or resources
    yet.
        But we know, because we have such a large piece of that,
    our Market Access and Compliance unit and our Trade Development
    unit in ITA are going to put substantial resources to support
    USTR.
        [Clerk's note.--The following additional information was
    provided for the record:]

        While we have no increase request in the FY 2000 Budget for
    the Department's involvement in the World Trade Organization
    (WTO) Ministerial, we have an increase request in the budget
    for our Market Access and Compliance unit (MAC). I would
    anticipate that some of these resources will be used to assist
    in Ministerial work.
        ITA will be actively involved in preparing for, and
    participating in the WTO Ministerial. Our MAC unit will be
    working closely with the whole U.S. Government interagency team
    on issues ranging from government procurement to technical
    barriers to trade. Our sectoral analysts from our Trade
    Development unit will be working with their USTR and other
    agency counterparts on issues ranging from tariffs to non-
    tariff barriers to key U.S. manufactured goods and services
    exports and will consult actively with U.S. industry. Our
    Import administration staff will be working to ensure that the
    new negotiations to reinforce our ability to aggressively
    enforce the nation's trade laws.
        Once the Ministerial is concluded, we expect Commerce to
    play an active role in virtually all the negotiating groups
    that will likely be put in place to conduct the negotiations.
    This has been the pattern in past negotiations.

                              steel import crisis

        Mr. Kolbe. Thank you. I know before I came in there was
    some discussion about steel imports and concerns about anti-
    dumping.
        Is it the Administration's view that we need legislation to
    deal with this recent surge?
        Secretary Daley. At this point, we believe the actions that
    have been taken through the existing dumping laws have
    addressed the concerns of industry and the workers last year,
    and that was to stop the import surge that came in. We believe,
    based upon December-January numbers, there has been a
    substantial, over 70%, decrease from Japan.
        I think it is 90% from Russia. And we think we have
    addressed the problem as far as those three countries which
    were the three largest importers of steel in the United States,
    hot rolled steel specifically. So we think we have gone a long
    way to slow down, if not stop, in the hot rolled area the
    dumping that went on last year, which did have an impact, as we
    know, on the steel industry and steel workers.
        Mr. Kolbe. Thank you.

                                     NAFTA

        And finally, Mr. Chairman, my last question would be--it is
    really more of a statement, I guess, than a question. I
    understand before I was here there was some criticism of the
    North American Free Trade Agreement. And I just want to say, as
    one who does live near the border and sees the effects of this,
    certainly there are problems that have resulted from this.
        But I do not think anybody can look at NAFTA and see that
    it has not been overall a benefit to the United States as well
    as to Mexico. The steady increase in the amount of trade that
    we are doing with Mexico, both imports and exports to Mexico,
    has been very, very substantial through the years.
        And you look at the job creation in the United States, the
    low unemployment rate, one would be very hard pressed, I think,
    to attribute any major macroeconomic sense, any kind of job
    loss to NAFTA. Of course there are jobs that shift around
    everywhere--whether it is to Malaysia or whether it is to
    Mexico.
        That happens all the time. But I think by and large there
    has been a tremendous benefit. And certainly the help that it
    gave Mexico in the peso stabilization after their peso
    devaluation occurred in 1995 I think has been very substantial.
        I do not know whether you want to just comment on that.
        Secretary Daley. I would agree with you. Mr. Taylor had
    asked the question, based upon dislocation that has occurred in
    his district, in his opinion, by virtue of NAFTA. We, as I
    stated to him, share the same sort of concern.
        But at the same time, we believe it has been extremely
    helpful. And I know in 1993 you played a most important role in
    passage of NAFTA. And so I think--we believe strongly that it
    has been a positive for the United States and for our two
    neighbors who have now become two of our top three trading
    partners.
        Mr. Rogers. Thank you, Mr. Kolbe.

                             CENSUS OPERATING PLAN

        Now Mr. Secretary, back to the census. Have you seen a
    detailed, operational plan for the census?
        Secretary Daley. I have seen the plan, the summary that Dr.
    Prewitt announced last week. We will be meeting to go through
    the master activity schedule as it is laid out and as it is
    finalized.
        Mr. Rogers. But you have not seen it yet, the Master
    Activity Schedule?
        Secretary Daley. I have not seen the one that will be
    finished and finalized. I saw one my last visit about a year
    ago out there that obviously is not accurate.
        Mr. Rogers. But you have not seen the one that they are
    planning on now. How can you say that then it is feasible?
        Secretary Daley. Well, the people at the Census Bureau, the
    people who are charged with develop----
        Mr. Rogers. I am asking you. I will ask them next week.
        Secretary Daley. Quite frankly, Mr. Chairman, not being an
    expert or a statistician----
        Mr. Rogers. You cannot say?
        Secretary Daley. Independently, in my own knowledge, I
    could not tell you that plan, based upon just knowledge that I
    had in and of myself, is feasible. But as we all do, we depend
    on the people who develop the plans and are the experts based
    upon their experience, both those who have been at the Census
    for years and the people that we have brought in to put this
    plan together.
        Mr. Rogers. Well, you are willing to trust the Bureau
    Director to say that it is feasible, right?
        Secretary Daley. Yes, sir.
        Mr. Rogers. Well, good for you. But we do not do business
    that way on this Subcommittee. We need to see the plan before
    we determine that it is feasible. And we just cannot do that
    because you have not been forthcoming with the plan, though you
    have had every day you have been here as Secretary, and then
    before you we had the other secretaries who would not show us
    the plan.
        How do we know that the statistical adjustment procedure is
    accurate? The Bureau, as I understand it, plans to do the same
    procedure tried in 1990 on the statistical adjusting. And yet,
    we learned almost three years after the fact, after that census
    was over, that the adjusted numbers advocated by the Census
    Bureau were wrong.
        They overestimated the undercount by a full percentage
    point. Now you claimed to have fixed the problem for 2000, but
    we have no way of knowing that because we cannot get an
    evaluation of the dress rehearsal. We have not even seen that.
        We will not see that, we are told, until later this spring.
    Yet, you are up here asking for your budget and it just will
    not work that way.
        Comments?
        Secretary Daley. I would just say, Mr. Chairman, that I
    believe that the data from the dress rehearsal has been
    supplied to the Committee, and surely the report by the
    Director on the dress rehearsal has been put out. Whether it is
    exactly what you or your staff wanted--if there is a
    clarification as to what you need, I would surely go back to
    the Census and accomplish what you want.
        Mr. Rogers. Well, the report that they gave the staff said
    a complete evaluation of the results will be provided later
    this spring. So we just have not seen it. We have seen a rough
    summary, but we do not do business that way.

                               TWO NUMBER CENSUS

        Now, to follow up on Mr. Miller's line of questioning, for
    four years the Administration argued blindly for a one number
    census, arguing that ``anything else would mean chaos and
    endless litigation,'' to quote you and your staff.
        The Supreme Court says you have to actually count now for
    apportionment purposes. Now you quickly change gears and say
    well, two numbers are fine, a two number census is fine. I
    guess what I am going to ask you is who is going to decide
    which set of numbers to use for whatever purpose?
        Will States be given the option of using the actual count
    or will they be able to pick the Clinton count?
        Secretary Daley. First of all, Mr. Chairman, as I stated,
    we wish we had one number. We need to have the most accurate
    number, however, and we wish that the Court had ruled that use
    of sampling for apportionment was legal. We would have had one
    number that we could put forward that we believe was the most
    accurate.
        Right now the States have the option. They can do their own
    census. We supply the number to them for redistricting
    purposes. The States can do whatever they want with it for
    redistricting purposes. They could go off and decide whatever
    method, as I understand it, they would want to use.
        So they could conduct their own census. They could take our
    number and, in their individual wisdom, decide how they want to
    use it or whether or not they want to use it at all.
        Mr. Rogers. So we could see a scenario where New York State
    chose the Clinton numbers to redistrict within the State,
    Arizona picks the actual enumeration numbers for redistricting
    within their State, and we wind up with these two gentlemen
    representing districts that are not equal?
        Secretary Daley. Before----
        Mr. Rogers. Do you think the Supreme Court might have a say
    in that?
        Secretary Daley. The Supreme Court may have a say in that.
    But even before this census--in the 1990 census, New York, in
    their individual judgement, could have decided not to take the
    number that was done by the Census and conduct their own census
    and move forward.
        They had that choice at that point.
        Mr. Rogers. Well, I think most State constitutions and
    State laws read ``the official decennial census number.'' So my
    question to you is--which one of these numbers will you
    designate if you do any? Are you going to designate one of the
    two numbers as the official one?
        Secretary Daley. We will forward to the States for
    redistricting or for the apportionment of Federal funds the
    adjusted number that is the most accurate number for them to
    use for those purposes. What they then decide to do with those
    numbers I would imagine legally is up to the individual States.
        Mr. Rogers. But will you also furnish them the actual
    enumeration numbers?
        Secretary Daley. They will have, for apportionment
    purposes, that number for each of the States. That will be
    available.
        Mr. Rogers. Will you designate, or will the Department or
    anyone else designate, either of these numbers as the official
    census number?
        Secretary Daley. We will--for apportionment purposes, we
    will send the number to Congress. According to the law, that is
    required. And then for redistricting and for distribution of
    Federal funds purposes, we will supply the official number for
    those purposes from the census that will be an adjusted number.
        Mr. Rogers. So you are going to call the adjusted number
    the official number?
        Secretary Daley. For the redistricting and for
    apportionment of Federal funds, that will be the number that
    will be used. For apportionment of House seats that will be
    given to the Congress, the number based upon the decision of
    the Supreme Court will be the one that will be given to you.
        Mr. Rogers. Again, to repeat the question, will you
    designate----
        Secretary Daley. I am not trying to play games. I do think
    that I have tried to answer it, and I think there is a number
    for apportionment purposes that we will give the Congress based
    upon the Supreme Court ruling. And we will supply to the
    States, for their redistricting purposes, a number.
        Now, whether we have two official numbers, one that is
    official for apportionment purposes or one for redistricting
    and, slash, distribution of funds, let me ask for a moment
    here, if I may.
        Yes, they are both official. One is official for
    apportionment purposes and one is official for the other
    purposes that are feasible based upon the court decision.
        Mr. Rogers. The lawyers are lining up at the doors.
    [Laughter.]
        Now let us switch to another more pleasant topic, if we
    can. [Laughter.]

                             noaa budget proposals

        We try to wind up on a good note. NOAA. There are numerous
    problems to even get off the starting block with your NOAA
    budget proposal. First it calls for a 14% increase, a $280
    million increase. Fourteen million dollars in navigation fees
    as NOAA's share of the Coast Guard fee on navigation and vessel
    traffic services that has been proposed and rejected twice.
        So it is not going to happen. Fishery management fees of
    $20 million that have been proposed three times in the last six
    years rejected by the Committees of the Congress. Not going to
    happen. One hundred and five million dollars from the Land and
    Water Conservation Fund to fund a number of initiatives in
    NOAA, whereas, the existing statute makes these funds available
    for the National Park System, National Forest System and the
    National Wildlife Refuge System. The subcommittee that has had
    jurisdiction over the Fund has always been the Interior
    Subcommittee.
        One hundred million dollars for an unauthorized program for
    grants to four States for Pacific coastal salmon recovery, the
    exact uses of which no one has been able to define, and which
    the Department did not even request as part of its budget but
    came forth as a last minute add on from somewhere on high.
        Numerous new initiatives and increases for programs under
    the Coastal Zone Management Act and the Endangered Species Act,
    which are unauthorized. Where do we even start on a budget
    proposal that has so many possibles and ``ain't never gonna
    happens'' in it as this one?
        That is more pleasant than the last one. [Laughter.]
        Secretary Daley. I thank you for the courtesy, Mr.
    Chairman.

                                 noaa user fees

        On the fee situation, we do feel there is obviously a
    disagreement, but we do feel that those--that there are
    circumstances where discrete users of these services like
    navigation fees and the private sector commercial users who
    are--who depend upon those services that we provide should be
    paying a certain amount, small amount that it is, in order to
    cover some of the expenses to provide all of these services
    that we provide for much of the private sector.
        We feel strongly that as the costs increase for a number of
    these programs and a number of these services that we are
    providing to private sector, that--and we have done it in
    certain other areas, in ITA and others, that the users of these
    services should be paying a small amount of fees for some of
    these services.

                            lands legacy initiative

        We would hope that Congress would begin to agree that some
    of these private sectors should be using this. We do believe,
    as I mentioned to Congressman Regula, that the Subcommittee
    does have authorization regarding the $100 million Lands Legacy
    issue to use those funds.
        We do want though a permanent sort of funding source after
    2000. And we would like to work with you and the Congress to
    come up with that. The other increases that you have cited we
    believe are extremely important to keep our economy strong and
    keep these parts of our Nation which are important to us
    strong, and the services that NOAA gives are extremely vital to
    many of these parts.

                          pacific coastal salmon fund

        The salmon situation, there has been an 84% drop in salmon,
    which is an important part of the economy of the northwest and
    some very difficult challenges for us in the Northwest to deal
    with based upon congressional action.
        And we will work closely with the States and the tribal
    communities in the Northwest to come up with a grant program
    and make sure that this money, if it is appropriated by
    Congress, will be well used.

                   international trade administration funding

        Mr. Rogers. Now the trade deficit, record trade deficit,
    was announced the other day, up 53% from 1997 in large part
    because of a decline in exports. You propose relatively modest
    increases in positions for the U.S. and Foreign Commercial
    Service and in Market Access and Compliance for enforcement.
        There is a crisis out there in trade--in the balance of
    trade. A lot of cheap imports coming in, decline in exports
    despite all the export promotion that you have been doing.
    Where is the response to this trade imbalance in your budget
    other than a slight increase in foreign commercial service?
        Secretary Daley. There has not been a dramatic increase,
    you are right, in the ITA. Our request for the increase in
    Market Access and Compliance is an important step in trying to
    make sure that we enforce and have other nations enforce the
    agreements which we have reached.
        Our export promotion and our request we believe is
    adequate. In spite of the tremendous drop, as you mentioned, in
    exports, we believe that our 100 domestic offices and our 75
    international offices do fill that void. And we will be even
    more aggressive than we have been.
        But the trade deficit is a result of two things, Mr.
    Chairman. As we know, one is our strong economy, which we hope
    to continue. And second of all, because of the drop in the
    Asian and some other economies, one of the things that I know
    the Congress has done with their replenishment of the IMF and
    the strong statement which Congress made on that behalf was to
    try to strengthen these economies. Because if they do not come
    back, then the likelihood of our exports increasing will
    diminish.

                           export promotion expansion

        If I may, Mr. Chairman, our $13.8 million expansion of the
    U.S. and Foregin Commercial Service, the following are its
    components: $4.2 million to open six new commercial posts in
    Subsaharan Africa and establish an African-based training
    center; $4.6 million to open three new commercial posts in Asia
    and grow our presence in China and the Philippines; $2 million
    in Latin America to open new posts in El Salvador and Uruguay
    and enhancing our staff in Mexico, Brazil, Argentina and
    Trinidad-Tobago; $1 million for the three standard attaches in
    Russia, China and South Africa. This will ensure that our
    standards that develop are transparent and harmonize; and $2
    million for Joint Export Technology Project with NIST and the
    Manufacturing Extension Partnership to help manufacturing SMEs
    that Congressman Taylor talked about enter the export market
    easily.

         u.s. and fcs expansion--relationship with department of state

        Mr. Rogers. Now, your request includes an increase for FCS
    personnel in Asia, Latin America and Africa. The State
    Department budget request asks $3 million for an increase in
    their market promotion efforts in those same countries.
        Are you aware of the overlap? And if so, why?
        Secretary Daley. To be honest with you, I am not aware of
    the fact that they have requested that amount for promotion. We
    try to cut down the duplication that may occur between the
    agencies. I know the Department of State has been very
    aggressive in trying to, as we do, promote U.S. exports and
    U.S. business opportunities.
        And so I would imagine we could complement each other with
    those sort of amounts and activities.
        Mr. Rogers. Do you think you can better handle export
    promotion or can the State Department?
        Secretary Daley. Of course I believe we can do a better
    job.

                   advanced technology program funding level

        Mr. Rogers. Halt the presses. Finally, about ATP. I was
    surprised at your request for the Advanced Technology Program,
    $251 million. That is a $54 million increase over the '99
    level.
        Last year, in the negotiations to wrap up the
    appropriations bills in October, the massive deal with the
    White House, we had a series of discussions with OMB about
    arriving at a funding level for ATP that could remain more or
    less level for the next couple of years and get us out of this
    annual debate over funding.
        We thought we had that settled last year, and that level
    was approximately the level we ended up at in '99. You were not
    there at those discussions, but what can you tell us about how
    ATP ended up requesting a $54 million dollar increase contrary
    to the agreement we had with OMB last October?
        Secretary Daley. Now, Mr. Chairman, as you stated, I was
    not there. If there was an agreement that was made, it had not
    been brought to my attention. I think we had this discussion
    once before I think in the first year I sat before your
    Subcommittee.
        We believe ATP has been a successful and a positive
    program. We think we have also changed the nature of it so that
    it is a program that is targeted to small businesses. In '98,
    67% of the new awards went to small businesses, which I know
    was a concern to the Subcommittee when I first came here in the
    makeup of the ATP program.
        So I cannot, to be frank with you, Mr. Chairman, comment on
    an agreement that you say was reached in October regarding the
    funding. But we have been committed to an increase in ATP
    because we think it is a good program and has worked.
        Mr. Rogers. OMB was the one pushing that deal to fund ATP
    them again this year at a comparable level. They were the ones
    that pushed that deal and we reluctantly, more or less, agreed
    to it. So we feel a little bit sandbagged here, as you might
    suspect, by OMB.
        I wonder if it is ever going to get to the point when we
    ask OMB to come and sit beside you when you testify. I think
    that would be altogether appropriate because they are driving
    so many of the decisions that you have to come and defend, and
    I regret that.
        Maybe we ought to just subpoena the OMB up here to tell us
    the figures for the 2000 Census because they are driving you
    and everyone else. What do you think about that?
        Secretary Daley. I think I probably should not comment on
    what I really think--[laughter]--and just say that I would
    leave it at that.
        I do--well, I better leave it at that.
        Mr. Rogers. Go ahead. [Laughter.]
        Secretary Daley. No, I think----
        Mr. Rogers. I won't tell nobody.
        Secretary Daley. They are sitting behind me and I can feel
    their eyes staring at me now, so I better leave it.
        Thank you for your comments though, Mr. Chairman.
        Mr. Rogers. Anyone else have questions?
        Mr. Serrano.

                         u.s. and fcs overseas security

        Mr. Serrano. Thank you, Mr. Chairman.
        Secretary, this may come as a shock to you, but we have
    decided up here that when Dr. Prewitt comes we are only going
    to ask him about import and exports--[laughter]--and never
    touch on the census.
        And let me just ask you something here. We had a hearing
    last week on embassy security. And I know that it has been
    touched on, the fact that there will be more people now from
    your Department based overseas. How does the increased threat
    to U.S. facilities and staff overseas impact the Commerce
    Department's ability to successfully improve export
    opportunities for American business?
        Is that something that you have to worry about as you set
    out to do business?
        Secretary Daley. It is of concern to us, Congressman. Most
    of our commercial service operations and personnel are located
    in the embassies, so they are secure facilities. We had begun a
    program to begin to move some of those out of the embassy to be
    a little more accessible to our potential clients and
    customers, but that looks as though it may be difficult to do.
        We are doing an analysis of our commercial service
    operations as to their security level, and I would obviously
    like to talk to you on the side about that. But we feel
    confident that our people are secure. We have experienced, as
    so many other Federal employees did in the bombings in Kenya
    and Tanzania, many people who were injured.
        We had four nationals in Kenya killed. We had two of our
    commercial service people seriously injured. So it is of
    greater concern to us today, quite frankly, than we thought it
    would be a year and a half ago when we began a process to move
    commercial service people out of embassies to be more
    accessible.

                            trade with latin america

        Mr. Serrano. And I notice that when you were mentioning the
    different areas, you did mention Latin America. And for years,
    Mr. Secretary, there was a feeling south of the border and in
    some areas like the south Bronx and L.A. and so on that we were
    not making that extra push to trade with Latin America.
        So notwithstanding whatever may come from NAFTA, and some
    people on this panel support it and others oppose it, is there
    an effort now to reach out to those neighbors who, for many
    years, were neglected in our trade efforts?
        Secretary Daley. We are very aggressive. And in our request
    to the Committee for additional resources for the U.S. and
    Foreign Commercial Service, Latin America is one of our primary
    targets. It has been one of the few markets in the world over
    the last year of turmoil that have continued to see an increase
    in exports from the United States.
        We believe strongly that if we could move to the free trade
    area of the Americas eventually, that will be very helpful in
    increasing our exports and increasing the economic integration
    of our hemisphere, which will only help us and give U.S.
    companies who are disadvantaged right now greater opportunities
    in Latin America.
        So it is a focus of ours. I have done one trade mission. I
    am leading another trade mission later this year hopefully to
    South America and Central America. And it is a major focus for
    us, as I know it is for the entire Government.

                   analysis of potential for trade with cuba

        Mr. Serrano. Let me ask you a question on one of my other
    favorite subjects in this House. Do you know, Mr. Secretary, if
    the current trade embargo on Cuba prevents your agency from
    doing any analysis as to what that market would look like for
    American business if it was open?
        I mean, without obviously making any statements about
    whether it should be. The Administration's policy is to
    strangle the Government until they cry uncle. But those of us
    who think that will change someday wonder what will that market
    be like for us, especially since I am one of those who believes
    that the embargo against Cuba will end when Wall Street wants
    it to and when American farmers scream the way they are
    beginning to scream now.
        Do you know if--so my first question is, has anything like
    that ever happened that you know of, any study? And secondly,
    do you know if current Helms-Burton laws and so on prevent you
    from going out and doing that study now in anticipation of a
    change?
        Secretary Daley. I do not know the answer to the second
    question, Congressman, whether we would be prohibited. I will
    get back to you and let you know. All I can tell is from
    anecdotal information. We hear from U.S. companies frequently
    of their strong feeling that there is real opportunity in Cuba.
        How to quantify that and put a number on it, I would like
    to give some thought and talk to our trade people and see if
    they have--if we have not done it, do they have outside sources
    that have done it and get it to you.

                                trade with china

        Mr. Serrano. And my last question on trade is: On the other
    side of our misled policy--and you will notice, Mr. Chairman, I
    am calling my party's policy misled, so I am very fair on this
    kind of thing--we trade with China, but at the same time we
    denounce China everyday for its behavior, its government
    behavior.
        Does that create--what kind of a situation, I wonder, does
    that create for your agency? I mean, on one hand part of your
    role in life is to make sure we trade more with China. On the
    other hand, part of your role is to be part of an
    Administration and a Nation as a whole that condemns China on a
    daily basis.
        Is that a problem or is that a problem for someone else?
        Secretary Daley. Well, it is a problem in the sense that if
    there are opportunities for U.S. businesses, and therefore U.S.
    working men and women around the world that are--and markets
    that are close to us, especially a market that would be so
    close and we would probably be in an advantageous position, it
    puts us in the Commerce Department in a position of regretting
    that.
        But it is obviously decisions that Congress has made that
    has prevented us and the U.S. business community from doing
    business, so we just move on to markets that we know it is
    legal to do and just support our U.S. businesses.

                         minority undercount in census

        Mr. Serrano. My last comment, Mr. Chairman, getting back to
    our favorite subject of the day, it is interesting to note that
    I have a special interest in a fair count since the 16th
    Congressional District in the Bronx, which is represented by
    that charming, debonair Congressman Serrano, is the most
    undercounted district in the Nation.
        It is also interesting to note that of the first 35, Mr.
    Chairman, districts in order of the most undercounted to the
    least, of the first 35, 28 are represented by the Hispanic or
    African-American members of Congress.
        Now, usually, in today's world, that means that those
    people who represent those districts usually means that the
    population of those districts reflects the representation in
    our case, meaning that the top 28 districts (not representative
    of the 35) are minority districts, if you will, which are
    probably the ones obviously in need of the education dollars
    and health care dollars and so on.
        So I make that point not only to bring my sympathy part
    into it on being the most undercounted district in the Nation,
    but secondly to remind us that a fair count means education
    help, it means health care help, it means job incentive
    programs for the people who we most need it for so that they
    can grow up or later on become good taxpaying citizens.
        And with that, Mr. Secretary, I thank you for withstanding
    us--all of us today. And we look forward to working with you in
    making sure that all these things take place. And when we do
    end the embargo on Cuba, I want you to--do not laugh. It could
    happen. You never know.
        We would want you to have some figures for us on that.
        Secretary Daley. I will get back to you on both of those
    questions, Congressman.
        [Clerk's note.--Subsequent to the hearing, the following
    information was provided:]

        The Helms-Burton laws do not prevent the Department from
    doing a market analysis of Cuba. However, in light of Helms-
    Burton and the Cuban Assets Control Regulations which prohibit
    the export of products, technology and services from the United
    States and Cuba (with the exception of publications and other
    informational materials, and certain humanitarian goods such as
    medicine and medical supplies), we have not undertaken such an
    analysis given that U.S. companies can not take advantage of
    such a product. We are prepared to undertake such an analysis
    should U.S. policy toward Cuba change.

        Mr. Rogers. Mr. Secretary, we had promised to have you out
    of here by 4:00. We have missed it by 12 minutes, and I
    apologize for that. Thank you for your time and your attention.
    We look forward to hearing from you soon.
        Secretary Daley. Thank you very much, Mr. Chairman.

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                                             Wednesday, March 17, 1999.

                       UNITED STATES TRADE REPRESENTATIVE

                                    WITNESS

    CHARLENE BARSHEFSKY, UNITED STATES TRADE REPRESENTATIVE

                   OPENING STATEMENT CHAIRMAN ROGERS

        Mr. Rogers. The committee will come to order.
        This afternoon we are pleased to welcome the United States
    Trade Representative, Ambassador Charlene Barshefsky. You are
    here on an interesting day in the House. We are debating, on
    the House floor legislation to respond to the surge in steel
    imports. You are also here at an interesting time as the
    President prepares to host the Chinese premier and as the U.S.
    prepares to host the World Trade Organization ministerial
    conference later in the year.
        A lot of these issues are much weightier than your budget,
    which, in comparison with many of the other agencies that we
    deal with, is relatively modest.
        So welcome.
        Ms. Barshefsky. Thank you, Mr. Chairman.
        Mr. Rogers. Mr. Serrano.
        Mr. Serrano. Thank you, Mr. Chairman.
        I want to join you in welcoming the Ambassador, and to
    remind ourselves that our Nation should participate in all
    trade activities, and, at the same time, demand the price, if
    you will, for some of that participation. We should make sure
    that we demand from our partners respect for the people who
    work and for environmental laws and beliefs throughout the
    world. I am looking forward to Ambassador Barshefsky's
    testimony and looking forward to joining you, Mr. Chairman in
    doing what we have to do to make her job easier and make our
    efforts much easier.
        Mr. Rogers. Madam Ambassador, your statement will be made a
    part of the record. If you would like to summarize it for us,
    we would be happy to hear from you.

               OPENING STATEMENT OF AMBASSADOR BARSHEFSKY

        Ms. Barshefsky. Thank you very much, Mr. Chairman, and
    Members of the committee.
        I welcome this opportunity to appear before you. Let me
    just begin by thanking the subcommittee for your support over
    these many years, as well as in terms of market opening as well
    as our budget.
        Let me just say that it is a great privilege to work with
    career employees of the Office of the U.S. Trade
    Representative. We are among the smallest agencies in
    Government.
        Our budget request is $26.5 million to support 185 full-
    time employees. With this staff we address over $2 trillion in
    trade volume, an increase of nearly three-quarters of a
    trillion dollars since 1992. We monitor and enforce a network
    of over 270 trade agreements negotiated since 1992, and we
    develop and execute our agenda for the future.
        The budget request we have made reflects our need to
    upgrade security in Washington and Geneva, to add seven
    additional full-time career employees in the agriculture,
    China, Japan, Western Hemisphere and Africa shops to help us
    address a much greater volume of trade, and a growing network
    of agreements, to fund legislated employee pay raises, to
    offset increased travel expenses to several key regions of the
    world and to improve our translation capabilities.
        The request also protects USTR's tradition as a lean agency
    in which each full-time employee has great responsibility and
    which can act quickly to deliver tangible results for Americans
    through new job opportunities, better jobs, higher farm
    incomes, and a rising standard of living, and these
    capabilities are evident, we believe, in the results we have
    achieved.
        Since 1992, U.S. exports have expanded by 51 percent. This
    is despite the Asian crisis and the fact that 40 percent of the
    global economy is in deep recession.
        We have had, as you know, uninterrupted economic growth,
    the longest peace-time expansion in our history, with 18
    million new jobs, and an employment rate the lowest since 1970.
    Wages, home ownership and family living standards fall off
    significantly.
        Our goal is to build upon this record into the next century
    based upon the long tradition of bipartisan commitment to fair
    and open markets and close cooperation between us and the
    Congress, which has characterized American trade policy since
    the Second World War.
        Let me, if I could, turn to our agenda for the year ahead,
    beginning with enforcement.
        First of all, the crisis that the American steel industry
    suffered when imports rose sharply, and suddenly, well above
    historic levels.
        The President's January 7th steel report laid out a
    comprehensive action plan to address this import surge. This
    provides for a rollback of imports from Japan, the key source
    of the import surge, to pre-crisis levels, by stating that the
    Administration is prepared, if necessary, to self-initiate
    trade actions against Japan.
        The plan also outlines actions by the Commerce Department
    to expedite ongoing antidumping cases, and apply dumping duties
    retroactively.
        In addition, the Administration expresses strong support
    for an effective safeguard mechanism and commits us to continue
    to assess the effectiveness of steps taken.
        Since this report, the Commerce Department has announced
    large preliminary dumping margins with respect to Japan,
    Russia, and Brazil.
        We've initialed two agreements with Russia, including a
    suspension agreement on the carbon flat roll dumping case, and
    a broader agreement under the market disruption article of our
    bilateral agreement with Russia.
        These agreements would roll back and cap steel imports from
    Russia, the second largest source of our 1998 import surge.
        In Korea, we have expanded expedited discussions on steel
    with the objective of permanently getting the Korean government
    out of the steel business. This encompasses the closure and
    sale of Hanbo steel and our attempts to ensure the expeditious
    market-based privatization of Korea's largest steel producer,
    Posco.
        Import statistics over the past two months show that this
    policy is working. Import volume of steel overall has fallen by
    34 percent in the last two months.
        Japanese, Russian, and Brazilian flat roll steel products
    are now virtually nil. At the same time, we have remained
    faithful to our own international commitments, thus doing our
    share to forestall a protectionist response to the global
    crisis by our trading partners, and retaliation, particularly
    against American agriculture, and steel-intensive manufacturing
    exports.
        Second, our efforts to open markets through trade
    negotiations are based upon a commitment to enforce the
    agreements we reach. We have initiated over 80 separate
    enforcement actions since 1993, including 44 at the WTO.
        As our action in the recent bananas case demonstrates, we
    expect our trade partners to meet their commitments, and we
    will use our rights to make sure that they do so.
        At the same time our own trade laws, special 301, regular
    301, section 1377 for telecom, are vital tools, but to ensure
    that we have maximum advantage of these laws, the
    Administration recently decided to reauthorize by executive
    order the substance of two laws for which authority had lapsed.
    Super 301 and Title VII on Government procurement.
        Let me now turn to our negotiating agenda for the years
    ahead and our legislative priorities.
        In his State of the Union Address last January, the
    President set out a bold call for the launch of a new round of
    multilateral trade negotiations. This will be launched when we
    chair and host the WTO's Third Ministerial Conference in
    Seattle this December, itself a monumental undertaking as the
    largest trade event ever held in the U.S.
        We envision a new type of global round of talks with three
    separate dimensions. First, expedited negotiations in a wide
    range of areas which would include, at a minimum, sharp
    reduction or elimination of industrial tariffs and nontariff
    barriers, market access and liberalization for services
    industries, including audiovisual, financial services, the
    professions, telecom, distribution, and others. Agriculture,
    including addressing the distortive practices of State trading
    enterprises, high tariffs, export subsidies, and addressing
    Europe's common agricultural policy as well as biotechnology,
    intellectual property, Government procurement, and the
    exploration of how the WTO can help create an international pro
    competitive regulatory climate, particularly in services as
    well as to advance our efforts against bribery and corruption.
        These negotiations would have clearly defined timetables
    and expectations, so we are no longer waiting six or eight
    years for countries to further open their markets.
        The second dimension of a global round would be
    institution-building, including, for example, capacity building
    amongst the least developed countries, so they can implement
    the obligations they undertake.
        Trade facilitation, particularly in the customs area, to
    ease the burden on our businesses, and more effective
    coordination between the WTO, on the one hand, and other large
    institutions like the IMF and The World Bank, the ILO, and
    others, as well as a commitment to greater transparency in the
    WTO itself.
        The third dimension of a new round should accommodate
    ongoing results. For example, we would like to see the
    completion of ITA II, that is, the extension of our information
    technology agreement. Transparency in Government procurement
    worldwide, a consensus on the APEC sectoral agreements,
    improvements in dispute settlement, and in electronic commerce,
    extension of the moratorium on tariffs applied to electronic
    transmissions.
        Our trade agenda beyond this new round is equally
    ambitious. I go through this in detail in my written statement
    but let me cite just a few examples.
        In China, we will continue to monitor and strictly enforce
    our trade agreements. At the same time, we will continue to
    seek broad market opening through our negotiations toward
    China's accession to the WTO.
        Premier Zhu's visit next month is a chance for China to
    advance this goal. We certainly hope that they take it, but
    delay in trade reform is not an option for China. We must be
    treated fairly in that market.
        In the Western Hemisphere, we are continuing talks toward
    the free trade area of the Americas with the aim of concrete
    market opening progress this year.
        In Europe, we are working to remove barriers and strengthen
    trade ties through our transatlantic economic partnership
    covering such areas as technical barriers to trade,
    biotechnology, intellectual property rights, Government
    procurement and electronic commerce.
        In Africa, we're implementing the President's initiative to
    improve trade relations and ensure Africa's better integration
    into the global trading system.
        This, coupled with our desire to see the Africa Growth and
    Opportunity Act pass, should make a very substantial difference
    in our trade relations with that continent.
        In Japan, we are, we believe, effectively addressing last
    year's rapid surge in steel imports. At the same time, we are
    continuing to work on opening and deregulating Japan's market.
    The visit of Prime Minister Obuchi here, in May, I think will
    help those efforts along quite substantially.
        Apart from Japan and China, in Asia, we continue building
    consensus for further market opening in APEC, and in the Middle
    East, we are promoting regional integration based upon the
    foundation of our free trade agreement with Israel and the
    creation of new Israeli-Jordanian industrial zones whose
    products will receive preferential access to the U.S.
        We are working on similar projects with Egypt and the
    Palestinian Authority.
        We are also working to ensure that as trade expands
    environmental standards rise, and respect for internationally
    recognized labor standards grow, and we have a variety of
    programs with respect to international environmental
    disciplines and international disciplines on worker rights,
    that we are pursing at the present time.
        And last, our legislative agenda. Of course the
    Administration urges the renewal of trade negotiating authority
    for certain agreements. In addition, we strongly support
    legislation to continue the GSP program, to pass the OECD
    shipbuilding agreement, to renew trade adjustment assistance,
    to pass CBI parity legislation as well as, as I have already
    mentioned, the Africa Growth and Opportunity Act.
        In summary, the U.S. economy and the living standards of
    our citizens have benefited immensely from the work that the
    Administration and the Congress have done together.
        As we address a growing trade volume and enforce a larger
    network of agreements, our budget request will enable us to
    continue working with you and with the Congress as a whole as
    we carry this work forward into the new century and shape the
    trading world of the next generation.
        Thank you very much, Mr. Chairman.
        [The information follows:]

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                           satellite export licenses

        Mr. Rogers. Thank you, Madam Ambassador.
        Last month, the administration rejected the sale of a $450
    million satellite to a business group that holds ties to the
    Chinese Government. This is a result of the fact that previous
    satellite exports have resulted in providing the Chinese the
    scientific expertise to improve their missile launching
    capacity.
        What is your view on the decision to reject the sale of the
    satellite?
        Ms. Barshefsky. Mr. Chairman, USTR is not involved in the
    process of export license review on particular matters such as
    this. Obviously, I fully support the administration's decision
    in this regard.
        Mr. Rogers. Well, in the document, a report by the
    Secretary of State, which was issued January 25, 1999,
    transferring the authority to recommend on these types of
    matters, among the people to be consulted in that directive was
    the U.S. Trade Representative.
        So you are in the loop.
        Ms. Barshefsky. Well, we may be in the loop on paper but we
    were not in the loop with respect to rejection of this
    particular----
        Mr. Rogers. You were not consulted?
        Ms. Barshefsky. Certainly, I was not. I do not know if
    anyone in our office was, but I was not. I obviously support
    what the administration has done, but I was certainly not
    directly consulted; no.
        Mr. Rogers. It is supposed to be the Departments of
    Commerce, Energy, Transportation and the USTR. I am somewhat
    puzzled, why you were not consulted.
        Ms. Barshefsky. Mr. Chairman, I will get back to you, if
    anyone in our office had been consulted. I was certainly not
    directly consulted; no.
        Mr. Rogers. But nevertheless, you say you would support the
    administration?
        Ms. Barshefsky. I have no basis not to.
        Mr. Rogers. Given the revelations concerning the theft of
    critical nuclear technology by China at the Los Alamos
    laboratory, is this the appropriate time to reward China with
    entrance into the World Trade Organization?
        Ms. Barshefsky. Mr. Chairman, China's entry into the WTO,
    were it to occur, is hardly a reward to China. China would have
    to make a series of large unilateral commitments to open up its
    markets across the range of its economy. Goods, services,
    agriculture, with very few exceptions. In addition, China would
    have to commit to abide by the rules of the WTO.
        So this, by any means, would not be a favor to China. It
    is, instead, if China were to come forward with a commercially
    meaningful package of commitments, a way for the United States
    to begin to redress the extraordinary trade imbalance we have
    with China and gain access to the world's most populous and
    largest single market.
        Mr. Rogers. The New York Times' editorial last Sunday said,
    quote: ``It may be that problems with China can be managed
    through a more exacting form of engagement that places less
    emphasis on commerce. It is abundantly clear that doing so will
    require more vigilance about protecting American interests, and
    a greater willingness by the White House to resist Chinese
    efforts to exploit the relationship.'' End of quote.
        Do you agree with that?

                        u.s. trade relations with china

        Ms. Barshefsky. I think we have to look at our overall
    relations with China and determine how best to proceed
    consistent with broad American interests, consistent with the
    global interests that we have in a stable and prosperous China,
    when it is constructive in the region in which China is
    located, not destructive and not destabilizing, and I think
    that will require a look at every facet of our relations with
    China, whether security, diplomatic, political, commercial,
    that whole range of interests, and be sure that we feel we have
    the right policy with respect to each of those areas.
        There's no single magic formula and there's no single
    bullet. I think in the trade area, in particular, where we are
    clearly at a disadvantage because of China's closed market and
    economic structure that is rather at odds with ours in the
    global community, that we would be wise to try and push China
    as much as possible toward internationally accepted commercial
    norms, toward market opening, and adherence to the rule of law.
        That I think is very much in our interest, whether or not
    we are talking about commercial matters per se.
        But to get China under multilateral surveillance, subject
    to the rule of law, subject to public and enforceable
    commitments, absolutely should be a goal of the United States
    and the fact that we might also benefit from that,
    commercially, is no reason not to see those changes in China
    occur.
        Mr. Rogers. Do you anticipate that entrance into the WTO
    will be supported by the U.S. when the Chinese premier comes to
    the U.S. next month?
        Ms. Barshefsky. I think the question, first off, is whether
    China is willing to step forward and make the commercially
    meaningful commitments that would be required for it to get in,
    which means market access in goods, services, and agriculture,
    adherence to the full range of WTO rules, reasonable transition
    periods where that's required, but not unduly lengthy.
        I think China in the first instance has to decide if it is
    ready to come forward. I think we have made important progress
    but there is still work to be done.
        If China were to come forward, obviously, Mr. Chairman, we
    would work with the Congress in terms of going through what it
    is this agreement would encompass and I have been doing a
    number of briefings on the Hill and we try to keep Members
    informed.
        I think we all would have to come to a common decision on
    this. But I do believe it is absolute in our interest if China
    will move ahead, will undertake the reforms we have been urging
    in this administration for six years, but for seven years, in
    prior administrations, if China is willing to do that, we
    should not be afraid to say yes.
        Mr. Rogers. You said that the U.S. would support their
    entry only if it is, quote, ``commercially meaningful.''
        Ms. Barshefsky. Yes.
        Mr. Rogers. What do you mean?
        Ms. Barshefsky. Sharp reductions in their overall tariff
    rates and elimination, over time, of their non-tariff barriers.
    Opening up their agricultural sector, including in commodity
    areas of critical importance to the U.S., you know, wheat,
    corn, cotton, soybeans, sort of the gamut of very, very large
    commodity exports as well as all the specialty agricultural
    products. The fruits and the nuts, and so on, and so forth.
        Opening up of their services sector. Distribution, for
    example, is absolutely critical. Financial services. Market
    opening in telecommunications, in professional services.
        You know, these accessions are of enormous complexity
    because they cover basically the entire trade regime of the
    acceding country, but I think this gives you some flavor.
        We are not looking for little change in China. This is not
    looking for incremental change in China. This would be very,
    very radical change from where China is at present.
        Mr. Rogers. What role do you believe Congress should have
    in approving China's entrance into the WTO?
        Ms. Barshefsky. I think Congress should obviously look at
    the agreements. You should certainly look at all the agreements
    we negotiate and obviously work with us. I do not think this is
    an area where the administration and Congress are on different
    sides.
        I think we all want the same thing, that is to say, a
    productive China and one that is moving toward international
    norms, including in commercial matters, and in the conduct of
    their trade regime, and I would hope that we could work
    together to achieve that.
        Mr. Rogers. Now even if China pledges to take a whole host
    of steps and make that radical change that you have mentioned
    to win entrance into the WTO, what reason is there to believe
    that China would follow through on those steps once it becomes
    a member and we have played our card?
        Ms. Barshefsky. Well, I think that we have a number of
    mechanisms that would be designed to help ensure that.
        One is of course that every commitment China would make
    would be fully enforceable. We are looking for very specific
    commitments, year by year, product by product, subproduct by
    subproduct.
        We do not want to leave anything to the imagination and we
    wish to avoid ambiguity.
        Second of all, China, for the first time, would have its
    entire trade regime subject to multilateral scrutiny.
        It is the first time the United States would not be alone,
    as we were on intellectual property rights and textiles issues,
    pushing China with Europe doing very little, with the rest of
    Asia doing very little. WTO accession gives every single member
    an interest in ensuring that China lives up to its obligations.
        Third, we would propose to include in China's protocol the
    ``rules of the road,'' if you will, a special provision which
    allows for multilateral review, every year, of China's
    adherence to its commitments.
        Are there problem areas? If so, what are they? What is the
    possible solution. So that we do not fall behind in China's
    implementation of its commitments.
        So I think those steps, coupled of course with our
    preserving all of our trade law rights, the United States would
    not be making one single change in its trading regime, nor
    would we alter in any respect our trade laws.
        So those WTO measures, coupled with our own trade laws,
    which will remain fully effective, we believe will be
    sufficient.
        This is a very complex undertaking. It will not be easy. It
    is not easy with Europe as we have seen recently. It will not
    be easy with China, but we do think we have the means in place
    to arrive at a credible means of enforcement.
        Mr. Rogers. Do you believe that Taiwan's entrance into the
    WTO would come before or after China's entrance?
        Ms. Barshefsky. Well, Taiwan's market access talks are not
    yet completed. In a WTO accession, the acceding country first
    negotiations bilaterally with each of its major trading
    partners and then multilaterally on the rules.
        Taiwan has not yet closed out, bilaterally, with Canada, I
    am not quite sure why, and there is some indication that there
    are several other countries that it may not have finished with
    yet, bilaterally.
        In terms of the multilateral rules, that negotiation is
    still ongoing in Geneva and is not yet complete. So I cannot
    give you a final time line on Taiwan.
        I do think that it has long been the anticipation of many
    WTO members that China and Taiwan would enter essentially
    simultaneously, a formulation with which Taiwan has generally
    been comfortable and with which China is comfortable.
        But were China's accession to stall, if China does not move
    forward, then I think we have to revisit that issue.
        Mr. Rogers. Mr. Serrano.
        Mr. Serrano. Thank you.
        Mr. Chairman, by the way, as I was listening to you speak
    on the issue of China, it dawned on me that if we use espionage
    as a basis for not participating in the World Trade
    Organization, we may have to close down the organization,
    because at one time or another, every country, including
    ourselves, has been accused. Not that we have ever done it.
        You know, every day the Chairman and I have a little side
    understanding going here, that he tries not to bring up the
    Census issue, and I try not to bring up Cuba. But just to get
    rid of it, immediately, it is amazing, how we make all these
    wonderful--and you are not guilty of anything other than what
    we all are in this country--presentations on why we deal with
    China, which continues to beg the question, why we do not deal
    with Cuba.
        I guess the simple answer is there is a law against that
    and there is no law against dealing with China. But the more I
    hear why we must deal with China, the more I am reminded of the
    fact that in the neighborhood I grew up in, in every other
    neighborhood the ``big guy'' always had more power than the
    ``little guy.''
        So if China was 4 million people and 50 miles wide, we
    would probably be demanding from them what we have been
    demanding for 40 years from Cuba.
        But that is another issue. It is just that I need to get it
    out every so often, or my staff will think there is something
    wrong with me.

                      u.s. foreign office security issues

        The issue of security. You asked for $225,000 in your
    budget for security.
        Ms. Barshefsky. Yes.
        Mr. Serrano. There is also the issue of last year's Omnibus
    appropriations bill, which included dollars for security.
        One question. Did you get any dollars from that bill for
    security? And secondly, the $225,000 you are asking for, do you
    know what that will require in additional funding in years to
    come, future years, in order to meet your obligations?
        Ms. Barshefsky. We did not receive any funding in the
    Omnibus Bill for security. It is our understanding, basically,
    that those funds are being used to strengthen security at U.S.
    embassies worldwide, but that, unfortunately, does not include
    one of the foreign offices we have, which is in Geneva.
        We have made, however, a number of security improvements
    over the years in both the Geneva office as well as here in
    Washington.
        But with all the various incidents that have been
    happening, we are of course ever vigilant and ever concerned
    about security issues.
        The FY 2000 requests that we have made on security, a
    budget request of I think $225,000, would really include four
    different projects, aimed at reducing threats from terrorism or
    espionage to our facilities and data.
        One is as to Geneva, two additional contract guards for our
    Geneva office. I would be pleased to brief you, separately, on
    the necessity for that, but we do think that is important.
        Second, funds to upgrade the encryption of our computer
    network communications between Washington, D.C. and the Geneva
    offices.
        Third, funds to hire an additional contract guard at our
    annex building which is on F Street, here, in town.
        And last, we would like to purchase certain parking spaces
    which run along the side of the building. The District of
    Columbia Government is pleased to allow us to do that, so that
    vehicles could no longer park, other than Government vehicles,
    could no longer park in an area so approximate to the building,
    and we have requested funding for that purpose as well.
        Mr. Serrano. You would be purchasing the parking space?
        Ms. Barshefsky. Yes; along a portion of the side of the
    building. Yes, sir.
        Mr. Serrano. I imagine that is a very expensive proposition
    in the middle of D.C. Right?
        Ms. Barshefsky. Well, no. I think it is $25,000.
        Mr. Serrano. $25,000?
        Ms. Barshefsky. Yes. Each year.
        Mr. Serrano. Now, is there an ongoing consultation with the
    State Department about the security issue?
        Ms. Barshefsky. Yes, there is, indeed, and if I might
    clarify one thing. Each of the budget requests we have made on
    the security guards, and so on, of course that is funding in
    each year. You do not hire a security guard for one year.
        With respect to working with the State Department, in
    Geneva, we are not located in the State Department's mission
    building. We are located in separate quarters.
        I think we would prefer to move, if we could, for security
    reasons. We have been working with the State Department on
    whether we could move to their mission building in Geneva.
        An architect has done a fairly exhaustive review and has
    concluded there is not the space. We have a very small Geneva
    shop, about 12 or 13 people, but the mission building currently
    does not have the space, and the architect, as I understand it,
    has concluded that renovating or adding on to the space would
    be prohibitively expensive.
        On the other hand, I think a number of us feel that we, for
    security reasons, should attempt to move. We are looking at the
    question of other space. We still have not given up on the
    mission building and I have yet to receive the architect's
    report, which I would like to personally review.
        But we are working with the State Department, and we are,
    as you can imagine, very security conscious.

                             u.s. trade with africa

        Mr. Serrano. Now on another item, you are asking in your
    statement for seven additional positions, two of which are for
    your African unit.
        Ms. Barshefsky. Yes.
        Mr. Serrano. How many people are currently assigned to that
    unit, and how does that compare to staffing for other
    geographical units? Could you briefly describe your current and
    proposed trade activities with Africa.
        What would be the impact on your ability to carry out the
    administration's Africa trade agenda if you do not get these
    two new positions?
        Ms. Barshefsky. Our offices are staffed very slimly. Let me
    give you an example. Our Western Hemisphere office has seven
    permanent professionals, three detailees. Europe, six permanent
    professionals, two detailees. China, three permanent
    professionals, no detailees.
        Africa has three people, one professional and two
    detailees. We have asked for the seven new career positions
    because these shops are almost ridiculously understaffed.
        The people who are in these shops of course are first-rate
    professionals. None of them come in at 9:00 o'clock. None of
    them leave at 5:00 o'clock and none of them work five days a
    week, and they are under tremendous pressure.
        With respect to Africa, of course this is a new shop. It is
    one that I created because the U.S. Trade Representative's
    Office had never had an office dealing with Africa.
        We have offices dealing with every geographic region of the
    world and, somehow, over the course of 30 years, we missed an
    entire continent.
        So I created the office. We have begun a process of
    negotiating trade and investment framework agreements, that is,
    sort of overarching agreements with some of the African
    nations, so that we can have regular consultations on market
    access issues, WTO-related issues, and so on.
        We also have negotiated a bilateral investment treaty, our
    first in sub-Saharan Africa with Mozambique. We would like to
    extend that program to ensure the sanctity of American
    investment abroad in Africa, and, in general, we would like to
    have at least one other person who can work quite directly with
    the African nations on WTO-related matters, both with respect
    to disputes we may have, as well as with respect to revision of
    rules and other issues.
        Mr. Serrano. Well, we have a great interest on this side in
    that whole issue of African trade, so with the Chairman's
    permission, I would hope you will keep the committee informed
    on how that is going and what progress or lack of progress we
    make.
        Ms. Barshefsky. Yes, sir.
        Mr. Serrano. Mr. Chairman, I have no further questions.
        Mr. Rogers. All right.
        Mr. Kolbe will be back in just a minute. Do you have a
    series of quick questions, Mr. Regula?
        Mr. Regula. Well, a couple, but I would like to submit some
    for the record, with your permission.

                      north american free trade agreement

        I have one question. In your statement, speaking of NAFTA,
    you mention that it complements our efforts to protect the
    world environment and promote core labor standards overseas.
        Ms. Barshefsky. Yes.
        Mr. Regula. Now one of the great complaints I get from
    companies impacted by imports due to NAFTA, is that companies
    in Mexico do not meet the same environmental standards and they
    do not meet the same labor standards, which gives them a
    competitive advantage.
        How do you square that with what you say NAFTA is doing?
        Ms. Barshefsky. I think that we have made some good
    progress under the NAFTA with respect to core labor standards
    and with respect to the environment but the situation is by no
    means perfect, and there is a huge amount of room for
    improvement as you well know.
        On the labor side, of course, we have created the means by
    which parties can complain about certain labor practices, and
    we think that that process has worked at least with respect to
    some of the affected sectors.
        On the environment side, we find we have the North American
    Development Bank up and running more fully, and we will see an
    increased funding of environmental clean-up projects,
    particularly along the border.
        Mr. Regula. Thank you. I will put the rest of my questions
    into the record.
        Mr. Rogers. Thank you, Mr. Regula.
        Mr. Kolbe.

                           caribbean basin initiative

        Mr. Kolbe. Thank you very much, Mr. Chairman.
        Ambassador Barshefsky, along with Congressman Phil Crane, I
    have recently introduced legislation dealing with the Caribbean
    Basin Initiative issue to provide both short-term and some
    long-term trade enhancements for the region, and I know that
    the administration has its own version of this, but as far as I
    know, at this time that bill has not been introduced in either
    the House or the Senate, the administration's version. Is that
    correct?
        Ms. Barshefsky. I believe it is correct; is it not? Yes;
    that is correct.
        Mr. Kolbe. Can you tell me, to the extent you know the
    administration's plans, what your specific plans for moving a
    Caribbean bill this year are going to be.
        Do you know if the administration hopes to do it in
    conjunction with the supplemental appropriation bill, or
    separately from that, shortly after? Or what plans do you have?
        Ms. Barshefsky. I think the general thinking has been to
    try and move a CBI bill parallel with or shortly after the
    supplemental, but our understanding has been that the
    leadership would rather not see it on the supplemental itself.
        As you may know, Chairman Roth of the Senate Finance
    Committee has been looking at the prospect of putting together
    a fairly large trade bill which would encompass trade
    negotiating authority, as well as CBI parity, the Africa
    legislation, GSP rollover, an extension of the Trade Adjustment
    Assistance Program, and so on and so forth. We are working with
    the committee and certainly would hope to see the committee
    move forward.
        We also will be appearing before the Ways and Means
    Committee next week in the hopes that a bill can move through
    that process. So we are anxious to move that bill forward, and
    we are anxious, of course, to also move the Africa legislation
    forward, as well as trade negotiating authority and the other
    matters that have been pending for such a long time.

                             fast track legislation

        Mr. Kolbe. I am also cosponsor of the legislation on Africa
    and obviously, when we get around to a fast-track authority
    bill, I would certainly be supportive of that, provided it's
    one that provides for meaningful negotiating authority for the
    President, that doesn't tie it to too many other issues. This
    is a discussion that you and I have had, and others in the
    administration have had, more than once.
        Ms. Barshefsky. Yes, many times.
        Mr. Kolbe. But on the fast track thing, I'm interested to
    hear you say you're looking at ways in which you could move
    that. Because the statements I have heard that have come from,
    I believe, you, and certainly from the administration, have
    been that there's going to be no attempt to do anything unless
    there's a consensus that is developed on labor and environment.
        Do you see any consensus developing?
        Ms. Barshefsky. Well, we say that a consensus needs to
    develop because I don't think a bill will pass without that
    kind of consensus. We have been working particularly with the
    Senate Finance Committee, inasmuch as they seem anxious to try
    and move the bill forward.
        On the question of whether there is yet further common
    ground that could be reached among the various views on labor
    and environmental issues, I don't know if the committee, at the
    end of the day, will be amenable to altering its position from
    the bill that it had put out in 1997. We were very supportive
    of that bill and, you know, we're very supportive of the bill
    that the Ways and Means Committee put out in 1997.
        But we do think, in light of what has happened to the Ways
    and Means bill, first in '97 and then again in '98, that if
    some stronger consensus or middle ground isn't found, the bill,
    or an approach embodied in that bill, as in the Senate bill,
    would fail again.
        Mr. Kolbe. Some of us think a little leadership from
    downtown might help on that.
        What kind of an impact is it going to have on you at
    Seattle without any kind of negotiating authority?
        Ms. Barshefsky. Well, no President has ever had the
    authority to conclude a Round that he has started. Ronald
    Reagan didn't have it for the Uruguay Round----
        Mr. Kolbe. He had to come back.
        Ms. Barshefsky. He had to come back. You know, Carter had
    to come back to finish off the Tokyo Round and so on.
        We would rather have it than not have it going into the
    Seattle Ministerial. I think there's no question about that.
    But we would not be out of line with the historic pattern, if
    you will, if we did not have it going into the ministerial.

                                 wto and china

        Mr. Kolbe. I have one other question on WTO and China. As
    mentioned Premier Zhu Rongji is coming to Washington next
    month.
        What is the likelihood, or can you give us any kind of
    probability that a WTO agreement will come out of that meeting?
        Ms. Barshefsky. I think we don't know. It's----
        Mr. Kolbe. What I'm trying to get at, are you working
    feverishly to try to get it to that point?
        Ms. Barshefsky. Well, we've been working feverishly and
    pushing China feverishly for six years, but most particularly
    for about two-and-a-half. We meet with the Chinese every month,
    rain or shine, usually for one to two weeks at a time, every
    month, without exception, this past two-and-a-half plus years.
    So we have tried to keep the pressure on and tried to move the
    Chinese, and I think we've made some important progress.
        I have done a lot of negotiating with the Chinese over
    these past six years, and in my experience, the hard decisions
    are leadership decisions. Once the leadership makes them, yes
    or no, that's the answer. Negotiations then move very, very
    quickly to conclusion.
        If China decides no, it does not wish to go forward, well,
    it's not going to get into the WTO. If China decides they're
    willing to open up in financial services, they're willing to
    open up in distribution, they're willing to make tariff changes
    and so on, then I think they could move very, very quickly,
    because most of these decisions in China are imposed top-down.
        Mr. Kolbe. I quite agree, and I quite agree with you that
    there has to be a commercially viable offer that they put on
    the table. But given the internal situation, domestic situation
    in China, that doesn't look too likely, does it?
        Ms. Barshefsky. Well, I think there are a couple of
    different things going on. One is that the President has called
    for a new Round. China has said for many years it does not want
    a Round to proceed without it as a member of the WTO, or the
    bar will keep getting higher to their entry and they'll fall
    further behind. I think that lends a little impetus.
        Number two, there's always the question of Taiwan. I think
    China is anxious that Taiwan not enter before it.
        Third, Zhu Rongji has embarked, as you know, on a very
    ambitious reform program in China. But it is somewhat stalled.
    I believe that it may be possible that he, as many other world
    leaders in the past, could look to WTO accession as a means of
    imposing reform on China, getting around his own domestic
    politics, on the basis that this then becomes an international
    obligation of China to move forward.
        So, despite the economic situation in China, which I agree
    is a complicating factor, there may be other reasons that might
    impel the leadership--and we don't know this for sure, of
    course--but that might impel the leadership to move forward to
    make the necessary concessions.
        Mr. Kolbe. Thank you, Mr. Chairman.

                               mission in geneva

        Mr. Rogers. Thank you, Mr. Kolbe.
        On the mission in Geneva, the State Department tells us its
    officials don't have any recollection of a consultation with
    you about moving into their mission.
        Ms. Barshefsky. Oh, yes. We have had many consultations. I
    have not gotten involved in the consultations, but----
        Mr. Rogers. Please identify the person you are talking to?
        Ms. Barshefsky. I'm sorry. This is John Hopkins, our
    Administrator.
        Mr. Hopkins. Mr. Chairman, we have talked to staff in the
    Foreign Building Service, as part of the State Department.
        Mr. Rogers. Who are you talking to, so we can----
        Mr. Hopkins. I'll have to get the name of the person. I
    can't recall off the top of my head.
        Mr. Rogers. Well, you're not making too big an impression,
    I'll say that to you, because they don't even know you're
    talking to them.
        Ms. Barshefsky. Let me also add that Ambassador Rita Hayes,
    who heads our Geneva office, has also been talking with the
    State Department personnel in Geneva. We'll provide you with
    the names of people we have consulted.
        [Clerk's note.--Subsequent to the hearing, the following
    information was provided:]

        Several State Department employees, at different levels of the
    agency, have communicated with USTR employees about the possible move
    of USTR Offices from the Botanic Building to the U.S. Mission building
    in Geneva, Switzerland. As a general matter, these communications have
    been initiated by the State Department and have taken the form of
    telephone calls, cables, discussions at meetings, and memoranda and
    letters.
        Recently, there have been two peak periods of such communication.
    First, in early 1995, when the State Department was downsizing U.S.
    presence in the Botanic Building, it invited USTR to relocate to the
    Mission Building. As part of this effort, State Department officials
    communicated with USTR employees in Geneva and in Washington. In
    Geneva, the State Department's Counselor for Administration at the U.S.
    Mission in Geneva, Ronald Rabens, communicated directly with USTR's
    Deputy Chief of Mission in Geneva, Andrew Stoler. In Washington, D.C.,
    the State Department's Deputy Assistant Secretary for Foreign
    Buildings, Jerry Tolson, called, visited and wrote to USTR's Assistant
    U.S. Trade Representative for Administration, John Hopkins, inviting
    and encouraging USTR to move to the U.S. Mission Building. This
    communication included a letter from the USTR Chief of Staff, Peter
    Scher, to the State Department Under Secretary for Management, Richard
    Moose in March 1995.
        More recently, beginning in 1998 and continuing in 1999, several
    State Department officials have communicated with USTR employees on the
    general topic of physical security, which has included communication on
    the possibility of relocating USTR's Geneva Office from the Botanic
    Building to the State Department Mission Building. Most of this
    communication has involved USTR's Geneva Office staff. A summary
    follows:
    Communications between State Department Officials and USTR Geneva
            Office Employees
        August 20, 1998: The State Department Mission Administration
    Counselor in Geneva, Warrington E. Brown, visited USTR to discuss
    security at the Botanic Building and State's responsibilities,
    including the possibility of relocating USTR to the State Mission
    Building. USTR's Geneva Office Deputy, Ambassador Rita Hayes, attended
    the meeting, together with USTR's Geneva Office Administrative Officer,
    Elizabeth Faulkner.
        August 20, 1998: The Geneva Mission Emergency Action Committee met
    at the State Mission Building to discuss security for both Missions,
    and the possible relocation of USTR to the State Mission Building.
    USTR's Geneva Office Administrative Officer, Elizabeth Faulkner,
    attended, representing USTR.
        November 4, 1998: The State Department Mission Administration
    Counselor, Warrington E. Brown, met with USTR's Geneva office Deputy,
    Rita Hayes, to discuss security and a possible USTR move to the State
    Mission Building.
        February 16, 1999: Three State Department officials met with USTR
    to discuss a redesign of office space at the U.S. Mission Building in
    Geneva in order to accommodate USTR employees and operations within the
    Mission Building. These State Department officials were: Ronald Tomasso
    and Laura Rogers, office space planners from the State Department's
    Office of the Deputy Assistant Secretary for Foreign Buildings
    Operations in Washington, D.C., and Robert Hurlbert, the State
    Department General Services Officer in Geneva. These officials met with
    USTR's Geneva Office Administrative Officer, Elizabeth Faulkner. Ms.
    Faulkner later briefed USTR's Geneva Office Deputy, Ambassador Rita
    Hayes, and USTR's Deputy Chief of Mission, Andrew Stoler, on the
    meeting.
        February 19, 1999: The State Department invited USTR Geneva Office
    employees to a meeting in the U.S. Mission Building to discuss the
    initial report of State's space planners. State Department officials
    attending this meeting included: Ambassador George Moose and Warrington
    Brown. USTR officials attending were Deputy Chief of Mission, Andrew
    Stoler, and Geneva Office Administrative Officer, Elizabeth Faulkner.
    Also attending were Department of Agriculture Minister Counselor, Ken
    Roberts, and representatives of the other Federal agencies. The
    discussion revolved around the extent to which the Mission Building,
    after the review by the State Department space planners, had sufficient
    space to accommodate USTR. The space planners reported that, based on
    their preliminary assessment, the State Mission Building did not have
    sufficient space to house USTR operations.
    Communications between State Department Officials and USTR Washington
            Office Employees
        Two State Department employees, on different occasions in January
    or February 1999, called USTR's Assistant U.S. Trade Representative for
    Administration, John Hopkins, to alert USTR that a team of State
    Department space planners would be traveling to Geneva to examine
    office space at both the U.S. Mission Building and in the USTR-occupied
    space at the Botanic Building. This review would occur during the week
    of February 16, 1999. The purpose of this review was to ascertain
    whether there was adequate space at the U.S. Mission to relocate and
    house USTR employees and operations in the Mission. These two State
    Department employees were: Waide Egener and Ronald Tomasso of the State
    Department's Office of the Deputy Assistant Secretary for Foreign
    Buildings Operations.

                               u.s. trade deficit

        Mr. Rogers. Last year the U.S. recorded the largest trade
    deficit in history, $169 billion. The deficit was the largest
    with Japan at $64 billion, the second largest was China at $56
    billion, a 15 percent increase from previous years.
        Year after year we hear how progress is being made in
    opening the markets of Japan and China to U.S. goods.
    Unfortunately, that progress is obviously not reflected in the
    statistics.
        What evidence is there that the approach that has been
    taken over the past several years, negotiating item by item on
    opening markets in Japan and China, will at any time in the
    near future alter the fundamental imbalance in our trade
    relationship with Japan and China?
        Ms. Barshefsky. Let me first go through some numbers with
    you. As I said earlier, over the last six years our exports
    have increased by 51 percent. To our NAFTA partners, our
    exports are up almost 80 percent, and to Mexico, 95 percent,
    Canada, 73 percent. To the rest of Latin America, 80 percent.
        Our exports to Japan are up 21 percent, and to China, 92
    percent. But that's off of a very small base. To the rest of
    the Pacific Rim, up 37 percent. To Europe, up 39 percent.
        I look at our export performance as one indicator of the
    success of individual trade policy initiatives. Trade policy
    isn't the only reason our exports are going up. Exchange rates,
    other factors, obviously are absolutely critical. But we know
    in areas in which we negotiate sectoral agreements our market
    access improves, and that means more exports for the industries
    in that sector.
        With respect to the overall trade deficit, the trade
    deficits are largely a function of macroeconomic factors. Our
    growth rate is much higher than that of our major trading
    partners, and now, 40 percent of the world is in recession,
    deep recession, buying less and less of our goods.
        Trade policy won't really affect those macroeconomic
    balances much. The numbers are too big and the forces are much
    larger than any individual country sectoral practice. But that
    is why we're extremely pleased with our export performance.
        Now, our export performance in this past year has been
    anemic, and that is because countries in deep recession can't
    afford to buy what we sell. But we are still, even despite
    that, doing remarkably well.
        Mr. Rogers. We have a vote on the floor--two votes, in
    fact. I think we can be back in just a few minutes. So we will
    stand in short recess.
        [Recess.]
        Mr. Rogers. The committee will be in order.
        You yourself have quoted the statistics that, since we
    opened Most Favored Nation status with China in 1980, our
    exports to China have only grown by $9 billion, which is barely
    half of the export growth to Taiwan, and less than a quarter of
    our $39 billion in export growth to the ASEAN countries.
        Ms. Barshefsky. Yes.

                           u.s. exportation to china

        Mr. Rogers. The fact of the matter is that there is not a
    great deal to show for our solicitousness of China, except for
    a growing one billion dollar a week trade deficit. Isn't that
    really the reality of the situation?
        Ms. Barshefsky. I'm not happy with our export performance
    to China. On the other hand, I don't think we've been
    solicitous of China in the trade realm. We have gone to the
    brink of trade war twice with China on intellectual property
    rights and one on textiles.
        I think this is one of the reasons that WTO accession would
    be important; that is to say, broad market opening on the part
    of China is absolutely critical. But I certainly agree with
    you, that our export performance to China is absolutely anemic
    and doesn't rise to the level that it should for a country of
    that size and for an economy of that size.

          world trade organization ministerial in seattle, washington

        Mr. Rogers. From November 30th to December 3rd, the U.S. is
    hosting a World Trade Organization ministerial conference in
    Seattle, following the President's invitation. Give us a
    preview of what you expect to happen during those four days.
        Ms. Barshefsky. Well, this will be the largest trade event
    that has ever been held in the U.S. The U.S. is hosting it and
    I am chairing it. It is the ministerial at which the global
    trade agenda for probably the first decade of the next century
    will be outlined. That is to say, the areas for negotiation,
    the areas for a further work program in matters that may not
    yet be ripe for negotiation, institutional reform of the WTO
    itself, and so on.
        We would anticipate a negotiating agenda in the context of
    a new Round that would be very broad and that could address
    many, many outstanding issues we have from the Uruguay Round--
    for example, in agriculture--as well as potentially newer
    issues, such as newer forms of needed IPR protection.
        Mr. Rogers. As of now, the one appropriation issue that we
    have in regard to that is a $2 million request by the State
    Department, with no request in your budget. Do you expect most
    of the cost to be picked up by Seattle?
        Ms. Barshefsky. Well, we do expect certainly by far the
    bulk of the course to be funded by Seattle, meaning some
    combination of the Seattle host committee, the State
    legislature, the City of Seattle, the Governor's office and so
    on.
        Mr. Rogers. But you're not expecting any other Federal
    funds to be required, are you?
        Ms. Barshefsky. Well, what we're doing now--the State
    Department does have a request for $2 million in its budget for
    this. We think we may face some additional funding requirements
    in FY '99, and we're working with the administration, with the
    State Department and OMB, to define those requirements and to
    establish a plan for getting the resources that we might need.
        Mr. Rogers. What agency would be asked to pick that up?
        Ms. Barshefsky. Well, this is why we're working with OMB.
    We're not yet entirely sure, and we would want to stay in touch
    with the committee on this.
        If I might, let me just highlight a few costs that we may
    expect this year. For example, we need to reserve rooms for the
    U.S. delegation, so a deposit has to be made.
        Mr. Rogers. We can talk about that at another time. Why
    don't you submit that for the record.
        Ms. Barshefsky. Okay, fine. Thank you very much.
        [Clerk's note.--Subsequent to the hearing, the following
    information was provided:]

        As the United States prepares to host the World Trade
    Organization Ministerial to be held in Seattle, Washington from
    November 30-December 3, 1999, USTR will face additional costs
    this fiscal year that are well beyond the limits of its
    appropriation. While most of the expenses will be the
    responsibility of the host city there are costs that are
    relevant to the USG's role in planning and chairing this event.
    We have identified the following FY 1999 costs that will need
    to be funded: (1) logistical preparations in Seattle consisting
    of deposit needed to reserve rooms for the event, the services
    of a professional conference design and logistics contractor,
    and staff logistical preparations including travel to Seattle
    and the WTO in Geneva to negotiate areas like conference
    security, press and finance; (2) international travel necessary
    to participate in worldwide negotiations for framing issues and
    finalizing Ministerial text including ten WTO General Council
    sessions planned between now and July as well as several
    worldwide economic and trade events through September; and (3)
    public awareness and outreach to open a dialogue within
    American communities on the goals and benefits of trade.

                          public accessibility to wto

        Mr. Rogers. Now, the WTO, by its very nature, rouses
    suspicions because you have an international body making
    decisions that directly affect U.S. trade policy. One of the
    issues that affects how the WTO is viewed is how open and
    transparent the proceedings are. I think everyone is in
    agreement that WTO needs to be made more open and accessible,
    and you say so in your statement.
        Exactly what steps is it your position WTO needs to take to
    open up, and under what timetable?
        Ms. Barshefsky. There are a couple of different areas. We
    would like to reach agreement this year, in 1999, on the
    further derestriction of documents. There are too many
    documents that are restricted, in terms of their availability
    to the public, and we believe most could be and should be made
    readily available to the public.
        We would like, even in this year, to get further opening in
    the dispute settlement process. A member of the public can walk
    into any hearing room in the Capitol and sit in the back of the
    room quietly and listen. You can walk into any courtroom in the
    United States, even at the lowest local level, sit in the back
    of the room and listen. This is true mostly around the world--
    not entirely, but mostly.
        You can't do that in WTO dispute settlement. It's all on
    the record; there aren't any ``winks and nods''. Well, why
    can't the public then quietly sit in the back of the room and
    observe? That kind of change would be very important.
        We want to ensure the rights of organizations to file
    amicus briefs. That, we think, is also very important and helps
    to lend confidence to the system. So there are a variety of
    changes we would like to see instituted this year. If we don't
    make it this year, we are going to absolutely continue to push,
    because it's critical that these international institutions,
    whether it's the WTO or other such institutions, be open to
    public scrutiny. It's absolutely critical.
        Mr. Rogers. Ms. Roybal-Allard.
        Ms. Roybal-Allard. Thank you, Mr. Chairman.

                           caribbean basin initiative

        My question has to do with the Caribbean Basin Initiative,
    which is something that the administration has been pushing for
    in the last Congress.
        One of the concerns that I have is that this initiative
    really has a detrimental effect on low-wage garment workers,
    and textile workers in particular. Since 1994, it is my
    understanding that there has been approximately a loss of one-
    quarter million apparel workers, or jobs, in the United States.
        Given the loss of these jobs, and the fact that these jobs
    are primarily jobs that women and minorities have, could you
    help me to understand what the rationale is behind the support
    of this?
        Secondly, have you analyzed the impact of the CBI on the
    domestic garment and textile industry, especially as it impacts
    low-income wage earners.
        Ms. Barshefsky. Well, the administration will be putting
    forward a proposal on CBI to somewhat narrow its scope from
    previous versions of the bill, to take into account the
    concerns that many Members have had, including the concerns you
    have expressed, that the bill could cause additional damage to
    our textile workers.
        The bill envisioned by the administration would require the
    use of U.S. fabric, which would be sent to Caribbean nations,
    formed into garments and sent back to the U.S. Currently, of
    course, the Caribbean can bring in fabric from China or
    anywhere else it might wish, but under the bill, if they wished
    to receive special benefits here, they have to use U.S. fabric.
    We think that will mitigate very substantially any adverse
    impact from the bill.
        It is the way in which generally we have proceeded in
    textiles with Mexico, allowing Mexico to overtake China and
    other nations as a cheap apparel importer to the United States.
    So to the extent we're displacing other foreign sources with at
    a minimum U.S. fabric used in the manufacture of garments that
    are then sold here, we think that we're shifting trade in a
    very positive direction from the point of view of our workers.
        Ms. Roybal-Allard. With this shift in the direction of the
    CBI, are you going to be doing an analysis as to what impact it
    will have with these changes?
        Ms. Barshefsky. Yes. Let me check to see if such an
    analysis has already been done. If not, certainly we can
    request the ITC to do such an analysis.

                                  caip program

        Ms. Roybal-Allard. Also with regards to NAFTA and the NAD
    Bank, under the NAD Bank there was a program, the CAIP program,
    which was intended to help American companies and workers that
    were negatively impacted by NAFTA. As a result of NAFTA, I
    believe there were approximately 125,000 jobs lost here in this
    country.
        One of the things that I am hearing is that many of the
    companies and people that have been negatively impacted are
    extremely frustrated because they're not getting the help and
    assistance that was promised them if they were, in fact, going
    to be negatively impacted as a result of NAFTA.
        I would like to know, first of all, just how many direct
    loans actually have come out of the CAIP program.
        Ms. Barshefsky. The numbers that I have are aggregate
    numbers. Let me give you at least some aggregate numbers, but
    then I will have to go back on the specific program you're
    asking about, which I don't have.
        The numbers that I have relate to NAD Bank's principal
    function, which is to fund especially environmental cleanup
    programs at the border. On that, I am pleased to say that NAD
    Bank has finally gotten off the ground. I think we were slow in
    that and we should not have been slow in that, as you have
    pointed out many times.
        I can give you those numbers. I don't have specific numbers
    on the program you cited, but I am pleased to provide those to
    you.
        Ms. Roybal-Allard. Okay. Given the number of jobs that have
    been lost, my understanding is that the number is still very,
    very low.
        Ms. Barshefsky. Let me look into that, if I might provide
    those to you.
        Ms. Roybal-Allard. Also, one of the issues of the CAIP
    funds has been that the regulations in order to qualify for the
    program are very stringent, so a lot of the companies of the
    people that need the help the most aren't able to get it.
        Has there been any thought of looking at these regulations
    to see if they can be adjusted in such a way that it could
    reach more and more of the companies?
        Ms. Barshefsky. I will also need to look at that. I know,
    generally speaking--and I'm now not talking about this
    particular program--but, with respect to our Trade Adjustment
    program, our Dislocated Worker Assistance programs, which the
    Labor Department runs, there has long been a concern on whether
    the workers are aware these programs are available, a concern
    about the amount of time it takes to get benefits under the
    programs, concern about the question whether the training or
    retraining is required or not required, and if so, how does one
    go about getting it. So, with your permission, I would like to
    provide you a review of that whole situation and the
    administration plan in that regard as well.
        Ms. Roybal-Allard. My understanding is that, to date, CAIP
    has only approved one loan, at least in California, in
    Watsonville.
        Ms. Barshefsky. I will look at that.
        Ms. Roybal-Allard. Thank you, Mr. Chairman.
        Mr. Rogers. Thank you.
        Mr. Serrano.
        Mr. Serrano. One quick question.
        Do you anticipate--I know this is somewhat of a strange
    question--but do you anticipate that the administration will
    not approve entry to the Seattle meeting of any delegates from
    any countries we're not friendly with?
        Ms. Barshefsky. Is this a Cuba question? [Laughter.]
        Mr. Serrano. No, it's an Iraq question. Is Iraq a member?
        Ms. Barshefsky. Let me think about that. Is Iraq a member?
        Mr. Serrano. Then it's a Cuba question.
        Ms. Barshefsky. I suspect Iraq is a member of the WTO. That
    would be my guess. That would be my guess. Certainly Cuba is,
    as you know.
        I can't answer your question, but I would be pleased to
    consult with the State Department and others and respond.
        Mr. Serrano. I suspect that there might be congressional
    and other pressures to keep certain countries out. We tried it
    at the UN, we tried it at the Olympics, we try it on a daily
    basis.
        I would hope that the Administration's position is that, if
    it's truly a World Trade Organization and we're the host
    country, then everybody comes and we abide by their rules.
        My second question is, do you think it would jeopardize the
    WTO holding their meeting here, that perhaps other countries
    would boycott? I mean, we have to look at that whole picture.
        Ms. Barshefsky. I think the whole picture needs to be
    looked at. I can't answer the question on whether it would
    jeopardize the meeting, though I suspect some countries may
    protest.
        Mr. Serrano. Thank you, Mr. Chairman.

                             importation of bananas

        Mr. Rogers. Let me ask you about bananas.
        Ms. Barshefsky. Yes, sir.
        Mr. Rogers. ``Yes, we have no bananas.''
        The European Union is refusing to abide by WTO decisions
    regarding imports of bananas. We have imposed a half billion
    dollar tariff on European goods to rectify that.
        Where do we stand?
        Ms. Barshefsky. We are in the process now of arbitrating
    the precise amount of damage with Europe, which is Europe's
    right, and the arbitrators should rule fairly soon.
        In the meantime, however, we have used a number that we
    came up with, which was about $520 million, and we have what is
    called ``suspended liquidation'' on that amount, with the goods
    that we had previously indicated would be affected. That means
    that importers become contingently liable for a 100 percent
    duty on the value of the goods--in other words, a doubling of
    the price of the goods. The importers currently must post bond
    to cover that potential duty liability.
        Once the arbitrators rule, we will utilize the number that
    they establish as the amount of trade damage, and we will, on
    the basis of that number, then, in fact, begin collecting
    duties. By ``we'', I mean the Customs Service, will begin
    collecting the duties, as opposed to simply the bond
    requirement.
        Mr. Rogers. Is this the first major test of the WTO's
    ability to enforce its mandates?
        Ms. Barshefsky. Well, it's the first time, that we know of,
    that a country has absolutely refused to comply. There are 180
    or so cases pending in the WTO, perhaps 160 cases pending in
    the WTO. We don't know of any other situation, and we have not
    been faced by any other country, with the situation where a
    country won't comply.
        Normally, if a country loses, they either comply outright,
    or they negotiate with the winning party a compliance program.
    When we've lost, we have negotiated out a compliance program
    with the winning party.
        Europe, for 20 months, has refused to negotiate with us. We
    have just belatedly begun talks with Europe. They finally
    acceded to our request to negotiate a compliance plan and a
    solution. But the talks are in their infancy and, indeed, the
    Commission itself does not have a negotiating mandate from the
    member states, which it would need to conclude any kind of
    arrangement.
        So we are proceeding under our rights in the WTO to the
    action that we have currently taken.
        Mr. Rogers. How likely is it that it will be mutually
    resolved, do you think?
        Ms. Barshefsky. I think the odds are long at the present
    time, unless Europe steps up to the plate and agrees they will
    comply, which is what they should be doing.
        Mr. Rogers. Is this the first test of WTO's ability to----
        Ms. Barshefsky. I think it is an unfortunate case, but we
    have been successful in about 21 or 22--we've been successful
    in 19 of 22 cases that we have brought. We have never had a
    compliance problem, not in any of them. So I think the system
    generally works very well, and in quite an advantageous manner
    from our point of view.
        But, if Europe decides in its first loss--this is Europe's
    first loss--that it won't comply, if we don't put our foot
    down, the message we would be sending to other countries is,
    ``Oh, you don't have to comply, either.'' That's unacceptable.
        Mr. Rogers. Thanks for your testimony. I'm sorry we were
    interrupted briefly there.
        Ms. Barshefsky. No problem.
        Mr. Rogers. Good luck to you. If we can be of help, let us
    know. unfortunately, we're short of money this year. Have you
    heard that before?
        Ms. Barshefsky. I've heard it before, but we only need a
    very tiny bit.
        Thank you very much, Mr. Chairman.
        Mr. Rogers. Thank you.
        The committee is adjourned.

                  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                             Wednesday, March 24, 1999.

                              BUREAU OF THE CENSUS

                                    WITNESS

    KENNETH PREWITT, DIRECTOR, BUREAU OF THE CENSUS

                        Chairman Rogers' Opening Remarks

        Mr. Rogers. The committee will be in order.
        We are pleased to welcome Kenneth Prewitt, the Director of
    the Census Bureau. This is the first time Director Prewitt has
    appeared before this Committee, and we welcome you. We hope it
    is a pleasant experience for you.
        The President's budget was submitted on February 2. It
    included a total of $3.07 billion for the Bureau of Census, of
    which $2.8 billion is requested to conduct the decennial census
    in 2000. However, we have been told that this is not the final
    request for the 2000 Census. From what we read in the
    newspapers, the final fiscal year 2000 request could be as much
    as $1 billion to $2 billion higher. We have been pleading with
    the Administration, for almost 3 years now, to give us the
    actual cost of doing an actual enumeration, and we have yet to
    receive it.
        We are put in a real bind here. The 2000 Census is 1 year
    away, and is one of the biggest expenditures of this
    Subcommittee, and obviously, the Census is terribly important
    to the Nation. Yet, there are so many unanswered questions. We
    have not received the Bureau's final plan for the 2000 Census.
    We are still awaiting revised cost estimates for the plan. And,
    we have been asking for this information for 3 years, and we
    have paid millions of dollars to receive it, and you haven't
    delivered yet. It is my hope that this hearing will help to
    answer some of these questions.
        The 2000 Census is a constitutional duty, a duty that we
    take seriously. The failure to carry out a constitutional duty,
    I have to remind everyone, is very serious business, with
    serious consequences. This Subcommittee and the Congress will
    not tolerate the failure of an Executive Branch official to
    carry out his constitutional duty. So I hope this hearing will
    help us move forward in fulfilling our responsibilities.
        Dr. Prewitt, we will insert your written statement into the
    record. In a moment we will welcome your summary of your
    statement, if you would like. We hope you can keep that within
    5 minutes, but we are not going to bind you to that.
        Before doing that, I will recognize Mr. Serrano.

                     Congressman Serrano's Opening Remarks

        Mr. Serrano. Thank you, Mr. Chairman. I want to join you in
    welcoming Kenneth Prewitt, Director of the Census, here this
    morning.
        The census is an essential ingredient of American
    democracy. The Constitution dictated how House seats would be
    divided among the States for the first Congress and required an
    enumeration of the population within 3 years so seats could be
    apportioned fairly. Additional censuses every 10 years would
    report population growth, while building over time and keep the
    apportionment fair. Census data that tells us how many people
    are in the country, and where, are also used to distribute
    Federal funds totaling nearly $200 billion annually. And,
    information collected in the census is a basis for many
    decisions, both public and private, affecting our national
    economy.
        Until not long ago, censuses could be conducted by sending
    enumerators door-to-door to talk to people. However, in the
    last few decades, vast changes in the Nation, a more diverse
    and mobile population, less trust in government, more working
    women, new forms of households, have increased the challenges
    facing the men and women at the Census Bureau.
        We all agree that a complete, accurate and fair count is
    the goal for the 2000 census, but we obviously disagree on how
    to achieve it. I am hopeful, Mr. Chairman, that this morning's
    hearing will cast more light than heat on the complex issues
    facing the Census Bureau. And, I hope that we can put aside
    dispute and begin to work on the budget that will allow the
    Census Bureau to do its job.
        Most of all and lastly, Mr. Chairman, I hope that this
    morning's hearing continues to remind us that the Census Bureau
    is composed of professional men and women who know what they
    are doing. They do it well. They have been caught up in a court
    decision which has made their lives miserable. However, the
    intention is to give us the best and most accurate count they
    can. And in that sense, they are doing their constitutional
    duty. Thank you, Mr. Chairman.
        Mr. Rogers. You may proceed, Dr. Prewitt.

                        Opening statement of Dr. Prewitt

        Mr. Prewitt. Thank you, Mr. Chairman. Thank you for the
    opportunity to appear before your Committee. I will certainly
    keep these opening comments quite brief. I will just give you a
    broad overview of our plans.
        Mr. Rogers. Could you move the microphone closer to you?
        Mr. Prewitt. Sorry. Certainly.
        I will start, if I may, with nondecennial activities. Other
    than for Census 2000, we are requesting only modest adjustments
    for the programs that provide the base data for the Federal
    statistical community and a broad spectrum of public users. I
    do urge as we enter these deliberations on the requirements for
    those programs that they not be sacrificed to meet Census 2000
    requirements. Any erosion of funding for these products of our
    critical economic and demographic data about and for the
    American people will have devastating effects on their
    availability and accuracy. We cannot afford erosion of these
    programs. However, we certainly have prepared our estimates
    cognizant of the fiscal pressures that the census places on the
    Federal budgetary process.
        The Bureau's request will permit continued collection of
    critical information on diverse topics such as the state of the
    economy, income and poverty, health, crime victimization,
    housing, voters, consumer expenditures, travel, child care and
    so forth. For example, fiscal year 2000 is the last year of the
    1997 Economic Census Cycle. By the end of the year we will have
    issued all but a handful of the 1,200 reports generated by the
    Economic Census. Fiscal year 2000 is also the first year of the
    2002 Economic Census and Census of Governments cycle, and we
    will begin planning for those major efforts.
        More than 100 annual, quarterly and monthly surveys provide
    key national economic statistics on a current basis, including
    services, construction, manufacturing, Federal expenditures,
    and general economic statistics. Thanks to the funding from the
    Congress in prior years, the new North American Industry
    Classification System, referred to as NAICS, is now being
    implemented in the Bureau's surveys and censuses.
        Also, in our fiscal year 2000 request is funding to
    continue the American Community Survey to conduct comparative
    nationwide analyses between American communities surveyed at
    the 31 sites we established during this fiscal year. The ACS
    must take place concurrently with the 2000 Census in order to
    compare and analyze the data and assess whether it will allow
    us to eliminate the long form from the 2010 Decennial Census,
    long a goal of this Committee and one of the intended outcomes
    of the survey.
        The American Community Survey is already a success story.
    It gives current, small area data on demographic, socioeconomic
    and household characteristics of the population. Gathering
    these data on a more frequent basis and forming partnerships
    with other Federal agencies and State and local officials help
    decisionmakers plan and evaluate public policies.
        Just one example: The Census Bureau has been invited to
    participate with the Department of Justice in a crime-mapping
    and data-driven management initiative. The community policing
    perspective requires current, small-area data not only on
    crime, but also on factors which create crime risks and how to
    protect against those risks. For example, the data provides
    small-area estimations on clusters of poor housing, school
    dropouts who are not employed, and people who walk to work,
    which tell local officials about crime risk factors so that
    they can intervene before neighborhoods experience serious
    problems.
        To turn very briefly then to the decennial census. It is
    obviously a very critical year for the Census Bureau in that we
    must carry out the decennial census of population and housing.
    While the estimates for the other Bureau programs will not
    change much from what was transmitted in the President's
    budget, and, as I earlier mentioned, reflect only modest
    adjustments over fiscal year 1999 levels to keep pace with the
    rising cost of operations, the estimate for Census 2000 will
    change significantly because of the recent Supreme Court
    decision.
        The Supreme Court announced in their 5-to-4 decision in
    late January that the Census Act does not authorize the Bureau
    to use statistical sampling methods in Census 2000 to produce
    the population count used for apportioning congressional
    representation. While this ruling was disheartening to those
    who have worked long over the last 7 years in an attempt to
    design, plan and conduct a census that is both more accurate
    and less costly than prior censuses, our charge now is to make
    every effort to be as accurate as possible without statistical
    methods for apportionment purposes.
        Consistent with the Supreme Court ruling, we will also
    conduct an Accuracy and Coverage Evaluation we call ACE to
    measure the undercount and produce more accurate numbers for
    every other purpose. It will be very difficult, particularly
    now that we are a mere 372 days from Census Day 2000, and of
    course the debate over the design continues. Obviously, it was
    necessary to make significant changes in our original plan,
    resulting in changes to the budget estimates as presented to
    you.
        Let me summarize quickly where we are, what you can expect.
    We have prepared and released an operational plan for a census
    without sampling for nonresponse follow-up. This operational
    plan outlines significant modifications in five areas: methods
    to improve public response, methods for conducting nonresponse
    followup without sampling, methods to improve coverage in lieu
    of the use of sampling techniques, enhancing quality assurance,
    and additional training for already planned methods and for
    conducting the Accuracy and Coverage Evaluation to evaluate
    census operations and to produce numbers for nonapportionment
    purposes.
        We prepared a new Master Activity Schedule to which we are
    currently adding more detail for a census without sampling for
    nonresponse followup to incorporate changes in the areas I just
    noted. This schedule is the work plan for the daily activities
    of thousands of permanent and temporary census workers and
    draws on the lessons learned from last year's dress rehearsal.
    We are currently working on revised budget estimates together
    with a detailed explanation and justification of the changes
    which will be required. The Census Bureau expects to complete
    this task during the spring.
        While availability of revised estimates on this schedule
    are obviously not ideal for the appropriations process, it is
    the earliest, I believe, that we can produce those estimates
    with the same care and certainty of those developed over the
    past 7 years. Because the change in methodology required by the
    Supreme Court affects both the timing and the magnitude of the
    operations, we expect to require additional funds for fiscal
    year 1999, and we will also alter our previous estimates for
    fiscal year 2001.
        For a number of reasons that I will explain further, the
    task of actually enumerating every American in Census 2000 will
    be substantially more difficult and costly than the 1990
    decennial census, and the results may not be any more accurate.
    There are many factors that contribute to the difficulty of
    enumerating every American and where they live, as well as the
    cost of conducting the highly integrated, complex mobilization
    of people and technology.
        First, there are more people and more housing units. In
    addition, the American people are more mobile than ever, so
    there is simply more work to be done. Rising labor costs and a
    different employee profile account for a large part of the
    estimated cost increase. Taking the census is extraordinarily
    labor-intensive and under the current plan we need to hire
    several hundred thousand more people than projected under the
    original plan. Many of the types of people used to take
    temporary census jobs are employed elsewhere, resulting in the
    need to recruit, hire and train more people than ever before
    for the part-time census employment that they often take as a
    second job.
        In order to be most productive, Census 2000 will need
    temporary workers with a high skill level, both to operate and
    maintain our office automation technology and to have direct
    face-to-face and telephone contact with respondents. Because
    many of them will go to people's homes, and they must all
    protect the privacy of the respondents, our employees must meet
    very stringent standards and background checks. In order for
    the Census Bureau to successfully compete with private industry
    for these skilled people, even only for temporary employment,
    wages must be competitive and that drives costs up.
        In addition to increased workload and labor costs, we must
    invest heavily in order to increase public awareness and in
    order to improve the response rate, and try to improve our
    enumeration of those who are traditionally hard to count. We
    are still finalizing the cost of the census, which does not
    include sampling for nonresponse followup. Because it was
    necessary to complete the detailed Master Activity schedule
    with the operating plan before calculating final cost, a
    detailed budget estimate for Census 2000 is not yet available.
        That concludes my opening statement, and I am prepared to
    answer your questions, sir.
        [The statement of Mr. Prewitt follows:]

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                            Plan For the 2000 Census

        Mr. Rogers. Thank you for your statement.
        Now, let me say at the outset, I know you are new at this
    job, and that you are having to take orders on this from up the
    ladder. And for that, I express some sympathy for you. Having
    said that, let me just say this. I was around here in the
    aftermath of the 1980 Census. I came onto this Subcommittee 15
    years ago, and helped oversee the preparations for the 1990
    census and then the aftermath of the 1990 Census, including the
    court proceeding that determined statistical sampling was not
    appropriate in the 1990 census.
        Then, having become Chairman of this Subcommittee in 1995,
    I began to pressure the Commerce Department to begin to prepare
    to do the 2000 Census in an appropriate way, having realized
    that the 1990 Census was botched because the Commerce
    Department, under another Administration, didn't properly
    prepare for, and didn't properly execute it. We hammered at
    them all the while, gave them all the money they needed, and
    they botched it.
        Now, we see the preparations for this Census, and it is
    going to make the 1990 Census look like a Sunday school picnic.
    In my opinion, based on my experience, this one is being
    botched a thousand degrees more than the 1990 Census
    preparation because today, you can't even tell us how you are
    going to conduct the census in 2000, and here we are one year
    away. We have spent millions of dollars on this. We have had
    them redesign the forms. We have hired firms at our insistence
    to help make the forms you mail out more attractive and easier
    to fill out. We have micromanaged, if you will, to a certain
    degree, hoping that we would get, this time, an actual
    enumeration that was more accurate than before.
        Three years ago, we began to tell the Census Bureau and the
    Commerce Department, look, prepare for an actual enumeration
    just in case the courts rule that that is required. Go ahead
    and do your other things, but as an alternative, be prepared.
    And we gave you the money. Three years ago, we began to require
    in statute that the Census Bureau prepare for an actual
    enumeration. In the final fiscal year 1998 Appropriations Act,
    we required the Bureau to quote, ``plan, test, and become
    prepared to implement a 2000 decennial census without using
    statistical methods,'' end of quote. And we gave you $27
    million to develop the plan, just to develop the plan. And you
    are here to tell us you don't have a plan, is that correct?
        Mr. Prewitt. No, sir. We have a plan.
        Mr. Rogers. What is the plan?
        Mr. Prewitt. Would you like me to respond now?
        Mr. Rogers. Yes.
        Mr. Prewitt. Certainly. Well, the plan is the plan which we
    submitted to Congress in the middle of January, that was before
    the Supreme Court decision, but was the one that we had
    designed to not include sampling. And then we updated that
    several weeks later to try to improve on it, based upon our
    dress rehearsal results which weren't available to us when we
    produced this. And we went from that set of plans to what we
    call our conduct schedule. This is our conduct schedule, which
    identifies every procedure that we intend to carry out in 2000,
    the start date and the finish date of all of those conduct
    procedures which, for us, is a very detailed set of processes.
        Mr. Rogers. But this uses statistical methods, correct?
        Mr. Prewitt. No, sir, not for the----
        Mr. Rogers. Actual enumeration?
        Mr. Prewitt. No, not for the actual enumeration.
        Mr. Rogers. Do you have a plan for the actual enumeration
    without using statistical methods?
        Mr. Prewitt. Yes, sir. This plan is subtitled ``Using
    Traditional Censustaking Methods,'' which was our vocabulary
    for a census which does not use sampling methodologies. This is
    the update of it.
        Mr. Rogers. Well, what I am asking you is, do you have an
    actual enumeration census plan for all purposes, not just for
    reapportionment?
        Mr. Prewitt. Yes, sir. Yes, we do.
        Mr. Rogers. For all purposes?
        Mr. Prewitt. Yes, sir.
        Mr. Rogers. For redistricting, for apportionment of Federal
    dollars and so on?
        Mr. Prewitt. Yes.
        Mr. Rogers. And which plan is it? Which one of those plans
    is it?
        Mr. Prewitt. It is a combination of all. These are all a
    sequence of plans.
        Mr. Rogers. My understanding is that your plan uses
    statistical methods for all but reapportionment. Am I incorrect
    in that?
        Mr. Prewitt. The design of the Census for 2000 is a 12-
    month process, from April 1st, 2000 to March 31, 2001; and in
    that process, we have a number of obligations, one of which, as
    you obviously have indicated, is our constitutional obligation
    to produce apportionment numbers no later than December 31st of
    2000. We are on schedule to do that.
        Mr. Rogers. The question is, does your plan use statistical
    sampling for things other than reapportionment?
        Mr. Prewitt. Yes, sir.
        Mr. Rogers. Then you don't have a plan before us, as we
    directed you to do 3 years ago, and gave you money for that
    conducts a 2000 Census that does not use statistical sampling,
    period?
        Mr. Prewitt. I am sorry, Mr. Chairman. Let me try to--we
    have a plan that produces apportionment data on schedule.
        Mr. Rogers. I am not asking apportionment data, I am
    talking about general data.
        Does your plan conduct a census using actual enumeration
    for all purposes as we directed you to do 3 years ago and paid
    for last year?
        Mr. Prewitt. Yes, it does.
        Mr. Rogers. Well, I don't--you just said you are doing it
    only for reapportionment.
        Mr. Prewitt. No. I was trying to say that there is a
    sequence of things. The first step in that sequence is to
    produce information to the 50 States, to the U.S. Congress, for
    allocating seats across the 50 States. We are on schedule to do
    that. Those data then are available to the country, and they
    will be produced, those data without statistical sampling, will
    be produced for the country at the same level of detail as
    additional data--could I put a poster up that would help?
        Mr. Rogers. Sure.
        Mr. Prewitt. I appreciate this will not be easy to read,
    and you don't have to understand the details of it to read it.
    A version of this I think has been shared with your staff, and
    of course can be made available to the committee members.
        The plan that is--I am sorry, sir. Can I go to this?
        Mr. Rogers. Please. I think we can hear you. Sure.
        Mr. Prewitt. This is a set of activities that produces by
    December 31st the counts that do not use any statistical
    sampling methods. Once these data are produced, they can
    subsequently be used for anything the country wants to use them
    for.
        In addition, we are doing what we call our Accuracy and
    Coverage Evaluation, which starts and continues into 2001,
    which we can use and will recommend to be used for purposes
    other than apportionment. But it is simply incorrect to say
    that the nonsampling data cannot be used for other purposes,
    because they clearly can and will be. We believe they will be
    less accurate than the data that are corrected using the
    statistical methods. But the plan is complete.

                               two-number census

        Mr. Rogers. So what you are planning on is a two-number
    census.
        Mr. Prewitt. Sir, we are planning on a census which we
    believe will be progressively more accurate.
        Mr. Rogers. With two different results?
        Mr. Prewitt. If I may, in 1990, the Census Bureau did the
    best job it could and presented to the country, as it should
    have, a number based upon its enumeration strategy. It then
    conducted an evaluation that revealed, rather persuasively,
    that we had missed some people. We then used that evaluation to
    correct for those numbers, and the use of those numbers was
    left to different agencies.
        If I may cite a letter from the Commissioner of the Bureau
    of Labor Statistics, the BLS: Starting in 1992, the BLS
    incorporated the undercount for all of their estimates of the
    working-age population. Had they not done that, their estimates
    would have been over 2 million persons short. Those estimates
    have been used for the last 8 years for all unemployment
    statistics that come out of the Bureau of Labor Statistics.
    Otherwise, the overall level of employment and unemployment
    would have been too low and the geographic and demographic
    distribution of unemployment and other measures shown in our
    data would have been inaccurate.
        May I ask, sir, if this could be put in the record?
        Mr. Rogers. Sure.
        [The information follows:]

                  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Prewitt. The point is that you could call that two
    numbers. The Bureau of Labor Statistics preferred to call it
    the more accurate number. So they took one number, they then
    used a correction factor that gave them a more accurate number.
    So whatever vocabulary we wish to use in this instance, for 8
    years this country has designed its economic policies based
    upon data that were corrected and incorporated into all BLS
    economic statistical series. So every time that Mr. Greenspan
    or anyone else comes before the Congress and explains what is
    going on in the economy, they are basing that judgment and
    their analysis on what I think you would call a second number.
    It is a more accurate number.
        Mr. Rogers. Well, I dispute that. Now, in 1990, as you
    know, the Census Bureau proposed to adjust the number.
    Secretary Mosbacher, then the Secretary of Commerce, rejected
    that, saying it was not accurate. It took almost 3 years after
    the 1990 Census for the Census Bureau to discover that the
    statistically adjusted numbers were wrong. They overestimated
    the undercount by a half a percent. Is that not correct?
        Mr. Prewitt. It is correct, sir, that there was certainly a
    serious error made, that it was found, and we are glad it was
    found. However, the number that then became available to the
    country was still more accurate, by far more accurate than the
    initial count. That is why the Bureau of Labor Statistics has
    driven all of its economic data for the last 8 years from that
    new number, because they think it is more accurate.
        Mr. Rogers. Well, I can't argue that, because the 1990
    actual count was a horrendous count by everyone's account. It
    is because it was not run properly, and some of us knew at the
    time that the Director of the Bureau at that time didn't know
    how to do it, and there was not an accurate count.
        That is the reason since that time, this Subcommittee,
    Republicans and Democrats on this Subcommittee, has been
    pushing to beef up the actual count procedures to give monies
    in preparations for a better mailing list, for more appealing
    census forms, for a better followup, and all of the other
    things that go into making an actual count more accurate. We
    have invested hundreds of millions of dollars in doing just
    that.
        And here, now you are saying, well, we are not going to
    worry about that, we are going to guess. We are going to have a
    virtual count, if you will. And in my congressional district,
    we are going to estimate based on not even a State sample, but
    a regional sample now of several States, we are going to
    extrapolate from that, that in my district there are so many
    people that no one knows about, but we are going to figure they
    are there.
        Well, I am here to tell you that my district doesn't
    reflect that five- or six-State region. It just doesn't reflect
    it. His district doesn't reflect his region. His doesn't
    reflect his region. We are all so different, and you can't run
    us through the same-size-fits-all process. And that is what you
    are attempting to do, which was rejected by the Secretary of
    Commerce 8 years ago.
        Now, the court said that for reapportionment, you must
    provide an actual enumeration. They said if you want to do
    sampling, you can only do it if it is feasible, and some of us
    are saying it is not feasible. It is the feasibility of your
    plan that I think is at question here.
        How does your plan differ from what was attempted to be
    done to the 1990 Census and statistical estimation?
        Mr. Prewitt. Mr. Chairman, if I could start, your question
    started with respect to the master address file, the improved
    forms, the publication and advertising program and so forth.
    The Census Bureau really does appreciate the support of the
    Congress in trying to make the address file a more accurate and
    better tool, and we indeed have spent, as you referenced, well
    over $100 million doing that. We are still doing it. We know
    that the census is two things. It is finding 270 million
    people, but it is attaching them to 120 million addresses. You
    see, the addresses are as important to us as the people,
    because the Constitution obligates us not just to count, but to
    locate and fix where the people are.
        So the Congress' support in helping us improve the master
    address file is an extremely critical part of Census 2000, and
    we have been doing that work, and we have been fixing the form
    as the Congress had hoped. It is more user friendly. We have
    pretested it. All of the things that you identified are part of
    this plan, and I appreciate that we can't spend as long as it
    would take to go through them, but we can go through every one
    of those and show you the state of our planning, if you would
    like. So I would urge that we believe that the Census Bureau
    has been fully responsive to the congressional instructions to
    improve these parts of the procedure.
        We believe that the plan that is available is a superior
    plan, that is, the enumeration plan is a superior plan to the
    plan that was used in 1990. It is good that it is a superior
    plan, because it is going to be harder to count the American
    public in 2000 than it was in 1990. So the things that you
    identified have all been done, and they are embedded in these
    documents and there as part of that schedule, and we can talk
    about them in detail.
        Secondly, you asked about the difficulties of estimating
    population characteristics from one area to the other. I can
    just simply say that if we did not know how to do that, this
    country would not have health statistics, would not have
    education statistics, would not have labor statistics. Every
    statistical activity that the country carries out includes
    aggregating responses across different jurisdictional lines.
    There is simply no other way to do it to give this country good
    data for those purposes.
        So it is not something new to create statistical programs
    that are aggregated across a lot of different jurisdictions.
    That is what we do in the current population survey, which
    drives all of the unemployment numbers.
        Mr. Rogers. Well, it is new. I think you will admit this is
    the first time we will have ever, if you are successful,
    conducted a census using sampling.
        Mr. Prewitt. We started using sampling in 1940.
        Mr. Rogers. Statistical sampling?
        Mr. Prewitt. Statistical sampling.
        Mr. Rogers. Have you ever used statistical sampling for an
    actual enumeration in a decennial census for purposes of
    reapportionment, redistricting, whatever?
        Mr. Prewitt. Well, ``whatever'' includes a lot of things,
    but not reapportioning and not redistricting.
        Mr. Rogers. That is correct. So this is a new thing you are
    trying out.
        Mr. Prewitt. That part of it is new.
        Mr. Rogers. It is new.
        Mr. Prewitt. We are not trying to do it for
    reapportionment, because that is what the court ruled on.

                     status of preparations for 2000 census

        Mr. Rogers. Now, you have shown us a pamphlet here of your
    plan. I am told that that is only a sketch, that we do not yet
    have the Master Activity Schedule completed, the complete
    Master Activity Schedule; is that correct?
        Mr. Prewitt. This document is what is called a conduct.
    This is the most critical document in the planning of a census.
    It identifies every----
        Mr. Rogers. That is a summary. We are looking for the
    details.
        Mr. Prewitt. Sir, I don't have the details today.
        Mr. Rogers. Do they exist?
        Mr. Prewitt. Well, in large measure.
        Mr. Rogers. The question is, do you have a complete Master
    Activity Schedule? Not a summary, not a scheme, not a plan, not
    an idea, not a concept. Do you have an actual Master Activity
    Schedule that we can look at?
        Mr. Prewitt. No, sir.
        Mr. Rogers. Why not?
        Mr. Prewitt. It is not complete.
        Mr. Rogers. Not complete. We have paid for it. We have
    directed you 3 years to develop it. We paid you $27 million
    last year to do it in 1998.
        Mr. Prewitt. I do not have the legislation in my head and I
    apologize for that, but I believe that what the Congress
    expected us to do, and I believe what we have done, is have a
    plan that puts us on schedule to conduct the census on April
    1st, 2000. We are on that schedule. That matters. The
    particular date on which a master activity schedule is finished
    strikes me as not what is the core. What is core is can we do
    this census on schedule according to the instructions of the
    U.S. Congress? We are on that schedule.
        Mr. Rogers. Well, tell me the cost.
        Mr. Prewitt. As I just said in my opening comments, I don't
    have that cost today.
        Mr. Rogers. Why not?
        Mr. Prewitt. It is not complete.
        Mr. Rogers. When are you going to tell us? Here we are on
    the eve of writing an appropriations bill for this
    Subcommittee, which funds the Supreme Court, all the Federal
    courts, the U.S. Marshals, the security of courthouses, the
    operations of the State Department in 184 locations around the
    world, antiterrorist activities, the operations of the FBI, the
    DEA and the drug war, the Foreign Commercial Service in the
    Department of Commerce, the National Weather Service, and on
    and on and on. All of those operations of the government are
    waiting. We can't do anything to fund those agencies after June
    15th because the Census Bureau will not tell us how much money
    they have to have to do what we have directed them for 10 years
    to do and the Constitution mandates.
        Here we are sitting and waiting, and I have pleaded with
    everybody from the President down--give us the dollar figure.
    Give us the plan so we can judge whether it is feasible and try
    to find the money for it. Does it bother you that the Supreme
    Court is sitting over there waiting for their pay and the
    lights will go out on June the 15th in the Supreme Court? Does
    that bother you that these things are hanging in the balance?
        Mr. Prewitt. Mr. Chairman, it bothers me a lot.
        Mr. Rogers. Does the fact that the Congress directed you in
    the 1998 Appropriations-Act to develop the plan and the cost
    and get it to us forthwith? Does that bother you that you
    haven't done that?
        Mr. Prewitt. Well, if I could go to the first question
    first, is that all right, and then I will come to the second
    question.
        Mr. Rogers. Sure.
        Mr. Prewitt. With respect to the bind that we have put this
    Committee in, of course it bothers me, and I wish it weren't
    the case. I wish it weren't the case for us, not just for the
    burdens that it places on this Committee. What I am worried
    about is presenting to you a number which is not rock solid.
        That is, I think I put you in a different bind if we come
    before you today and say we haven't finished all of our
    detailed work to give you the very, most secure estimate that
    we can, so that when we do give you that estimate, it is not
    going to go up or down; it is ``it,'' minus natural disasters
    and so forth.
        It just seems to me a responsible thing for an agency head
    not to produce a number for the U.S. Congress which is not as
    firm and tight and solid as it can be. So I appreciate that we
    have put you in a bind and made your task difficult.
        I would say that the Census Bureau's task has not been
    easy. We started with an instruction from President Bush to
    design a census which would be more accurate and less costly
    than 1990. We tried to implement that instruction over a 5- to
    6-year period. We then hit a period, as you say, in 1998 when
    we got another instruction. We tried to accommodate that
    instruction. Then, in early this year, we got a partial
    resolution of some serious uncertainties. We have tried to
    accommodate that.
        The good news, which I appreciate doesn't make your task
    easier, but in the long run the good news is that the Census
    Bureau is on a schedule to give you a quality piece of work on
    April 1, 2000.
        Mr. Rogers. Do you know why we are where we are today? We
    are in this bind--we are in this bind because the Bureau did
    not develop a real plan for actual enumeration for all
    purposes, as they were directed and paid to do, because you
    kept hoping the court would rule in your favor on sampling. And
    you didn't even start developing the Master Activity Schedule
    until the week after the Supreme Court ruled that you could not
    do it. That is why we are here. And you don't have the Master
    Activity Schedule that we can look at with you and determine if
    it is a feasible plan, if it is worth paying for. We are
    spending our taxpayers' dollars to get a service and our job is
    to see that we are getting the proper service. And you can't
    tell us what it is going to cost. We are here because the
    Bureau simply refused, after repeated pleadings and threats and
    everything else for several years, to develop a plan for actual
    enumeration for all purposes. And from the very beginning, when
    you were first talking about doing both an actual count and
    statistical adjustment on time, it was questionable even then.
    Even a year ago, your own Census Bureau managers admitted that
    it was the single biggest risk in the 2000 Census is to try to
    do both on time. And that was when you only planned to count 90
    percent of the people. Now that you are talking about that law,
    you have to count 100 percent in the actual enumeration phase,
    and that is exactly what the court has told you to do.
        I am again absolutely frustrated. You don't have, you can't
    deliver to us a Master Activity Schedule, and you can't tell us
    what it is going to cost; and here we are trying to write a
    spending bill. Do you people understand how the government
    operates, that we have to find the money and pay for it, but we
    can't do it until you tell us what it is going to cost?
        You are the Executive Branch, we are the people that try to
    find the money. This is the Appropriations Committee. We try to
    fund the agencies that are under our jurisdiction, and this is
    the only one, the only agency out of hundreds that we deal
    with, that just simply refuses to present a plan or to ask for
    money or tell us what kind of money they are going to need. I
    am absolutely puzzled. Maybe there is something going on that I
    am not catching. Can you help me with that?
        Mr. Prewitt. Chairman Rogers, I arrived about 5 months ago.
        Mr. Rogers. You are I think the third one in the last--how
    long? In 4 years, I think you are the third census director in
    this Administration. They burn them out pretty quick.
        Mr. Prewitt. I arrived 5 months ago, and was presented with
    the following situation: that the Census Bureau was expected,
    by congressional instruction, to have in place the capacity to
    mount either of two different designs. What I said publicly,
    not before this Committee--this is the first hearing--but what
    I said publicly was that it was my best judgment that there was
    going to come a point where you could not sustain two-track
    planning. By definition, there is a point where you can't do
    two-track planning. And when we hit that point--I said this in
    my confirmation hearing to Senator Thompson and his committee--
    when you hit that point, you can no longer sustain it.
        In the meantime, we were continuing to go on both tracks.
    This is the result of one of those tracks, and it is a plan,
    and it is a plan that we can implement on April 1st, 2000.
        The Supreme Court ruled before we hit that wall beyond
    which we could not stay on two tracks, but I can tell you that
    if that decision had been delayed, I would have been back
    before the U.S. Congress saying, the Census Bureau cannot be
    there anymore if you want a census in 2000. We actually are
    able to give you that census. We are able to give you a census
    with all of those things which you hoped that we would include:
    the better coverage improvement, the better outreach, the
    better address file, the better enumeration strategies. All of
    those things we are able to give you in that census.
        And if this entire conversation is about the level of
    detail which I can specify today, then I just have to suggest
    that is not what my mind is on. My mind is on can we give you
    that census according to our constitutional obligation.
        Now, I have said, and I will repeat, that I know that we
    put you in an awful bind not to have the budget numbers today.
    I do not think we put you in an awful bind not to have a Master
    Activity Schedule, but I do think we put you in an awful bind
    not to have budget numbers. I wish we had them. I wish we were
    complete.
        The good news is we are going to complete that on a
    schedule which allows us to give this country a serious,
    quality piece of work.

                              cost of 2000 census

        Mr. Rogers. Well, when will we know what it is going to
    cost?
        Mr. Prewitt. As soon as we can present it to you.
        Mr. Rogers. Well, why don't you have it? Why don't you have
    the cost estimates? You know what you are going to do. You know
    the manpower it is going to require. You are not finished with
    a Master Activity Schedule, but you can give a fairly accurate
    estimate. Why can't we have a figure?
        Mr. Prewitt. Because we want that figure to be as solid as
    we can make it.
        Mr. Rogers. Well, who is doing that? Who is putting
    together the cost figure?
        Mr. Prewitt. If I could take just a minute or two to
    describe how we do that. We have within the Census Bureau
    something in this process that we call the lock-up room.
        Mr. Rogers. The what?
        Mr. Prewitt. The lock-up room. It is a windowless room in
    the basement of a temporary building that was assembled for a
    VA hospital in the 1940s, out in Suitland. This windowless room
    has about 50 people in it. Those 50 people come from every part
    of the Census Bureau. There is somebody there from
    administration, there is someone there from the field division,
    there is someone there from contracts, there is someone there
    from all of the parts of the Census Bureau that have to go into
    a decennial.
        What is happening in that room is that there is a big
    screen, and on that screen is this type of document, with its
    level of detail. And some line of activity gets put up on that
    screen with computer technology, and the line of activity says
    that we have to do something, some procedure; let us say, move
    175 million forms in 5 days. And someone says, I know how we
    can save a half of a day. Good. How can we save that half of a
    day? We can save that half of a day if instead of having 15,000
    laptop computers, we have 20,000.
        Mr. Rogers. Look, I don't want to cut you short. I am glad
    you have a--what is the room called?
        Mr. Prewitt. A lock-up room, sir.
        Mr. Rogers. I am glad you have that. All I want is the
    figure. I don't care how you come up with it, so long as it is
    accurate. I don't even want to hear about that. I want the
    figure. We are ready to add the totals of what it is going to
    cost to run the Supreme Court and the Federal courts, the
    Commerce Department, the Justice Department and so on, the
    Attorney General's staff, all of these things. We have their
    totals. We know what they are asking. The only blank space we
    have on the page is what is it going to cost to do the Census.
    I have been begging for this for 3 years, to three different
    directors we have said, please tell us your plan and the cost.
    And the time is up. The time is up. Give us your number. Tell
    me your number. I want your number. What is it going to cost?
    The people demand it. I want to know it. What is it going to
    cost?
        Mr. Prewitt. Chairman Rogers, one of the things that you
    also requested, I believe, that is, the Congress requested,
    were some dress rehearsals.
        Mr. Rogers. What is the cost?
        Mr. Prewitt. The dress rehearsal----
        Mr. Rogers. Please tell me the cost.
        Mr. Prewitt. As the dress rehearsals explain, it is
    incorporated in our estimates.
        Mr. Rogers. Tell me your cost.
        Mr. Prewitt. Chairman Rogers----
        Mr. Rogers. You are welcome here. But I will not tolerate a
    refusal of a demand from the Congress to tell us what it is
    going to cost to conduct our census, now.
        Mr. Prewitt. Chairman Rogers, you said that you wanted an
    accurate number.
        Mr. Rogers. I want a number. I want an accurate number. You
    have been on the job 5 months, we have demanded this for 3
    years, we paid for it a year ago. What is the cost?
        Mr. Prewitt. Chairman Rogers, the accurate number is not
    ready.
        Mr. Rogers. I am absolutely flabbergasted. I have never
    seen incompetence in government equivalent to this. I am using
    incompetence as a nice term. The reason we are where we are is
    because we don't trust the Administration. That is sad. That is
    a sad commentary. It is shameful, because we have been misled
    too many times in other arenas, and then they came up with this
    idea--you didn't come up with it, it was in place before you
    got there--of using the sampling methods.
        There are some wonderful people in the Census Bureau. I am
    not impugning the integrity of anyone, I don't intend to. I do
    not trust the operatives in the White House, and the way they
    are manipulating you is shameful. It is sad. I am embarrassed.
    It puts you, a professional person, in a spot that two of your
    predecessors have chosen to get up and leave, and I don't blame
    them. I am absolutely chagrined. I know how you feel. I
    sympathize with you, as I said at the outset. And I know you
    can't answer, because you are being told not to answer.
        The Secretary of Commerce is in the same boat. He said,
    basically, he couldn't answer because it wasn't his decision.
    It is being made farther up the ladder, in the White House. So
    if the Secretary of Commerce can't answer these questions,
    certainly I understand that you can't. But it is a sad, sad
    commentary on our Nation.
        Mr. Serrano.
        Mr. Serrano. Thank you, Mr. Chairman.
        Mr. Chairman and my colleagues, I have been on this
    committee barely 2 months. I think. And, in that time, I had
    the good fortune of joining the committee for the first time,
    the subcommittee, and coming in as its Ranking Member. And,
    amongst the things I want to establish here, which I keep
    repeating at every hearing and repeat them privately to the
    Chairman, is to continue establishing the relationship I have
    established with the Chairman, one of respect and admiration
    for the fact that he has been here 15 years on this
    Subcommittee. The Chairman, however, is fair enough to know
    that there will be a couple of issues we disagree on, and at
    the top of that issue will be this one.
        I understand, Mr. Chairman, your role. Your role as an
    appropriator and Chairman of the Subcommittee is to make sure
    that we have the numbers and get the bill out. What I think
    that you did not tell us this morning is that this stopped
    being an appropriations issue a long time ago. The census issue
    became a political issue during the last census.

                                undercount issue

        You and I didn't do it; it was done by the former
    leadership of the Majority party in this House, the current
    Majority party. When the Census Bureau came back in 1990 and
    told us, whoops, we made a mistake. We did not count some
    people and we want to make adjustments to make sure that those
    people are counted, the issue did not become the undercount.
    The issue became the political question of who was undercounted
    and what that would implicate for political purposes and other
    purposes in this country. We can say whatever we want to these
    days, but that is a fact.
        The fact is that if certain people in this country had not
    been counted, this would not have become an issue. You are
    hearing that from the district that was most undercounted in
    the Nation. At this very moment there is a press conference
    going on, being held by Delegate Norton, where she is bringing
    people who look very much like the people who were not counted
    in the last census, and her slogan for this morning is, ``Once
    you see the faces of those who were not counted, you will
    understand why it is not important for some people to count
    them.''
        So I believe that it wasn't important to some leaders who
    are no longer around, thank God, to count those people. And
    there began this bashing of the Census Bureau in an attempt not
    to get those people counted.

                     EXPIRATION OF THE APPROPRIATIONS BILL

        Now, we have deadlines. And we have problems. We are the
    only subcommittee with a bill that expires June 15th. The
    Chairman didn't do that, I didn't do that. The fact of life is,
    you want to blame some Democrats. You can blame the White House
    for that one. They made an agreement with the Republicans in
    the House to give us a deadline of June 15th.
        Now we have two problems. We have to put together a bill,
    ongoing bill, and we have to deal with June 15th. Why? Because
    all of a sudden, the census has become the most political of
    items that we deal with. The thought that in counting some
    people, you may get an additional congressional seat somewhere
    represented by someone who may look like me or someone else in
    my district, has created havoc in some of the constituencies
    that influence this Congress.

                                CENSUS PROBLEMS

        So, we have to be honest in saying why we are here today.
    We are not here just because of the numbers. That is the
    Chairman's problem and my problem, the numbers. We are here
    because of the larger issue. The fact that the census wants--
    some people want to cripple the count so that the count is not
    what it should be. Well, some of us are going to continue to
    yell and scream about the fact that the count should be right.
    The court spoke. It didn't say what I wanted it to say, but it
    said something of what I wanted it to say. Did it create a
    problem? Maybe that is what the court did. The courts said, we
    can use both methods. So, you present to us a plan with both
    methods. I think that is fine to me. I don't have a problem
    with that as long as it gets to the count.
        Now, we allocate dollars every year. We appropriate dollars
    every year, but the fact of life is that one of the few
    programs, if perhaps the only one that comes before us that is
    really talking about a 10-year process rather than just a year-
    to-year process is the census. The census is not a 1-year
    program. And, even though we may fund parts of it every year,
    we are looking at a 10-year program. So for me to tell you that
    I need the number today, well, that is okay, but I would rather
    the number you give me is the last number you give me. I don't
    want you to give me a number today and then come a month from
    now and tell me you need another number. That doesn't solve my
    problem. I would rather wait to get the correct number.
        Now, we are told, and I think the Chairman used the word,
    that the sampling is not feasible. I think sampling is feasible
    for any count, be it the apportionment count for the regular,
    ongoing count. And, I don't have a problem with sampling. But,
    sampling became the political issue.
        Now, this is the part that really gets me, though. On one
    hand, you have folks saying I need to get this done now, and I
    join that chorus. We need to get it done now. But on the other
    hand, there is another subcommittee that has come forth with
    bills, some of which I am crazy about. In fact, there is a bill
    here that says the printing of 2000 Census questionnaires in at
    least 34 languages and braille. That sounds like something I
    would have written up. I love it. Thirty-four languages. But, I
    know what it is going to do to the count and maybe it wasn't
    put forth to make me happy. Maybe it was put forth to create a
    problem. I don't know.
        But, the fact of life is that while this subcommittee is
    saying get it done now, there is another committee saying send
    a second mailing out, do something about the local review.
    Print census forms in 34 languages and braille. You are not
    ready to do that yet, yet we want you, by tomorrow morning, to
    be ready to have this done.
        You are a professional, so I am not going to tell you, Mr.
    Prewitt, that I feel sorry for you. Right?
        Mr. Prewitt. Right.
        Mr. Rogers. When are you going to ask a question?

                             LEGISLATIVE PROPOSALS

        Mr. Serrano. I am going to take whatever time you give me,
    Mr. Chairman. And, if you give me half of the time you took, I
    will be able to ask him a question. But, that is up to you, in
    the Hershey spirit.
        My question to you, sir, to make the Chairman happy, is
    even though you are a professional and I feel sorry for you. I
    realize that you are in a situation that no one should ever be
    put in. You can't answer some of these questions because, there
    is no answer. There are no answers for some of those questions
    right now.
        But, let me ask you this one. Some of these bills that are
    floating around from another subcommittee, what problems, if
    any, do they present to you in putting forth what you have to
    do in doing the job you have to do?
        Mr. Prewitt. Mr. Serrano, some of those bills, would they
    become law, present such serious, serious operational
    consequences for the Census 2000 plan, this plan, in ways I
    could describe in detail, that I have recommended to the
    Secretary of Commerce that he in turn recommend to the
    President that these are so serious in terms of what they could
    do to the census at this stage that the President should
    consider vetoing. I cannot make a stronger statement than that.
        Mr. Serrano. And, Secretary of Commerce Daley has also
    suggested that they be vetoed?
        Mr. Prewitt. I believe that he wrote that letter to the
    Congress itself; yes, sir.

                          CENSUS UNDERCOUNT/OVERCOUNT

        Mr. Serrano. Now, what was the undercount the last time in
    numbers?
        Mr. Prewitt. Well, the undercount, we missed approximately
    8 million people, but we double-counted about 4 million people,
    so the net undercount is about 4 million.
        Mr. Serrano. Now, we know about the undercount. How did the
    double-count take place? The Members of Congress count in D.C.
    and in their home district?
        Mr. Prewitt. In principle, that is the sort of thing that
    does lead to a double-count. We do have a very special
    procedure for the Members of Congress to try to make sure that
    that does not happen, but there are people, of course, with two
    residences, and they perhaps forget that their spouse filled
    out a form, or they do not ask and the spouse filled it out in
    one residence, and then they are in the weekend home and
    another form comes in, and they send it in a second time; or
    they may have children in college, and they feel like the kid
    is home all the time, and so they say well, he seems to be here
    all the time, I guess I better put him down. In the meantime,
    the child has been counted in his college dormitory.
        So there are a number of issues which create the double-
    counting. They are disproportionately in those population
    groups which have multiple homes, which have children away at
    colleges and so forth. So we end up with what we call the
    double-count, the overcount.

                      ELIMINATION OF THE LONG FORM BY 2010

        Mr. Serrano. Now, looking ahead, Mr. Prewitt, I understand
    that your Bureau is in the process of trying to eliminate a
    long form by. When is it, 2010?
        Mr. Prewitt. That is correct.
        Mr. Serrano. So it will be for the next census. There is no
    problem with bringing that up now. By the way, this is in the
    form of a question, Mr. Chairman, so that no one gets upset on
    my right.
        How are we doing with that? Will that take place?

                           AMERICAN COMMUNITY SURVEY

        Mr. Prewitt. You are making reference here, I believe, to
    the American Community Survey, which is responsive I believe to
    preferences that this committee itself introduced some years
    ago about the long form as a possible confounding effect in the
    core census. So we have designed something that we call the
    American Community Survey. We have begun to do it. The research
    phase was in 1998 and 1999. That is very much on schedule. We
    are very pleased with the early results, and in our 2000 budget
    when we do present it, it will incorporate procedures that
    allow us to compare the results from the American Community
    Survey design, which is the same data as are currently in the
    long form, with the long form as it will be collected in Census
    2000. It is very important to us to be able to calibrate
    collecting those information one way versus the other way.
        If, as we fully expect, we will be successful in that
    calibration, we will learn what we need to learn about the
    long-form data which are all the demographic data, the poverty
    data, the language data, the employment data, the time-to-work
    data, the travel data and so forth, all of those data which are
    used in the Federal formula spending, then we will be back
    before this committee or the U.S. Congress with a
    recommendation that we feel the American Community Survey,
    starting in 2003, post all of our testing period, and it is, we
    believe, the most innovative thing that is going on right now
    in the American statistical system; that the long form will, by
    the year 2010, have been replaced--the survey data will have
    replaced the need to collect the long form. This means that in
    2010, the only constitutional obligation that we will be
    dealing with is the obligation to count, and we hope we can get
    to either a postcard count or we make more use of
    administrative records. We will have a very simple counting
    procedure, because we are not trying to collect all the other
    data that we are now collecting on the long form.
        The American Community Survey is on schedule, it is
    performing the way we had hoped it would perform, and we look
    forward to reporting on it in detail to this committee and
    other committees.
        Mr. Serrano. Mr. Chairman, before I give up my time, let me
    just say, Mr. Prewitt, I want you to give us numbers. I want
    you to give us numbers once and not have to come back again. I
    want you to give us the numbers when you are ready to do the
    job that we want you to do and which the Constitution mandates
    all of us to do. I want you, sir, to understand that on this
    side of the aisle, we understand well that your department is
    caught up in the most difficult political fight. And, we will
    try to alleviate you of that political fight. But, we can't
    guarantee that, because this is a political fight at this time
    and it will go on for a while. In the meantime, we will try to
    do whatever we can on this side to make sure that you get a
    chance to do the job that you are supposed to do. We know you
    have the professional people to do that job and that you will
    do it right.
        Thank you, Mr. Chairman.
        Mr. Rogers. Thank you.
        We are privileged on the subcommittee to have been joined
    this term by a person who has a degree in statistics, who
    happens to be the Chairman of the Census Committee, authorizing
    committee, review committee, Mr. Miller.
        Mr. Miller. Thank you, Mr. Chairman.
        Dr. Prewitt, good morning.
        Just an initial comment to Mr. Serrano. I want to be sure
    we emphasize that we all share the common goal that we have
    everyone counted, and everyone counts. This subcommittee, prior
    to my joining the subcommittee, has given approximately $200
    million more than even requested by the President to conduct
    the decennial census. So this subcommittee has provided the
    resources and support to do everything we can to minimize and
    eliminate--the goal should be to eliminate the differential
    undercount.

                           POLITICS AND CENSUS POLICY

        But let me continue a little bit along the line of
    questioning from Chairman Rogers and Mr. Serrano about
    politics. Because sadly, politics is driving policy decisions
    at the Bureau, and it is seriously affecting the credibility of
    the Bureau, and that is a very sad legacy that this
    administration is going to leave, because there is a proud
    history to the Census Bureau, and how politics now is driving
    in many cases bad policy decisions and the credibility of the
    Bureau is being affected because they are having to defend some
    of these policy decisions.
        Now, making that statement, I am going to go through six
    different issues that I think illustrate the politics driving
    policy. Chairman Rogers talked about one, and that is not being
    fully prepared, despite the law of the land back in the
    appropriation bill for 1998 and money given to be prepared for
    a full enumeration census. The law required it, but politics
    apparently said we are not going to get ready. If you were
    ready, we would have had all of these details by now. So the
    lack of preparation is directly related to not following the
    law that President Clinton signed, the appropriation bill for
    Commerce-Justice back in November of 1997. So it affects the
    credibility of the Bureau for not following the law. This is
    all politics.
        The next issue I want to mention is poor legal advice you
    are receiving. For 6 years the Bureau has followed a plan that
    was illegal. We have been saying it has been illegal all along.
    Obviously you don't have good legal advice, and you are still
    following this poor legal advice, in my opinion. So we spent $1
    billion getting ready for something that is illegal. We both
    attended the Supreme Court hearing on November 30th. It was
    very interesting, and my first time to visit the Supreme Court.
    The strongest argument the administration could make was a
    standing issue and the standing issue was asking the Supreme
    Court to put off a decision until later. They did not argue
    much on the merits of the case--but they were really going into
    the standing issue--as if they were afraid to debate the issue.
        Now we are proceeding along a two-number census, which, for
    purposes of redistricting is illegal. I am telling you right
    now that it is illegal and you are going to lose again in
    court, so I hope you get some better legal advice to follow
    that up.
        On to the third item, and that is a two-number census. The
    Bureau has argued for years against a two-number census. You
    have used the words controversy and confusion to describe a
    two-number census. I can't imagine any public policy expert
    that says a two-number census is good for the date of April 1,
    2000 and yet, after the January 25th ruling, the Census Bureau
    now says, well, a two-number system is okay. That is bad public
    policy, and I think most people would agree with that. But
    politics is driving the decision.
        Now, let me go to the next one, the fourth issue, and that
    is the size of the sample and the way you are going to do this;
    you are calling it an ACE now. In 1990 it was a failure. It
    took a few years until they claimed they got some numbers. But
    they wanted to correct the problems in 1990 so they increased
    the sample to 750,000 and were only going to use households
    within a State. This was going to avoid this problem of
    contaminating numbers by using cross-State information that you
    talked a little bit about earlier. They made this strong
    argument that a 750,000 sample size, with housing units only
    within a State, is going to solve all of our problems. Well,
    come January 25th you are saying well, that is not exactly what
    you meant. Now maybe 300,000 will do it, and yeah, my district
    in Bradenton, Florida may be impacted by what happens in
    Georgia or North Carolina or South Carolina, we don't know
    exactly; but, you are going to regionalize the information, and
    once we get the details of the plan we will find out what
    States are being pooled together.
        But you have had to in effect flip-flop, again because of
    politics, and that is affecting credibility. You argue for the
    750,000 sample size using housing units within a State and then
    you flip-flop and say, well, we can do it with a sample of
    300,000.
        Then we go to the fifth issue. And that is, you have been
    saying that it is too late to make any changes. Everything is
    cast in stone. Well, last year when we were discussing the
    plan, they said well, we have to wait for the dress rehearsals.
    Those reports just came out last month. You said we have to
    wait for the Supreme Court; that came out January 25th. You
    have to wait for the Census Advisory Committee, which is an
    advisory committee appointed by the Secretary of Commerce; that
    came out January 22nd. The Monitoring Board, we want to get
    their records; they were released February 1. The Bureau wanted
    to get these reports, and now the statement is, well, it is too
    late, because it has all been cast in stone. The advisory board
    appointed by Secretary Daley recommended a post-census local
    review and they have been told it is too late.
        You wonder if this was just a sham. Why are we having a
    census advisory board? It seems like it might even be apologies
    due to the Census Advisory Committee, because it is too late to
    do anything since it is all cast in stone. Yet, as Chairman
    Rogers said, we don't have the numbers, we don't have the
    details, but it is all cast in stone.
        Let me come to the last of my points about this credibility
    problem and how politics is driving the issue. And that is,
    when you appeared before the Subcommittee on the Census back on
    March 1, I asked a specific question, and I need to get it
    clarified. The question was: Would the post-census local review
    be hurt by ACE, and I have a quote here, but basically you
    said, No, it won't be, it is not related, that ACE will not be
    impacted by a post-census local review.
        We did the post-census local review in 1990, and now I am
    hearing from Members on the Democratic side that post-census
    local review will hurt the sampling plan; but yet, in my
    committee you testified under oath that it doesn't affect it.
    So I am getting confused if the post-census local review does
    affect the ACE or not.
        Let me ask you the question first. Clarify whether ACE
    impacts post-census local review, because the Democrats are
    saying it is going to destroy sampling, and you said, no, it
    won't destroy sampling, it doesn't affect ACE. So what is the
    correct answer?

            accuracy and coverage evaluation (ace) and local review

        Mr. Prewitt. Mr. Miller, I think as I recall the question
    the way you framed it to me in early March was: What is the
    relationship between the accuracy coverage evaluation survey
    and post-census local review? And I believe my answer was that
    the accuracy coverage evaluation allows us to correct both the
    count and the address list, and since post-census local review
    is primarily about the address list, there is a relationship
    between the ACE and the post-census local review with respect
    to finding out how well we did with respect to the household
    address list. I believe that is what my answer was.
        I think you are framing that question somewhat differently
    now and I will be happy to answer--
        Mr. Miller. Let me just read the transcript here: ``Let me
    have one final question and go back to post-census local
    review. What is the relationship to post-census local review
    and the ACE issue? Is there any connection between the two of
    these, the 300,000 sample? Does it impact the--because I have
    heard that, you know, one of the reasons you are opposing it is
    that it will make it harder to do the sampling adjustment. Is
    that true, or----Mr. Prewitt: No, sir, I do not know on what
    basis that would have been suggested to you.''
        Then I come back and say, ``So the post-census local review
    has no impact, to your knowledge, on the 300,000 sampling
    process, right?'' And you say ``no.''
        Mr. Prewitt. I don't know if you have the rest of the
    transcript. I said, Unless what you have in mind is the way in
    which the accuracy coverage evaluation will help us. Do you
    have all of the transcript?
        Mr. Miller. ``Because of the time factor, it is important
    to know that the accuracy and coverage evaluation is an
    accuracy and coverage evaluation of addresses and people,
    right?'' I don't know where the rest of the page is here.
        Mr. Prewitt. I go on to try to explain the interaction.
        Mr. Miller. So, yes or no? I tried to get the answer last
    time. Will post-census local review affect the sampling, yes or
    no? Does it affect the ability to do ACE?
        Mr. Prewitt. It depends on how we implement post-census
    local review.
        Mr. Miller. You can't implement it without it affecting
    ACE? There is a lot of flexibility to implement it, isn't
    there?
        Mr. Prewitt. You have now introduced a bill which has the
    following features.
        Mr. Miller. Well, let me just say, could you design a post-
    census local review that would meet the basic goals of 1990,
    that would allow local communities to have some input into the
    final say that would not affect ACE? I guess that is what you
    are saying, is that correct?
        Mr. Prewitt. No, sir.
        Mr. Miller. Well, see, you can't----
        Mr. Prewitt. I didn't say I couldn't do it. We changed the
    question a few times, so let me do the best I can in trying to
    answer your question.
        The bill that has been introduced by the committee has the
    Census Bureau returning to some--we don't know yet how many
    jurisdictions, with maps and housing counts on each block,
    August 1, giving those jurisdictions 45 days to report back to
    us. That takes us to October 1-October 4.
        Mr. Miller. If the number of days were changed, would it
    make any difference?
        Mr. Prewitt. That is the point. I am trying to find out.
        Mr. Miller. I know my time has run out. I am confused
    whether we can do a post-census local review. I got the
    impression you said you could design one. It may not have the
    45 days, and we have flexibility on it.
        Other members are here, and not I do not want to use up all
    the time, but my problem is there is a credibility problem with
    the Bureau, and politics is driving the decision, as the
    Chairman said. You are the director, and the people higher up
    at the White House are apparently telling you what to do, and
    that is very sad, very unfortunate, and we still need to work
    and get the best census we can.
        I would like to get more clarification about--about a post-
    census local review that would be done without affecting ACE.
        Mr. Prewitt. Chairman Rogers, may I then offer to respond
    to Mr. Miller in writing with a more precise answer to that
    question? Because we have to frame the question just right to
    give the right answer. We would be happy to do that.
        Mr. Miller. I will write some questions that we can get a
    response to.
        Mr. Rogers. You are going to submit questions in writing?
        Mr. Miller. I will submit questions.
        Mr. Rogers. We will get the response in writing. Do we have
    a timeline we want to talk about here? You want a date?
        Mr. Miller. Right. You'll get back fairly quickly.
        Mr. Prewitt. I think so.
        Mr. Rogers. Fairly quickly?
        Mr. Prewitt. A week or so. About a year or so.
        Mr. Rogers. Fairly quickly is 10 years.
        Mr. Dixon.
        Mr. Dixon. Mr. Chairman, having just arrived and not being
    engaged in the debate or the dialogue, I don't have any
    questions but I would be glad to yield to Dr. Prewitt for
    anything he would like to say, if you didn't have enough time
    to respond to anything that was said.
        Mr. Prewitt. Thank you, Mr. Congressman. Actually, if I may
    respond to a few of the statements that Mr. Miller made.
        Mr. Dixon. Sure, be glad to.

                              final census design

        Mr. Prewitt. I think Mr. Miller would appreciate that there
    is, by definition, a date at which you can no longer change a
    census and still field it. There must be a date at which you
    can't change major procedures, that you can no longer field
    something which has been described correctly as the largest
    peacetime mobilization in history, which has to produce 1.5
    million maps, which has to recruit and train more persons than
    are in the Army, Navy and enlisted personnel combined, which
    has to optically scan some 1.5 billion pages. There must be a
    moment where it is too late to change the fundamental design if
    you are going to implement it.
        Now, the difference is at what point does that come? In my
    judgment, that point has come. Any major rearrangements to the
    fundamental design of the census at this stage will make it
    very difficult to be in the field on April 1 with a quality
    piece of work. That is my judgment.
        And we can spend many hours, and I would love to spend the
    many hours that it would take, walking through this schedule
    procedure by procedure and explaining why. So I do think that
    Mr. Miller and I agree that at a certain point you must be able
    to just implement a design. So the disagreement is, when does
    that point come? We believe it is now. We believe that
    introducing major new procedures at this stage will put the
    census at risk.
        Secondly, Mr. Miller talked about the difference in the
    sample design. The 750,000 sample design case was based upon
    what we felt to be a response to President Bush telling us to
    come up with a design that was more accurate and less costly
    than 1990. And the 750,000 cases allowed us to make State-by-
    State estimates for purposes of reapportionment. And when the
    Supreme Court said that was inconsistent with the statute, we
    no longer were under an obligation to do that. So the shift
    from 750 to 300 wasn't a flip-flop. It was a direct response to
    the Supreme Court decision. It wasn't a kind of theoretical
    flip-flop or policy change. It was what made the most
    statistical and operational sense, given the Supreme Court
    decision.

                        dual-system estimation procedure

        And again, Dr. Miller is a statistician, and I think that
    his differences with us are about the dual-system estimation
    procedure. It is not about sampling. I have had this
    conversation. We don't have an argument about sampling as such.
    We all believe in the importance of sampling and use of
    sampling across our statistical system. So what we are really
    having a discussion about is dual-system estimation, and I
    would urge the opportunity perhaps to have a hearing on that
    thing because that is really what the argument is about. Am I
    correct?
        Mr. Miller. That is a significant part of the argument.
        Mr. Prewitt. Yes. So in some respects, that is what we
    ought to be discussing rather than sampling in statistical
    methods more generally.
        Mr. Miller has made reference to the two-number census. I
    do think that he himself has suggested, if I am correct, sir,
    that we are not arguing about whether a second number ought to
    be used for purposes of the Bureau of Labor Statistics or
    Federal formula funding in which it has been widely
    acknowledged that that may be a better and a more sound
    database for doing Federal funding and for constructing our
    national statistical system.
        So we are not talking about two numbers. We are talking
    about a less accurate and a more accurate number. So the
    differences, I believe, sir, then, Mr. Miller, is whether the
    other number can be used for redistricting. So at least we
    ought to try to contain the conversation around where there is
    a difference, and it is not around two numbers as such, because
    Mr. Miller and other members have recognized that if there is a
    way to get your Bureau of Labor Statistics and your education
    statistics and your health statistics and your transportation
    statistics on a firmer basis and a more sound basis, it would
    be irresponsible of the Census Bureau not to provide that to
    this country.
        That happens repeatedly. All through our trade statistics,
    we are constantly revising the numbers as we get better and
    better information and firmer estimates. So the fact that
    statisticians constantly are improving their data is not
    something new to this country. And indeed if we didn't
    constantly improve it, you would have us up here arguing with
    us, why in the world are you sticking with these old numbers
    when you know how to make them better? You would want an answer
    to that question. We know how to make that number better and we
    would like to give it to the country. So I don't think that the
    two number accusation--and I have asked to be put in the record
    the letter from the Commissioner of Labor Statistics, saying
    why the BLS has agreed to or decided on its own to base all of
    the labor statistics, all economic statistics, on the adjusted
    number after 1990. By the way, it didn't take us 3 years to
    find the error. It took us about 4 or 5 months, but not 3
    years. And that is why the BLS decided to go ahead and base its
    data, its work, on the adjusted number.
        I guess if I could--and I will stop. I appreciate this
    extra time. I simply----
        Mr. Dixon. Haven't had any time recently, huh?
        Mr. Prewitt. I just have to say for the record that I do
    not feel manipulated by the White House.
        Mr. Dixon. Thank you. I was going to ask you about that.

                             political manipulation

        Mr. Prewitt. I do not feel manipulated by anyone. I do feel
    that there are very, very many different organizations,
    agencies, advisory groups, oversight committees and so forth
    who would like to tell us how to do the job, and congressional
    committees and so forth. As I have quipped, if you forgive this
    quip, that when I came to Washington I was told that this was a
    very, very difficult, job and after I had been here a month or
    so I found out it could not be a very difficult job because I
    hadn't met anyone who couldn't do it better than I could.
        Now I think it is because the stakes are very high that
    there are many people who would like to help us, but that is
    different from feeling manipulated for partisan purposes. I do
    not feel manipulated by either the Democratic or the Republican
    interest, by the White House or the Congress. I do feel like
    there is a high level of interest in this census, but political
    manipulation I do not feel.
        Now, we have a problem. We are trying to put it together as
    fast and intelligently as we can. We believe we have a plan
    that will count the American people as best as we can do in
    2000 without the additional support of other methods--and we
    can discuss this in great detail if you would like to.
        Mr. Dixon. I don't have any further questions, Mr.
    Chairman.
        Mr. Rogers. Mr. Kolbe.
        Mr. Kolbe. Thank you, Mr. Chairman.
        Dr. Prewitt, let me begin by saying I am very disturbed by
    the comments that I heard made by the Ranking Minority Member
    that there have been leadership in the Congress that have
    attempted to make sure that people do not get counted. The
    statement was made that there was an effort to cripple the
    count to make sure that it is not what it should be.
        I find those statements outrageous and frankly are just not
    true. They are false statements and that has never been the
    case. I think we have a difference of opinion about how this
    count should be taken, but there has never been a desire on the
    part of, I think, anybody, on either side of the aisle, to make
    sure we do not get an accurate count that can be made through
    the census.
        I think Mr. Miller put his finger on a lot of the problem.
    I think that what is going on here is really undermining the
    credibility of this Census Bureau, and I am glad to hear you
    say you don't feel you have been manipulated. If that is the
    case, then there is certainly no reason for any of us to shed
    any crocodile tears for the problems that you are having. If
    there are any problems, they are problems, in my opinion, of
    your own making.
        I find it strange and a little bit incredulous to suggest
    that there is not political involvement in the way the Census
    Bureau has come up with the proposals as to how it is going to
    conduct the census. After all, you are a part of the executive
    branch, part of the Commerce Department and part of the
    executive branch, and I do believe there is a political
    direction to what is going on here.
        But let me, if I might, just ask a question. I am not a
    statistician. I am not an expert as either you are or Mr.
    Miller are in this area. But the question I have goes to
    sampling rather than what we were just talking about a moment
    ago. Let me begin by saying you just made a point, I think,
    that is very important. If the Bureau of Labor Statistics and
    others can improve the kinds of data we get of employment, and
    the Commerce Department of trade data we get through sampling
    techniques, we should do so and I absolutely agree. Of course,
    we are always going to be trying to improve that kind of data.
    But I think it is important to recognize that for the most part
    you use fairly aggregate kinds of numbers.
        This goes to the heart of the question that I want to ask
    when it comes to polling. All of us as politicians are fairly
    used to looking at political polls, and we all like to think to
    some degree we are pretty good at reading some of those
    political polls. And so if I look at a political poll that is
    done nationally, or even in my congressional district, we have
    some degree of confidence we can have, what the margin of error
    that is going to be.
        But as a politician I immediately like to turn to the
    cross-tabs and I like to look at different information. And so
    in my congressional district I want to see how a certain group
    feels about the issue of, let's say, Social Security. And so I
    am going to look to the cross-tab and I am going to look to see
    what women who are between the ages of 35 and 50 and who are
    single and have an income over $40,000 and who live in the
    rural area and are Hispanic or Native American, how they feel
    about Social Security. Would you not agree that the margin of
    error rises rather significantly?

                     MARGIN OF ERROR AMONG CROSS-TAB AREAS

        Mr. Prewitt. Each of those extra cross-tabs?
        Mr. Kolbe. Yes, when you add each of those extra cross-
    tabs. My point has always been when it comes to the census,
    that is great--sampling can give us a better count nationally.
    Probably also at the State level. Even at the local areas. But
    ultimately the census is used, as you know, for--and we are
    talking here for political purposes now, it is used for, it is
    used not just for congressional redistricting but it is used in
    my area for the boards of supervisors or commissioners. It is
    used for the State legislature, of course. It is used for the
    school boards. It is used for the local city wards and so
    forth.
        And so as each of those lines draw over each other, you get
    finer and finer areas. Ultimately when you do the sampling that
    you have to do, you have to end up locating the people you
    decided to sample in a particular place. You have to locate
    them somewhere so that I know exactly where they are. The
    courts in Arizona this last time decided that the districts
    would be drawn to--they decided since computers were capable of
    doing it, that the congressional districts would be drawn to
    precision where there would be zero differential. They couldn't
    divide the number by six. They had one extra person so one
    district got one more person. Otherwise, the other five
    districts were exactly the same number of people.
        So you have to actually end up putting those sampled people
    in exact location if you are going to be able to do that. How
    can you do that with accuracy? How do you know that this person
    that you are going to put in this census block is a woman of
    this age and Hispanic and over the age of 35? How do you know
    that you have got the right person in the exact right place?
    You didn't count them. You sampled them.

                        MEASUREMENT AND SAMPLING ERRORS

        Mr. Prewitt. Mr. Kolbe, in this kind of work, there is
    something we call measurement error and there is something we
    call sampling error. I believe your district includes Tucson. I
    was recently in Tucson. And someone drove me through a
    neighborhood, and in it was a street. There were a series of
    bungalows, small little houses, every house had an address. You
    think it is really going to be easy to count this block. And
    then they took me around behind. Every one of those houses had
    three or four trailers parked back there, with a migratory
    worker living with families, so forth and so on. You know your
    neighborhood much better than I do. None of those trailers had
    an address. Now, we have got to go find them. We have got to
    get behind and make sure we find them all. They are very hard
    to find. That is what creates measurement error.
        And then there is something called sampling errors. You
    just referred to it, the confidence interval around any given
    sampling estimate. We therefore have to make a judgment about
    whether even down at the small area level, whether the sampling
    error is going to be smaller than the measurement error. And
    you ask us how we can make sure we get the precise number of
    people in each block. We aggregate those blocks up. Your
    district probably has, I don't know, say 6,000 blocks. By the
    time we aggregate those six thousand blocks up with sampling
    error, it is in the nature of the statistic--as Dr. Miller
    will, I think, agree with me--it is in the nature of that
    procedure that you cancel out the sampling errors; but the
    measurement errors add up, so at the end of the day you have a
    less accurate count of your district if we have to aggregate
    and add up all of those measurement errors, all of those places
    that don't have addresses and we are going to have a hard time
    finding them. So it isn't that we will be precisely correct. No
    estimate will be precisely correct. But the question is, which
    error is going to be greater for the purposes that we feel an
    obligation to kind of----
        Mr. Kolbe. It has to be precisely correct, because when you
    draw all these lines, there is going to be one block that is
    all by itself. It is going to be the only one that is not in
    more than one of all the 15 or 20 different political
    subdivisions that I have got. So it has got to be exactly
    correct to have the right number in that block. So you have to
    make a decision.
        Mr. Prewitt. Right. But what I am suggesting is that in
    that block if we have undercounted, say, 7 or 8 percent because
    of the difficulty of the address list, the resistance of being
    counted, all the hard-to-enumerate, hard-to-count problems,
    then we now have a block that is off by 7 or 8 percent. The
    question is whether we can get closer to being accurate in
    there using this method than the measurement method and the
    counting method. It is nothing more complicated than that.

                                 USE OF COUNTS

        Mr. Kolbe. I have one other question. I am not satisfied
    with that answer. Maybe Mr. Miller can help me understand it.
    Maybe he has got a problem too. I have one other question. That
    is, now that you have decided you are going to do this two-
    count, if you are successful in doing this two-count, is it
    your understanding that every local governmental unit will be
    allowed to pick and choose as to which count they use?
        Mr. Prewitt. The current law, as I understand it, is the
    Constitution of the United States and Title 13. The Census
    Bureau provides the most accurate count that it can. The
    decision of whether to use that count, whether it is one number
    or two numbers or more numbers, the decision whether to use
    that is a State decision, not a Federal decision, not a
    decision that the agency can make. A State can go out and do
    its own census for purposes of redistributing, drawing
    congressional boundaries, State legislative boundaries, county
    seats, whatever it wants to do, it can use whatever numbers it
    wants. That is not a Federal law. We are only obligated by law
    to provide the numbers to the State within 12 months of the
    start of the census date, March 31, 2001. The use of it is not
    our decision.
        Now, as I understand the current prevailing law, any number
    we produce that is adjusted using our accuracy and coverage
    evaluation, the number that is unadjusted shall be reported at
    the same time and it will be to the same level of detail. That
    is, any jurisdiction in the country will have both sets of
    numbers, just as the Bureau of Labor Statistics had both sets
    of numbers and chose to use them more correctly. So the answer
    is we will make available to every jurisdiction both sets of
    numbers if that is what they want.
        Mr. Kolbe. And so which of those is the official number? Or
    is it neither or both?
        Mr. Prewitt. Both, right.
        Mr. Kolbe. Both?
        Mr. Prewitt. The official number from the Census Bureau
    will be the number that it believes to be the most accurate.
        Mr. Kolbe. We know which one that is going to be.
        Mr. Prewitt. Not necessarily, we don't know that. We won't
    know that till the time.
        Mr. Kolbe. I think you have made it pretty clear which one
    you have decided is going to be the most accurate.
        Mr. Prewitt. Mr. Kolbe, I have said and I will say again. I
    am under oath--I am not under oath. Nevertheless, if I may, I
    am under oath as far as I am concerned but even when I am not
    under oath, I would say that the probability is very high that
    the Census Bureau will believe that the adjusted number is more
    accurate than the unadjusted number. It is not certain. We may
    learn something. We may have a difficulty. Something may occur
    in the process and if that happens, we will call the unadjusted
    number the official number because we will believe it is more
    accurate. I do not think that is likely to be the case, but if
    it is, it will be the case. We will not report a number to this
    country and call it official if we don't think it is the most
    accurate number that we have available.
        Mr. Kolbe. As far as you are concerned, a State could
    determine to use, for its purposes of congressional
    redistricting and perhaps legislative redistricting, use the
    sampling number, and could allow cities to use the actual--or
    rural areas, counties, to use the actual count because it comes
    out better for them. So that when you aggregate all those, you
    have got quite a different picture.
        Mr. Prewitt. It is nothing that we control, have a position
    on. That is a State decision. That is not something the Census
    Bureau----
        Mr. Kolbe. Is it not true--you said the States can make
    that decision but if a State decided, let's say, to take my
    State of Arizona where 60 percent of the population and the
    power in the legislature is now in Phoenix, in Maricopa County,
    if they decided that they would just by decree add 200,000
    people to Maricopa County and they tried to use that for
    redistricting, don't you think they would run into a few legal
    problems?
        Mr. Prewitt. I think they certainly would, but it wouldn't
    have anything to do with the Census Bureau.
        Mr. Kolbe. But it would run into problems of Federal law.
        Mr. Prewitt. Sir, I am not an expert on--whatever law would
    be at stake here.
        Mr. Kolbe. Well, so you are going to in the end make a
    decision after you have done it as to which one you are going
    to designate as the official count; is that correct?
        Mr. Prewitt. That is correct.
        Mr. Kolbe. And you are saying at this point you have not
    made that determination?
        Mr. Prewitt. We can't until we see the numbers.
        Mr. Kolbe. I see. Thank you, Mr. Chairman.
        Mr. Rogers. Ms. Roybal-Allard.

                            DIFFERENTIAL UNDERCOUNT

        Ms. Roybal-Allard. Thank you, Mr. Chairman. Mr. Prewitt, I
    am going to get a little more local in my questioning. A recent
    GAO report came out, and I believe it was commissioned by
    Congressman Miller, and the report showed that the biggest
    undercount--first of all, the biggest loser in the undercount
    was California, where we lost about $2.2 billion, and my
    district was the ninth largest undercounted area in the
    country. Were there any surprises that came out of that report
    or did it simply reaffirm what the Census Bureau already knew?
    And if not, are there any adjustments or anything that you are
    planning to do in order to address some of the things that came
    out of the report?
        Mr. Prewitt. Well, we certainly have known and indeed the
    country has known that we undercounted in 1990 and that that
    undercount was differential by demographic group and geographic
    group, geographic location. And your State has a high
    concentration of the groups which are most difficult to count.
        As the Census Bureau, of course, we don't do the kind of
    analysis which says what are the economic implications of the
    undercount. Certainly nothing in the GAO report surprises us.
    We would have been very surprised if the States which would
    have suffered within the GAO account had been those States
    which had low populations of Hispanics or low populations of
    African Americans or low populations of American Indians and so
    forth--been very, very surprised.
        So in that sense, the results of the GAO analysis are
    highly consistent with where we know the differential
    undercount to be concentrated. We obviously feel very, very
    strongly it is an issue of social justice to try to reduce that
    differential undercount, and the Census Bureau has spent a lot
    of time, a lot of energy, a lot of effort to try to come up
    with a set of methods that will reduce that differential
    undercount which will allow us--and that includes our outreach
    programs, our partnership strategies, our multiple language
    forms, everything else, in order to try to do something about
    that.
        We have to say to the country that the proportion of the
    population which is difficult to count has grown. There are 33
    percent more new immigrants in the country today than there
    were in 1990. The Hispanic population is up. The African-
    American population is up. The number of irregular housing is
    up. The number of highly mobile people, the number of single-
    parent households, which means no one is home, is up. All of
    the things which we know from our earlier experience make it
    difficult to find people have increased in proportion since
    1990.
        We will do the best we can to find those people and count
    them and try to get rid of the differential undercount, but we
    will not be fully successful for exactly the reasons I just
    explained to Mr. Kolbe. All of those unaddressed trailers back
    there are new since 1990. We don't have an address file. We are
    out there walking those blocks, pounding on those doors,
    walking in the alleys to try to find them. It is very difficult
    to find them all.
        So it is a long answer, and I am sorry; but, no, the GAO
    report, the pattern of the results was not surprising, given we
    know what we know about the differential undercount. And
    secondly, we have put in place everything that we can think of
    that will try to reduce that differential undercount.

                          EFFECTS OF PAID ADVERTISING

        Ms. Roybal-Allard. Also, Sacramento, California was one of
    the sites for the dress rehearsal, and it is my understanding
    that the paid advertising that was used had increased the
    awareness of the census in that area from about 28 percent to
    80 percent. However, based on the 1990 census, we also know
    that awareness doesn't necessarily translate into action. In
    other words, even though people are aware of the census, know
    what it is about, doesn't mean that they are actually going to
    fill out the form and turn it in.
        Can you tell me what is being done to address this problem
    so that not only is the awareness raised but that awareness
    actually translates into action?
        Mr. Prewitt. If I could respond to that question in two
    parts. It is very important to understand that the advertising
    campaign is designed to increase the initial response rate.
    That is, response rates all across our surveys, not just those
    in the Census Bureau but across the Federal system and indeed
    across the private sector, they are going down. There is less
    civic engagement in this country than there was in 1990. So the
    response rates are going down. So the advertising campaign has
    tried to stop that erosion. The awareness and motivation are to
    try to get that response rate up.
        The people who we are trying to get to fill out the
    questionnaires are not the difficult-to-count. That is, the
    advertising campaign won't reach into those alienated, anxious,
    fearful, highly mobile population groups, linguistically
    isolated and so forth.
        So in addition to the advertising campaign to increase
    awareness, we have to go out and motivate those people. We have
    to go to their churches. We have to go to their community
    groups. We have to go to their schools. We have to go to where
    they are plugged into the society.
        We have signed over 10,000 partnership agreements. We
    expect to sign close to 100,000. Many of those will be very,
    very effective. Not all of them, of course, but many of them
    will be. We have a Census in the Schools Program that is going
    to reach 100 percent of the schools. We have linguistically
    equipped people in our questionnaire assistance centers and our
    telephone centers. All of that has been put in place to reach
    the hard-to-count. But that is different from the advertising
    campaign which we hope will boost the initial response rate so
    that we have to find fewer people. But reaching the hard-to-
    count takes different kinds of strategies.
        Ms. Roybal-Allard. So you are reaching out, then, to
    community groups and people and organizations that have the
    trust of these hard-to-attract people, groups?
        Mr. Prewitt. Yes. We have spent a great deal of time on
    what we described as our partnership strategy and our outreach
    strategy, targeted primarily if not exclusively on the hard-to-
    count regions and population groups.
        Ms. Roybal-Allard. Also, based on the dress rehearsals, was
    there any information that came out of those that was a
    surprise and where you had to make certain adjustments,
    particularly Sacramento? Quite frankly, I was surprised that
    Sacramento had been chosen for the dress rehearsal, but I
    understand it has all the characteristics that are needed. But
    was there any new information that came out of those dress
    rehearsals that perhaps the Census Bureau was not aware of and
    that you are now changing your techniques?
        Mr. Prewitt. The most important thing that came out of the
    dress rehearsal was that the pattern that we feared would be
    there since 1990, that is, hard-to-reach and differentially-
    hard-to-reach, was reconfirmed. That is, the very problem we
    were trying to address with the accuracy and coverage
    evaluation on initial design persists and is indeed expanded.
        The other very important thing that came out of the dress
    rehearsal experience for us is it identified infrastructure
    components of our design which had to be enhanced. Optical
    scanning, supervisory ratios, a number of operational
    components that had to be enhanced to go into the census
    period. That is what we are doing in that lock-up room is
    enhancing those procedures. That is why we don't have a number
    today, because until we have fully incorporated the results of
    that experience into our plan, we do not want to tell you how
    many people are going to have to be here between noon and 4:00
    on a Tuesday afternoon and how many forms are going to be put
    in a truck and moved. All of that is the detailed work that we
    are doing.
        The second most important thing that we learned from
    Sacramento is which of our procedures should be enhanced to
    make the census more robust and on a firmer footing.

                              USE OF CENSUS COUNT

        Ms. Roybal-Allard. Let me have some clarification in some
    of the responses that you had to some of the other members. Is
    it my understanding, then, that you come up with the most
    accurate number, which you would call your official number, but
    that States and local governments are under no obligation to
    use those numbers for any purpose? It is entirely up to the
    States?
        Mr. Prewitt. The State can generate its own internal
    obligation, its own rules and its own Constitution, but that
    has nothing to do with the Census Bureau. The Census Bureau is
    obligated to produce the most accurate statistics it can for
    this country. The use of those numbers is then left to the
    political and legal processes. It is not a Census Bureau
    policy. The Census Bureau certainly would prefer to call the
    most accurate number the official number whenever we can. But
    that is a number that is changing all of the time as we
    continue to improve our work.
        Ms. Roybal-Allard. And then there was some question about
    using two numbers and having two numbers and the confusion
    about that. If you were just to use the actual enumeration,
    just the one figure and not to make any adjustments--or I guess
    that was step two--if we were to eliminate step two, what would
    be the results? In other words, would then we as a country, as
    Members of Congress, economists and everyone, would we be using
    numbers for which we had no way of knowing the accuracy, how
    close we were and so we would be in this guessing game of
    developing our labor statistics, our economic plans? Everything
    would be then based on a guess without any understanding of how
    close we were to the actual numbers?
        Mr. Prewitt. I am afraid that is the case. That is, if we
    did not do the accuracy and coverage evaluation and the only
    number we had was the number that we had by the end of 2000
    itself, that is, there would be no way for this country to know
    how we did--when this country debates the undercount and the
    differential undercount, it is debating the results of work
    that the Census Bureau has done. This is the agency in the
    country that produces a report card on its own performance. So
    when the country has a discussion about how well we did in
    1990, it is basing that on work that we ourselves have
    produced. We take our responsibilities so seriously that we
    report our levels of inaccuracy as carefully and fully as we
    try to be accurate in the first place. It is the kind of agency
    we are.
        Ms. Roybal-Allard. So it is actually in the best interest
    of the country to evaluate those numbers and to readjust and
    then provide us with the most accurate information possible?

                               TWO-NUMBER CENSUS

        Mr. Prewitt. I would think it would be in the interest of
    the country to know how well we did in 1990, 1980, and of
    course again in 2000. If I could give one small footnote on the
    two-number conversation. In 1990 it was a two-number census,
    not about the issues that you are thinking.
        What we do in every year, 1980, 1990, 1970, we count the
    overseas, the federally-employed personnel; that is, the
    military, Diplomatic Corps and so forth. For purposes of
    apportionment, we include that in the counts. For purposes of
    redistricting, we take it out. We have been doing that for
    years. No one is worried about it. That is two separate
    numbers. One is official for apportionment purposes. The reason
    we put them in for apportionment purposes is we can locate them
    in the right State. The reason we take them out for
    redistricting purposes is we can't allocate them within the
    State. So for redistricting purposes we can't have them in
    there.
        That has been going on for years. That is a two-number
    census. One official apportionment number; a second official
    count for redistricting. It has never created a lot of
    confusion or consternation and so forth. The idea that two
    numbers are necessarily more confusing than a progressively
    more accurate number, this is a case where the most accurate
    number for reapportionment includes the overseas military but
    for redistricting excludes them. So the Census Bureau produces
    what it considers to be the most accurate number for those two
    different purposes.
        Ms. Roybal-Allard. Thank you.

                           STATE USE OF CENSUS COUNTS

        Mr. Rogers. Thank you. Dr. Prewitt, well, your
    determination is to leave it to the States or localities to
    decide which of these two numbers they want to use--that is
    your goal, as I understand it?
        Mr. Prewitt. It is not my determination. It is a State
    decision, not a Census----
        Mr. Rogers. But your goal is to leave it to the States to
    decide which of the two numbers to use, correct?
        Mr. Prewitt. That is not a goal. That is the law. It is not
    my law. It is not the Census Bureau's law. It is the State law
    that would decide if it wants to use the number.
        Mr. Rogers. What I am driving at is it is your policy that
    whatever the States do with these two numbers is their
    business, correct?
        Mr. Prewitt. Correct.
        Mr. Rogers. If that is so, then the only way to achieve
    that is for you not to declare any of these numbers official
    because many, if not all, of the States' laws, either by State
    constitution or statute, require them to use the official U.S.
    census number in their redistricting operations. So if it is
    your policy to leave the decisions strictly to them to decide
    how they want to do it, would it not be the best thing not to
    declare either number the official number?
        Mr. Prewitt. Chairman Rogers, that law is a State law. They
    can use it, change it, do what they want to it. That would not
    be a Census Bureau law. We have a policy, not a law. We have a
    policy and we intend to honor that policy and we have been
    doing it since 1790, to present to the country what we believe
    to be, at any given time in a process of constantly trying to
    improve, the most accurate count we can come up with for
    different kinds of purposes and they vary from purpose to
    purpose; and that, in effect, would be the official number for
    that purpose.
        Mr. Rogers. Well, you are making lawyers happy. They are
    seeing dollar figures. Lawsuits after lawsuits after lawsuits,
    as Dr. Miller has said, because the credibility of these
    numbers is going to be so confused by your giving two numbers
    for different purposes and it is astounding to me that we are
    at this point.
        You wanted to clarify something?
        Mr. Miller. Just a clarification on this two number issue.
    So on December 31 or before that date, you will release
    statewide numbers based on the full count, right?
        Mr. Prewitt. Correct.
        Mr. Miller. Before April 1 you will release two sets of
    numbers by census block, one being the full count, the other
    one being the adjusted number; is that right?
        Mr. Prewitt. The full count minus all the errors that we
    know that are in there; but yes, correct.
        Mr. Miller. It would be two sets of numbers released by
    block, right?
        Mr. Prewitt. Correct.
        Mr. Miller. One time you said if they want. And I want to
    make sure they will have the data.
        Mr. Prewitt. The data will be available in whatever form as
    best we can provide it, in whatever form the States want it. We
    are probably going to do it on CD-ROM and most States are happy
    to have it that way.
        Mr. Miller. They will have access to all the block
    information, both sets of numbers?
        Mr. Prewitt. Correct.
        Mr. Miller. I thought the Secretary of Commerce said they
    would both be official numbers. Are you saying only one would
    be official and one will be unofficial? I am confused by that.
        Mr. Prewitt. I am not sure. I don't know what the reference
    is to the Secretary, but let me say the Census Bureau's policy
    has always been, as I say, for 200 years is----
        Mr. Miller. You have only done two numbers once. This time.
        Mr. Prewitt. No, no. I just said a minute ago we did two
    numbers in terms of putting the overseas military in and out.
    We have done that whenever it has been appropriate. The Census
    Bureau, like any major statistical agency, is constantly
    improving as it corrects, finds errors, improves its
    methodologies and so forth. Any given statistical series has
    the property that it is often being improved as you go. And
    depending on how they are being used, we would say for these
    purposes, this is the most accurate number.
        We believe, and as I said to Mr. Kolbe, and I do not want
    to play any kind of word game, it is our judgment today that
    the more accurate number in the spring of 2001 will be the
    adjusted number using the accuracy and coverage evaluation. It
    may not be.
        Mr. Miller. We are going to have one official number--would
    you clarify that if I am not----
        Mr. Prewitt. One official number.

                         DELETING PEOPLE FROM THE COUNT

        Mr. Miller. As Mr. Kolbe was asking about, you really work
    with census blocks, 6, 7 million blocks in this country and you
    are going to have to add people and delete people from a block
    based on the statistic, right?
        Mr. Prewitt. In using accuracy coverage evaluation, yes.
        Mr. Miller. You are actually going to delete people after
    they have been counted?
        Mr. Prewitt. No, never. We will not delete any record from
    the census.
        Mr. Miller. In 1990 they deleted people.
        Mr. Prewitt. I would have to check on that.
        Mr. Miller. Look at Long Island or Bucks County,
    Pennsylvania.
        Mr. Prewitt. We do not delete records from the census file.
    Anyone who fills in a form, or any other way we get it, once it
    is in the census records, it will not be deleted.
        Mr. Miller. You are not deleting people when you do the
    adjustment process, you are saying. Once the official number is
    there, and say there are 500 people in the census block, it
    would never go below 500 people after you have had the official
    count; is that right? My understanding is you actually delete
    people. You did in 1990.
        Mr. Prewitt. I am sorry, I will have to go back and give
    you a report on what we did in 1990. We do not delete census
    records.
        Mr. Miller. But you are going to add individuals. Correct
    me--Mr. Kolbe said you may have to add a Native American to
    this census block or you may have to add an African American
    male to this one. You add individuals to a block when you do
    your adjustment, right?
        Mr. Prewitt. We create an arithmetic adjustment that gives
    the States, if we are reporting this back to the States, our
    best estimate of the population size of a given block.
        Mr. Miller. But when you adjust it, you will add people but
    not delete people from the original count?
        Mr. Prewitt. The arithmetic adjustment that we will do does
    not sort of add individual cases or subtract individual cases,
    it comes up with a point estimate of the number of people that
    we believe is the most accurate number of people who are on
    that block with people of that characteristic.
        Mr. Miller. So you will be adding or subtracting, I think?
    You will be subtracting?
        Mr. Prewitt. But not census records. Very important. That
    is really very important. I want to make sure the record
    indicates that.
        Mr. Miller. You will subtract--if a block has, say, 100
    people, on average you should only have 95 people, we will make
    that 95.
        Mr. Prewitt. Correct.
        Mr. Miller. So you will reduce the original count to an
    area----
        Mr. Prewitt. Arithmetically, but we will not be subtracting
    out five records.
        Mr. Miller. But you will be deleting----
        Mr. Prewitt. It is really not the same. It is so important
    for me to argue----
        Mr. Miller. You are not deleting.
        Mr. Prewitt. We are not deleting census records.
        Mr. Miller. You are deleting within a block--that is a very
    small area. What is the average size of a block?
        Mr. Prewitt. Thirty households. About 6,000 blocks per
    congressional district.
        Mr. Miller. So if a census block has a count of 50 people,
    all right, we go--and that is the full enumeration number--by
    adjustment you can come back and say we counted 50 people but
    on a statistical average we shouldn't have that many people. We
    will say there is only going to be 48 people.
        Mr. Prewitt. Correct.
        Mr. Miller. But that is deleting people. Not individuals
    but--you have to delete an African American male, a Hispanic
    female? You delete it by that detail for all 6, 7 million
    blocks? You have to, I guess.
        Mr. Prewitt. Yes.

                             dual-system estimation

        Mr. Miller. So you are going to have accurate enough
    statistics with 6, 7 million blocks to say--I think we need to
    add 2 African American males in this block but we want to
    subtract 2 female Hispanics out of this block. So you are going
    to be able to do that for all 6, 7 million blocks based on the
    sample of 300,000.
        Mr. Prewitt. That is what the dual system estimation allows
    us to do. But you are a statistician, you appreciate that.
        Mr. Miller. But I think it is impossible.
        Mr. Prewitt. Sit down and spend some time with us on the
    design, Mr. Miller. I would love to do that.
        Mr. Miller. It is an impossible dream to get the accuracy
    you want. I feel very confident you are going to lose for
    redistricting purposes in the court. You are selling snake oil.
    You are going to lose in the court.
        Thank you, Mr. Chairman.
        Mr. Prewitt. Mr. Chairman, may I just quickly speak on
    this? As I can go back again, the problem is not whether we are
    going to be perfect. We know we are not going to be perfect.
    The problem is whether we are going to be closer to the true
    number using dual-system estimation. They are not. Mr. Miller,
    I really do not think it is snake oil. We may have a difference
    about dual-system estimation, but it is not snake oil.
        Mr. Miller. Snake oil is that it is going to lose in the
    courts and while all the confidence is being put in sampling.
    Sampling is going to be ruled illegal for redistricting, as it
    was for apportionment. What do you have? You are not going to
    have any post-census local review or more languages because all
    you are relying on is sampling. That is my snake oil argument.
        Mr. Prewitt. No, sir. That is not all we are relying on. We
    have a plan which we can talk about in great length, which we
    believe will give the most accurate count that we can reach
    without statistical methods in the year 2000, and if the States
    want to then use those numbers for redistricting, they will. If
    the court rules that is what has to happen, it will. We still
    will believe in an accuracy and coverage evaluation purpose for
    statistical purposes beyond the year 2001. We will believe very
    strongly in it for exactly the reasons you have acknowledged
    yourself.

                            use of block information

        Mr. Miller. The problem is block information, and that is
    what Mr. Kolbe was raising. That is what you use for
    redistricting, block information. And I was in Tallahassee last
    week. It was interesting. I stopped by the Subcommittee staff
    that is getting ready for reapportionment. You have probably
    seen these computers. They draw these lines. It is all based on
    block. You are going to add or delete basically individuals,
    not a specific named individual from each of those blocks, and
    it is a mind-boggling task that on the accuracy alone, the
    courts will throw it out.
        We were at the hearing of the Supreme Court back in
    November and Justice Scalia said, Are we creating a whole new
    area of census law? He is right, we are creating this area of
    census law. Every community is going to pick and choose, Oh, I
    don't like that number. Oh, I want this number. That is the sad
    part of this census.
        Thank you, Mr. Chairman.

                                 second mailing

        Mr. Rogers. Well, the Census Bureau is the only group of
    people I know who is capable of statistically justifying saying
    1 and 1 don't equal 2, it equals 2.38 or something like that. I
    think the courts are going to bring us back to our senses, S-E-
    N-S-E-S.
        Dr. Prewitt, for 3 years we have been told by the Bureau
    that a good mail response rate is critical for two reasons:
    one, mail responses are most accurate; and, two, it saves time
    and money. And for 3 years the Bureau assured us that they had
    a plan to achieve a 67 percent mail response rate which would
    be 2 percent better than 1990. A critical improvement was to
    use a second replacement questionnaire to get people to
    respond. How much of your goal of 67 percent mail response rate
    was contingent on the second mailing?
        Mr. Prewitt. Our best estimate was the second mailing would
    add about 6 percent cases, so 6 percent. I mean, from 61 to 67
    would have been the result of the second mailing.
        Mr. Rogers. Did you test that--did you have a second
    mailing in the dress rehearsal?
        Mr. Prewitt. Correct.
        Mr. Rogers. What impact did it have on the response rate in
    both cities?
        Mr. Prewitt. Our best estimate--it is somewhat difficult,
    as you can appreciate. It is awfully hard to know whether the
    person who sent in the second one would have sent in the first
    one if they hadn't gotten the second one, and so forth and so
    on. Our estimation is we are right on the mark. That is, 6
    percent; and maybe, Sacramento, there is one way to interpret
    the data which would suggest 8 percent.
        Mr. Rogers. My information was that in South Carolina at
    Columbia there was an 8.2 percent increase and in Sacramento a
    7.5 percent increase. Is that accurate?
        Mr. Prewitt. Right. But what I am saying, sir, we tried to
    do research on that. I am not going to quibble about the
    numbers. You can't tell exactly how many of those would not
    have come in anyway, but say 7\1/2\, 8 percent.
        Mr. Rogers. That is substantial.
        Mr. Prewitt. Absolutely. Even if it is 6 percent, it is
    substantial.
        Mr. Rogers. It was very successful. But you deleted that
    now, have you not, in your 2000 plan, the second mailing?
        Mr. Prewitt. Correct.
        Mr. Rogers. Not going to do that?
        Mr. Prewitt. Correct.
        Mr. Rogers. Even though it will reduce the accuracy
    substantially?
        Mr. Prewitt. We think by including it, it will increase the
    inaccuracy substantially or we wouldn't have eliminated it. We
    wouldn't eliminate something because it reduced accuracy. We
    would only eliminate it because it increased inaccuracy.
        Mr. Rogers. You have lost me now. If doing a second mailing
    would increase the response rate by 8 percent, why is that not
    a good thing?
        Mr. Prewitt. Because it also increased substantially
    duplicate responses, duplicate returns. Duplicate returns are
    very difficult to get out of the file. There is something
    like--our estimate if we did a blanket mailing in 2001, the
    number of duplicate forms would be something like 3\1/2\ to 4
    million. Now, when people send in two forms--you know, there
    are two reasons we didn't do it, Mr. Chairman. One was--let me
    talk about that one first, then get back to the duplicate form.
    One was public confusion. People didn't like it, just like you
    and I don't like if somebody sends us and then we respond and
    then a week later we get another thing from that place saying,
    Why didn't you answer? I say, I already answered. Can't those
    guys read their mail?
        You create a real problem with blanket mailing because a
    blanket mailing goes out to, after all, 60 percent of the
    households of this country, which is about 70 million
    households who have already responded. They are going to be
    angry with us.

                             target second mailing

        Mr. Rogers. Originally you were only going to send the
    second questionnaire to those households that did not respond
    to the first one.
        Mr. Prewitt. That is the targeted mailing, yes. The
    targeted mailing, we have eliminated that procedure for the
    following reason. Our contractors looking at the problem,
    examining it, the gap in time that it adds to our schedule is
    about 4 or 5 weeks. The reason is you can't send out the
    targeted mailing until you are certain that everybody who is
    going to send the first mailing in has finished. Then you have
    got to find those addresses. You have got to readdress and
    remail. The problem with that delay is nonresponse follow-up,
    which is a very critical part of this process, is then delayed
    by 5 or 6 weeks. The deterioration in the data and nonresponse
    follow-up starts almost immediately. I cannot say strongly
    enough, we have got to locate people where they lived on April
    1. Memory begins to degrade. Mobility begins to take place.
    Those things will degrade the quality of nonresponse follow-up.
    So for a procedure that may add some cases, it will either
    create duplicates, which are errors that we then have to fix,
    or it will degrade the entire nonresponse follow-up strategy if
    it were a targeted mailing.
        Mr. Rogers. In order to make up for that expected 6 to 8
    percent drop in mail response rates, in order to go out and
    find the people that would have shown up on that second
    mailing, you have got to spend a lot of extra money to hire
    additional enumerators to go find these people, do you not?
        Mr. Prewitt. Correct. But if we mailed the blanket mailing,
    again, I think that number as I recall--because we have got to
    readdress, remail, pay postage, reprint forms and so forth--I
    think that number is close to 100, about $110 million. So it is
    not the response rate that has increased. You have got to do
    that as a net number, not as an absolute----
        Mr. Rogers. If you do a target mailing only to those that
    did not respond the first time.
        Mr. Prewitt. And then run the risk of all of the errors
    that are going to be introduced in the nonresponse follow-up by
    delaying that by 6 weeks, we are in the middle of the summer?
    That is a very serious----
        Mr. Rogers. Thirty days. My information is it would take
    about 30 days more time than planned to do the target mailing.
        Mr. Prewitt. We then would have to wait. It takes about 30
    days before we could remail. We then remail. Then we have to
    wait for those to come in and we have to code those, optically
    scan them, make sure they are part of the address list before
    we go out into nonresponse follow-up. So the total elapse time
    is 5 to 6 weeks.
        Mr. Rogers. What is bad about that?
        Mr. Prewitt. The fundamental design of the census is a
    mail-out/mail-back design. We are going to send this form with
    first an announcement letter, then the form to 120 million
    addresses. It is very, very critical that we understand this is
    based upon mailing.
        Mr. Rogers. Stay on track with me here. What is bad about
    the 6 weeks delay in the second response?
        Mr. Prewitt. After we get the responses in, we have to go
    out and knock on the doors of that 40 million households which
    did not respond. Now, 6 weeks after April 1, or 9 weeks after
    April 1, or even a day after April 1, things begin to degrade.
    Houses get torn down. Apartments get converted. People move.
    People forget who their roommates were. All of the
    characteristics that make it difficult to measure people are
    harder to measure 6, 7, 8 weeks after the fact than the day of
    the fact. That is what is at stake. We think we would have more
    errors than we would gain with a targeted mailing. If we
    thought that the targeted mailing would give us a better result
    at the end of the day, we certainly would do it.
        Mr. Rogers. If you do the second mailing and it delays you,
    as you say, 6 weeks, my information is 30 days, it will add
    time to the schedule, thus cutting into the time for
    statistical adjustment.
        Mr. Prewitt. I promise you that the decision about the
    targeted mailing is a decision about the quality of the
    nonresponse follow-up data. That is just the way we have
    calculated that.
        Mr. Rogers. Well, if you do the blanket mailing and you get
    some duplicates in, that can be handled by the computer, can it
    not?

                                Blanket mailing

        Mr. Prewitt. There are two things about the blanket
    mailing, one of which is the--and I don't know how we will
    handle it, and I am happy to have advice of this Committee--how
    we will handle the public anger, skepticism of 60 million
    households, to get a second form after they mailed it in. They
    are going to say this Census Bureau doesn't know what it is
    doing.
        Mr. Rogers. Listen, people get junk mail all the time. They
    will consider this junk mail, I guarantee it, whatever it looks
    like.
        Mr. Prewitt. That is very distressing to me. We have done
    everything we can to try to separate it. If the country decides
    this is junk mail and if the U.S. Congress decides this is junk
    mail, we are going to have a difficult time doing the census.
        Mr. Rogers. I don't consider it junk mail. None of us do,
    but a lot of people do. You are not going to offend very many
    people. Don't worry about offending people. Dismiss that for
    the moment.
        Mr. Prewitt. We had a dress rehearsal in which we tested
    this. We offended lots of people.
        Mr. Rogers. So what?
        Mr. Dixon. The argument shifts.
        Mr. Rogers. Why is that a bother to you?
        Mr. Prewitt. We just had a long conversation about the
    credibility of the Census Bureau, and now we are going to say
    to sort of roughly 100 million people in the United States that
    the Census Bureau can't even sort of record their response.
        Mr. Rogers. If it made them mad, it must have worked
    because you got an 8.2 percent increase in response rates in
    South Carolina, and 7.5 percent in Sacramento.
        Mr. Prewitt. Those aren't the people it made mad. It made
    all the people mad that already sent their form in. Just like
    it would make any of us mad if we constantly get asked for
    something we have already done.
        Mr. Rogers. Pardon me. What you are doing is not a PR
    thing. We are trying to count people. And it bothers me that
    what I am perceiving that you don't--you are not going to do
    the second mailing because it is going to eat into your
    statistical sampling adjustments procedure, and that bothers me
    because we are sacrificing an actual enumeration procedure
    which is a substantially good one in favor of trying to just
    simply guess; and in many blocks, as you told Mr. Miller,
    actually deleting people that you have actually counted.
        Mr. Prewitt. The decision to not do a targeted mailing or
    second mailing, blanket mailing, was made well before the
    Supreme Court decision, well before the Supreme Court decision.
    We had no idea what the outcome was. I understand this is your
    perception. I have to say it is an incorrect perception. That
    is a procedure which we have eliminated because it produces
    more error than it eliminates. Four million duplicate forms are
    extremely difficult to find, because one form says Joseph
    Smith; the other one says Joe Smith. You have got to figure out
    if that is the same person or not the same person. Sometimes
    they manage to put their child in who was at college. Sometimes
    they didn't. The forms are not going to be identical when they
    come in. Four million duplicate forms is very difficult to
    find. It simply is not a procedure that we decided to accept or
    reject based upon the A schedule. It is simply an incorrect
    perception, or else why wouldn't we have done it months ago?

                                  Address list

        Mr. Rogers. In 1990 the poor quality of the address list, I
    think we can agree, was a major cause of both cost and accuracy
    problems?
        Mr. Prewitt. Correct.
        Mr. Rogers. We spent $182 million to develop the list but
    still missed or miscounted, by most estimates, 5.5 million
    households. We sent enumerators to 13.4 million housing units
    that were either vacant or didn't exist, to the tune of $317
    million, 39 percent of the total spent on non-response follow-
    up. Improving that address list was to be a major success story
    for the 2000 Census and we invested enormous amounts of money
    in that, but it doesn't appear that that is going to be the
    major success story that we had thought.
        There have been major problems. In fact, we had to give you
    over $100 million in the last 2 years just to try to fix them.
    But now we are told that the best we can hope for is that it
    isn't any worse than 1990. Because of the expected poor quality
    of the address list last month, your own Census Advisory
    Committee recommended that you conduct a post-census local
    review program so that local communities wouldn't be penalized
    yet again in 2000 as they were in 1990 because of the problems
    with your address list. So why have you refused to implement
    that recommendation?
        Mr. Prewitt. Mr. Chairman, as I said earlier in my
    comments, the Census Bureau really does appreciate the support
    of the Congress with respect to reengineering the master
    address file, and I do think it is a success story. We have put
    together a much, much better address file than we had in 1990.
    We have block-canvassed every block in this country. We have
    had people out walking, trying to find those trailers behind
    the houses and so forth and so on.
        Now, one of the issues that was on the mind of the Advisory
    Committee was that the master address file has to be completed
    by midsummer in order to address all of the forms to get our
    mail labeling. What they said, that will miss new construction.
    So we have now worked hard with the Advisory Committee, and
    also based upon our dress rehearsal results, to make sure that
    we can get new construction in, up to and including April 7,
    2000. So that we had in place a procedure to do that called a
    ``postal casing check'' which we are doing with the Post
    Office, but the judgment of many people of the postal casing
    check was that the Post Office would not do that well. So we
    put in place a new construction procedure, and we believe that
    the address list that we will have when we actually go into the
    field on April 1 is absolutely as accurate as any agency could
    ever expect to get. We are talking about addresses that change
    every day. We are talking about houses being torn down, houses
    being built, conversions of old warehouses into residential
    units. We are talking about apartments that used to be two and
    now they are four. It is a constantly moving phenomenon. I am
    convinced that we will have a better address file by far than
    we had in 1990.

                        post-census local review program

        Mr. Rogers. Well, your advisory committee, as I say again,
    recommended that you include a post-census local review
    program. My perception is that you followed their
    recommendation on the new construction program but did not
    follow the recommendation on the post-census local review
    program because it would cut into your time that you need to do
    statistical adjustment. Can you dispute that?
        Mr. Prewitt. This is the exchange we had. The post-census
    local review, indeed I think the same advisory committee urged
    strongly that that not be the subject of legislation, and as I
    think Congressman Miller's staff must have reported to him.
        The reason for not doing the post-census local review in
    our judgment is that it does two things: One, it is a
    complicated difficult procedure. We may be dealing with as many
    as 20,000 different mayors in a space of 18 working days. That
    is 1,000 a day which are saying, Oh, we think there are more
    people here, and we do not know for certain how in the world we
    would be able to deal with that in that time frame.
        Now, the thing that we would be giving them in the post-
    census local review is exactly the same address list that we
    would have been giving them that we had ready on April 1. That
    is the one that we created with them. We put in place in
    response to our 1990 experience a very detailed local
    engagement with jurisdictions. Over 86 percent of the addresses
    of the United States have not been part of that program. I have
    a whole file here of all of the things that we are doing with
    that procedure. This is our address reengineering strategy. So
    it is not as if we did not hear the experience of 1990 and
    create a system that would give us the best address file, using
    the input of local jurisdictional leaders, mayors, county
    superintendents, tribal government chairmen and so forth.
        Now, if what we are going to give them is the same address
    list that we have already done, there is not much to be gained
    except a complicated procedure late in the census stage. The
    reasons for not doing it, I simply go back to what I said
    before. We decided not to do that prior to the Supreme Court
    decision. It has nothing to do with that--it was a decision--
    125,000 people added in 1990 and what everyone experienced,
    including the Director of the Census, Barbara Bryant, who
    testified before Mr. Miller's committee on the fact that it
    simply did not work very well, it wasn't a very effective
    procedure; put in place a better one. We have now put in place
    a better one with your support and it is support we very much
    appreciate.
        Mr. Rogers. Does anyone else have any questions they would
    like to bring up? Mr. Serrano, you are recognized.

                           clarification of comments

        Mr. Serrano. Thank you, Mr. Chairman. Mr. Chairman, I have
    a couple of questions. First, Mr. Chairman, however in the most
    diplomatic way I feel compelled just to make a brief comment on
    Mr. Kolbe's comments about my previous comments. I am sorry he
    is not here. Obviously he felt that my comments were not true.
    He must have not been, and I am pretty sure was not, involved
    in the maneuvering at that time.
        But, I think we need a historical perspective, Mr.
    Chairman, of what it was I was talking about. I was talking
    about a period of time when the meanness level on the House
    floor rose to an all-time high. It was the time when
    appropriation bills, if you recall, Mr. Chairman, would go to
    the floor and people would try to amend them, saying unless you
    could come up with a green card, you would not get any disaster
    aid during a flood or an earthquake. It was the highest moment
    for the U.S. English movement. It was the highest point for
    everything from trying to do away with congressional districts
    represented by African Americans to all kinds of other bashing
    on the House floor. And with that historical perspective in
    mind, I can understand why some people felt that the least
    thing we wanted to deal with was counting people who were
    precisely the people we were bashing. So that became part of
    that behavior at that time.
        With that in mind that, I bring it up. I have no doubt in
    my mind that some folks, who are no longer here, and maybe some
    who are still here want certain people counted because it is
    right against everything they were doing at that time.

                             census of puerto rico

        I do have, Dr. Prewitt, some issues to discuss with you
    too, very brief ones. One of the issues I have been working on
    many years now is to try to include the 4 million American
    citizens who live in Puerto Rico in our census count. I realize
    that the constitutional mandate is to count people within the
    States and that is clear. But the Constitution did not
    envision, when it was written, American citizens living in
    territories or in places other than States. I think it is
    proper, not only for this discussion but for other discussions,
    to maybe revisit and reanalyze and reinterpret what the
    Constitution says.
        Now, I understand that the census this time will include a
    count from Puerto Rico. I would like you to tell me what the
    count will look like in terms of what it will be used for, how
    it will appear, and will those figures be used for any national
    figures? For instance, the most important national figure for
    me is when the census says there are whatever, 25, 30 million
    Hispanics in this country, will there be an asterisk for the
    other 4 million or will that 4 million be added to the 25 or
    whatever? When the census says Americans own 1.3 TV sets per
    household, it is probably 7.9 but--you know, 9.3 pairs of
    shoes, whatever, will that include the figures from Puerto
    Rico? What will those figures be used for and how far can you
    take them?
        Mr. Prewitt. Congressman Serrano, the good news about 2000,
    it is the first census where the form, the census form is
    identical in Puerto Rico and the mainland. That is extremely
    important because when you are tabulating data, if you have got
    a different form for Puerto Rico or for the islands than you
    have for the 50 States plus the district, it is very, very
    difficult to kind of coordinate those in a way that you can
    tabulate them in the way that you are suggesting. So the most
    important thing to say is the 2000 Census in Puerto Rico will
    be conducted with exactly the same form.
        Now, with respect to tabulation. We will be tabulating on
    most of--we are tabulating lots and lots of different ways for
    different kinds of purposes, of course, but the core
    tabulations will have 50 States, the District, Puerto Rico;
    that is, anyone who wants to see the Puerto Rico count as part
    of the larger count, it will be there for most of the
    tabulation purposes.
        Now, when you ask the question how many television sets are
    there per household, that data would be available--see, that
    would be the decision of the statistical agency, not the
    Bureau. We will provide those data in such a way that if they
    want to incorporate Puerto Rico into it, they can. And many,
    many statistical agencies will do so.
        When you ask the rather specific question of whether the
    actual count of Hispanics in the United States after the year
    2000, when we are reporting that data for the 50 States, it
    will exclude Puerto Rico. It just has to, because that is what
    we are obligated to do. It will take a change in the law to
    allow us to change that. But for other purposes where we are
    simply saying, for example, how many Hispanic citizens are
    there, we then could include Puerto Rico into that count. So it
    simply depends on the terms of the tabulation and they will
    differ from one purpose to another as they do now.
        Mr. Serrano. Now, in the past, they conducted their own
    census?
        Mr. Prewitt. We did it for them, but with the census form
    that they preferred to use that was different from the standard
    form, but we conducted it.
        Mr. Serrano. Are they the same employees and the same
    folks?
        Mr. Prewitt. Yes, all the same procedures will be used in
    Puerto Rico as in the other States.
        Mr. Serrano. So you are clear on that, then, the law tells
    you to count only if the question was how many Hispanic--how
    many American citizens of Hispanic origin are out there, then
    you can----
        Mr. Prewitt. That would be legitimate.

                              IMMIGRATION CONCERNS

        Mr. Serrano. One last point, Dr. Prewitt, and I thank you
    for your testimony today and for sitting and watching some
    other dialogue, started by me. In the 1980 census, people like
    myself almost got a heart attack when the Catholic Church--and
    I will say my church so no one thinks I am attacking the
    church--said we can't guarantee that Immigration will not come
    looking for people who are here undocumented, and get counted
    in the census, and that became an incredible issue. Let me
    preface my comments by saying that illegal immigration is an
    issue that we are all concerned about and no one is in favor of
    illegal immigration. But your job is to count whoever is here,
    not to get into the issue of whether they are here legally or
    not.
        Have there been any conversations with the Immigration
    Department? Is there anything you can tell me that you hear?
    Are you going to do a good job and count people and then get
    them raided by the Immigration Department because you did such
    a good job? What are we talking about here? Has there been any
    conversation taking place around this issue?
        Mr. Prewitt. Yes, there have in two or three different
    respects. I will be quick. The Census Bureau takes
    confidentiality very, very important. It is as important as
    accuracy because if we ever lost our pledge of confidentiality
    to the American public, the census would actually begin to get
    into serious trouble. We understand that. We go to jail before
    we release any confidential information. So the commitment that
    we have to confidentiality is absolute and strong.
        However, making people believe that is a different task.
    And so first with respect to the INS issue, we obviously have
    made representations to INS and other people who have done this
    on our behalf, urging INS to suspend any raids during the
    census period. So there is no kind of confusion. We have reason
    to believe that will happen.
        Secondly, we have worked with GSA who is finding all of our
    office space. We will have to open up nearly 500 local offices
    or site more than 500 local offices, and we have asked even if
    we are in a Federal building never to be on the same floor,
    never to be adjacent to, to be separate as from IRS and INS as
    possible for exactly these reasons. And that happens, you know.
    GSA has got its problems.
        Mr. Serrano. The wish of many Members of Congress, too.
        Mr. Prewitt. Mr. Kolbe has left. I had a very unfortunate
    experience in Tucson which I do have to report. I went to
    Tucson for a town meeting. I was making a very strong
    confidentiality pitch and then from the audience someone stood
    up and said, Dr. Prewitt, are you aware that you just opened
    the local office here in Tucson? I said, Yes we are aware. We
    are very proud and so forth and so on. They said, Do you know
    that it was in a space that was just vacated by the INS and
    that they have given you the same phone numbers that INS had?
    We were out of there in 24 hours. So we feel very strongly
    about that.
        Now, to the question of how can we get aliens who we are
    obligated constitutionally to count to cooperate, we have as
    part of our partnership program worked very closely with the
    Catholic Church. We know that if a Catholic church or the
    schoolteacher or the local community leaders say yes, you can
    trust this, it is important, then it will help. We can't make
    people believe it very easily.
        We are, finally, a Federal bureaucracy. So we are doing
    everything we can to work with the kinds of organizations which
    can convince those parts of our population that these data will
    be confidential. And we are reasonably confident that there is
    going to be a lot of help on that score.
        Mr. Serrano. Just one last point then. I intend, in the
    most undercounted district in the Nation, to play a role in two
    languages, if I don't pick up a third soon, to get people to be
    counted. From your viewpoint now, I am not asking for a
    commitment because you can't give me that commitment--you think
    I would be pretty safe in telling people you are not going to
    run into any other problems related to the census or during the
    census count? That is another issue. You will deal with that
    issue tomorrow or next Wednesday. However, during the census
    count, during this important--I can assure you that you are
    standing up and being counted is not going to cause you other
    problems?
        Mr. Prewitt. I can just repeat that we will go to jail
    first before we will do anything that will jeopardize any
    citizen or non-citizen because of their response to the census
    form. It is important to remember that we don't ask citizen and
    non-citizen. We don't ask status. We don't even know what kind
    of documentation anyone has. It is not part of the census
    record.
        Mr. Serrano. Thank you, Dr. Prewitt.

                         POLITICAL ASPECT OF THE CENSUS

        Mr. Dixon. Thank you, Mr. Chairman. I will try to be brief.
    I want to thank you for your, what I think, fine testimony and
    good responses to the questions here. But I also want to say
    that I don't think that you are personally sensitive enough to
    what is going on here. I would liken it to a medical physician
    and a science practitioner trying to talk about a method of
    treating a patient. You are coming with a scientific background
    and trying to demonstrate an appropriate way to conduct a
    census. We are politicians. For you it is a scientific
    endeavor. For us it is a political endeavor. And I think,
    Doctor, you have to understand that on both sides of the aisle.
        There have been references to the White House. I have a
    document that I could relate to or make reference to from Jim
    Nicholson that clearly spells out that it is a political issue
    for Republicans. All of us understand that. It is their job to
    attack your credibility and you must understand that, too.
    Snake oil. They are predisposed to what would happen on the
    enumeration issue and the Constitution and the Supreme Court. I
    personally would guess that Dr. Miller is torn between his
    science and his politics. So he is not going to agree with you.
    You cannot appeal to him on the professional level, in my
    opinion, because we are going to treat this as a political
    issue and you have got to get that.
        Now, I say all that to say that in my view, I think that
    you should keep the lowest profile possible. Don't give them or
    me any target to shoot at. And that was a preamble to the fact
    that you don't have a dollar amount. Anything that they can
    beat up on to attack your credibility are arrows in their
    armor. And so when you say that you are going to have a number
    next spring--you give them ammunition. So my question to you is
    with all of the science that you have at your disposal, I know
    that you want to be as accurate as possible. Can you be more
    specific? Don't give them opportunities to attack your
    credibility. And I say that with respect because we all would
    agree, if we were to take a lie detector test, this is
    political on both sides. This is political. This has got
    nothing to do with the best count. The Chairman of the
    Republican Party says this is about adding 4\1/2\ million
    Democrats. It is a reasonable assumption that Latinos and
    African Americans will be Democrats, but they say at stake here
    is their GOP majority in the House of Representatives as well
    as partisan control of State legislatures nationwide.
        So you have got to keep to your science and keep your head
    down, and don't delay about this number. Since you were
    appointed by a Democratic administration, it is a war and they
    have to attack you. So don't give them more to attack you with.
        Now, can you state or can you provide a letter to the
    committee at some reasonable time as to when we might have a
    number? At least give us a month; you know, spring is a long
    time. Now, I personally am on your side because I think the
    science supports you. However, I am here to say that, 10 years
    from now, some other Democrat may be taking the other side. I
    just want you to realize that for you it is science; for us it
    is politics.
        Mr. Prewitt. Thank you, Congressman.
        Mr. Rogers. Go ahead and answer the question.
        Mr. Prewitt. I heard a slight inflection in his voice at
    the very end.
        Mr. Serrano. He has a way with words.

                          TIMEFRAME OF THE CENSUS PLAN

        Mr. Prewitt. The particular question has to do with whether
    we can provide you, this committee----
        Mr. Dixon. A more narrow----
        Mr. Prewitt [continuing]. A better timeframe. And I think
    we can do that. As I would go back to what I said to Chairman
    Rogers, we really want that number to be the last number that
    we have to talk to you about.
        Mr. Dixon. I understand.
        Mr. Prewitt. We want to scrub and scrub and say this is it.
    This is where we are going to be and that is part of the thing
    that makes it difficult to give you a precise date.
        I think that----
        Mr. Dixon. Doctor, you are very precise. I wasn't asking
    for precise.
        Mr. Prewitt. I appreciate that. No, I think I understand,
    and I will do everything I can to be responsive to your
    request, which is a letter to this committee specifying the
    more specific time frame within which we can provide----
        Mr. Dixon. The month, the month.
        Mr. Prewitt. The budget numbers.
        Mr. Serrano. Pick a month of 31 days.
        Mr. Prewitt. With respect to your other comment, if I may
    respond quickly, the----
        Mr. Dixon. And one of the things I noticed here--it is not
    offensive, but it just isn't in the real world when you say,
    ``while availability of revised estimates of the schedule may
    not be ideal for the appropriation process.'' This is the game,
    you know, but you kind of discard it. Well, maybe it isn't to
    your convenience, but we want to be precise. The game is up
    here and on the floor and in the Senate.
        Mr. Prewitt. That is very useful. I appreciate the comment.
    And I, as I did say earlier in response to the Chairman's
    comments, that we also don't want to put the committee in the
    awkward position of working with a number, and then we then
    have to come back a few weeks later and say we hadn't finished
    all of our work, it is not the right number. It could be up or
    it could be down.
        So I seriously appreciate when Chairman Rogers asked
    earlier whether I was bothered--I am bothered by the fact that
    we cannot give you an accurate number today, but I would be
    more bothered to give you an inaccurate number and then later
    to give you an accurate number. That would bother me more
    seriously. So that is what we are trying to do.
        Mr. Dixon. But Doctor, the longer you delay the number, the
    louder the volume on this.
        Mr. Prewitt. Correct.
        Mr. Dixon. Do you need more people to get the number, more
    supercomputers? I understand its not like baking a cake, it is
    going to take more than 3 hours. Are you applying enough
    manpower and technology to this problem to get the number?
    Because the longer you delay, the more we are going to take
    that and exploit it. You don't have to respond.
        Mr. Prewitt. Let the record show that I heard the
    statement.
        Mr. Miller. Mr. Chairman, could I make one comment?
        Mr. Rogers. Very briefly.
        Mr. Miller. I just want to respond to one thing that Mr.
    Dixon was saying and that is the science versus the politics.
    There is no question there is a lot of politics. But on the
    science issue, you can make the argument that the large
    aggregated level as State level, sampling can be effective. But
    when you get to census block, I think there is a real division.
    When you are only talking about 50 people on a block and there
    are 6 or 7 million blocks, there is a legitimate debate by
    scientists, by statisticians, that this is not the most
    accurate data. And when you do redistricting, as you know, you
    work with census blocks. So I think we can talk about politics,
    there is for question on both sides, but there is legitimate
    debate for redistricting purposes. Block data has a serious
    problem.
        Thank you, Mr. Chairman.
        Mr. Rogers. Dr. Prewitt, we thank you for your testimony
    and your fortitude in sitting there in the face of this. You
    have a hot potato here. That may be news to you, but the thing
    that I want--and this is not politics. We are in the process of
    putting together a bill to fund all of these agencies for the
    year 2000, not to mention dealing with the June 15th, 1999
    date, and we simply can't operate until we have a number to
    plug in. The full Committee can't divide up the big pie to the
    Subcommittees, not knowing what we are dealing with here,
    because this can be up to a $5 billion item we are talking
    about here. And as they say in the Bronx, that ain't hay.
        Mr. Prewitt. Even in eastern Connecticut, or Kentucky.
        Mr. Serrano. Next time we say ``hay'' in the Bronx, I will
    call you up.
        Mr. Rogers. So we are looking for a number, and the sooner
    the better. And as I say, whether some people take that as
    politics or not, if the Supreme Court had refused to give us a
    number about their budget, I would be screaming at them just as
    I am screaming at you. I don't care who it is. If you are not
    giving us the numbers so that we can do our job, I am going to
    scream at you. And whether you call that politics or whatever,
    it doesn't matter to me. I want your numbers. And I think the
    Census Bureau has been lax in this, and it raises suspicions.
        You have got to understand where this side is coming from,
    as I indicated a moment ago. We don't trust this Administration
    to do things--we think they are political in everything,
    because we have been burned too many times now, in matters
    unrelated to the census. And where they are asking for
    discretion in matters that we consider as important as an
    accurate census, we are suspicious. It doesn't mean it is so,
    it just means we are suspicious and looking for evidence that
    there is manipulation.
        That is sort of what is motivating all of this. We have
    been burned before on things like the INS with Citizenship USA,
    and a number of other things. So we are suspicious and we are
    looking for evidence that this is being manipulated as they
    manipulated citizenship in the United States of America. So
    that is where we are coming from, Mr. Dixon.
        Mr. Dixon. Oh, I understand that.
        Mr. Rogers. So when you say I can't give you a figure at
    this late date, and the Secretary of Commerce has told me the
    same, not because you didn't have it, but because on high they
    had told him that he couldn't release it, that raises some
    hackles, raises some suspicions. And so we are suspicious. And
    until you bring us the number immediately so that we can do our
    work, as everyone else has, we are going to remain suspicious.
        I don't mean to impugn your integrity. I don't think your
    integrity is in question here. I don't think anyone would do
    that.
        Mr. Dixon. No, Mr. Chairman.
        Mr. Rogers. But I am nervous about the possibilities of
    manipulation of this census that all of us, I think, are
    determined not to let happen; on both sides, I think.
        Mr. Dixon. Right. I did not use the word ``integrity,'' nor
    do I suggest that anybody's integrity is questioned. But it is
    clear, as the Chairman says, that your credibility as at issue
    here, and I just want you to get that.
        Mr. Rogers. Well, thank you very much for your testimony,
    and we will look forward to talking with you again soon.
        The hearing is adjourned.

                  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                              Thursday, April 15, 1999.

                NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION

                                   WITNESSES

    DR. D. JAMES BAKER, UNDER SECRETARY FOR OCEANS AND ATMOSPHERE
    SCOTT B. GUDES, DEPUTY UNDER SECRETARY
    PAUL F. ROBERTS, CHIEF FINANCIAL OFFICER/CHIEF ADMINISTRATIVE OFFICER

                                Opening Remarks

        Mr. Rogers. The committee will be in order.
        We are pleased to welcome you to our final hearing--out of
    23 hearings, this is the last one of this fiscal year. We are
    pleased to welcome Dr. James Baker, the Under Secretary for
    Oceans and Atmosphere in the Department of Commerce, and his
    associates. He is appearing on behalf of the programs in the
    2000 budget request of the National Oceanic and Atmospheric
    Administration, a small agency buried in the Department of
    Commerce. They only have about 60 percent of the entire budget.
        This year the NOAA budget request presents a very ambitious
    agenda, proposing a total funding level of $2.5 billion, an
    increase of $280 million over fiscal year 1999, as well as
    advance appropriations totaling $5.4 billion extending through
    the year 2018.
        They say that timing is everything, and, Dr. Baker, your
    timing is such that you are presenting one of your most
    ambitious budgets ever at a time when the annual spending caps
    are at their tightest ever. So the job ahead of us, you and us,
    is to tailor the needs that you will be speaking on to the
    budget realities that we are facing. It would be helpful if we
    had your assistance and that budget scrutiny that we will have
    to engage to try to fit an oversize foot into an undersize
    shoe.
        Let me say before I introduce you to present your testimony
    that we have been joined on the subcommittee by a new member of
    the subcommittee, Jose Serrano, who is new to the subcommittee
    and is new ranking member of the subcommittee. And I have told
    him privately--I have not said it publicly--that it is a
    daunting task that he has undertaken because this subcommittee
    covers such a broad spectrum with a lot of intricate programs
    and hundreds of agencies, literally, in three Departments of
    the Government and all of the Federal courts, as well as a
    great host of independent agencies like FCC and SEC and FTC--
    ABC and CBS. And he has handled himself very well. He has
    studied. He has attended every hearing, and he has had probing
    questions of all the witnesses that we have had here. You will
    see during the course of the hearing that he will be equally as
    probing on your agency.
        So, Mr. Serrano, let me thank you for the work you are
    doing to quickly get up to speed on a very complicated agenda.
        Mr. Serrano. I thank you, Mr. Chairman, for those kind
    words. I must tell you that the staff that you always see
    behind me, to my left, in my office, and staff in the committee
    and the support I have gotten from your staff and the 10,000
    binders that were given to me in the last month or so have made
    it possible, and I thank you for the opportunity to have been
    an equal partner. And I look forward, as we continue to put
    this bill together, to the kind of a situation where,
    notwithstanding that one issue that divides this House, on
    everything else we will have a very joyous occasion on the
    House floor.
        Let me say that I want to welcome Dr. Baker, and in line
    with what you just said, Mr. Chairman, I was amazed at the
    multitude of responsibilities that NOAA covers, and I will
    comment on that later. But I am looking forward to your
    testimony and looking forward to joining the chairman in making
    sure that you continue to do the work that you have to do.
        Mr. Rogers. Dr. Baker, we will make your written statement
    a part of the record, and if you would like to summarize it
    briefly, we would be pleased to hear from you.
        Dr. Baker. Yes, sir. Thank you.

                                    overview

        As you said, we have a large increase proposed this year, a
    12.5 percent increase. We believe that the budget that we have
    laid on the table demonstrates our commitment to meeting our
    responsibilities for investing in and maintaining the
    infrastructure for the services that we deliver to the public.
        This request addresses increased data acquisitions needs
    through the replacement of a fishing research vessel and
    increased days at sea with the University-National
    Oceanographic Laboratory System; provides for increased
    supercomputing capacity requirements for better weather and
    climate modeling; recurring costs for replacing facilities;
    pay-related and inflationary cost increases; replacement of
    outdated observing systems; and providing a broader and more
    diverse pool of potential employees by establishing educational
    training relationships through a joint partnership with a
    consortium of Historically Black Colleges and Universities.
        As we have discussed, Mr. Chairman, the NOAA budget is
    predicated on the need to ensure continued delivery of
    essential science, technology, and services to the Nation. We
    have a number of departmental, interagency, congressional, and
    Presidential initiatives that we are addressing, including the
    Lands Legacy Initiative, an Oceans 2000 activity, the Natural
    Disaster Reduction Initiative, and the Climate in the 21st
    Century Initiative.
        Let me just say a word or two about each of those.
        On the ocean and coastal side, we recognize that one-third
    of the United States GDP and one-half of the Nation's jobs are
    produced in the coastal zone. This initiative that we have will
    increase the protection, restoration, and sustainable use of
    the Nation's ocean and coastal resources.
        In terms of Lands Legacy, we recognize that economic and
    environmental well-being that we derive from natural resources
    are essential to make these diverse areas valuable to the
    Nation. We recognize escalating losses and degradation of
    coastal wetlands, fisheries habitat, and coral reef ecosystems
    are issues that we have to address.
        We have identified $105 million of new funding for targeted
    investments to expand protection of ocean and coastal areas,
    restore habitat, provide states and coastal communities with
    the tools and resources for economically sustainable smart
    growth as outlined in this Lands Legacy Initiative.
        In terms of the ocean side, we had last year, 1998, the
    Year of the Ocean, and we have in our budget $78 million in new
    funding to promote better navigation, providing that
    information out to marine transport, better understand the role
    of oceans in shaping weather and climate, provide for increased
    fisheries data collection capacity, stock assessments, and
    fishery conservation, and developing a commercially viable
    domestic marine aquaculture industry.
        We are also involved in resource protection under our
    responsibilities under the Marine Mammal Protection Act and the
    Endangered Species Act, an area that is growing for us. We are
    committed to preventing extinction of marine species that are
    at risk and in restoring their habitat and ecosystems through
    greater public involvement in conservation planning, creating
    incentives for landowners and states to protect species and
    their habitat, and entering into long-term conservation plans
    with landowners. We think this is one of the real successes we
    have had in the last couple of years, developing joint plans
    with the private sector and with private landowners to find
    ways to protect endangered species.
        We have in this budget $130 million aimed at endangered
    species, including $100 million for a Pacific Coastal Salmon
    Recovery account that will bolster salmon recovery through
    improving Federal conservation activities and building state,
    local, and tribal partnerships to share the limited resources
    that we have while improving the scientific information that we
    need to recover the salmon.
        We will also aim these funds at leatherback and loggerhead
    turtles, Hawaiian monk seals, and North Atlantic right whales,
    all of which are under our jurisdiction.
        We continue to address issues in South Florida as we have
    $5.1 million to address the South Florida Everglades
    restoration effort, and we already have some very good
    accomplishments in that area as the State of Florida begins to
    replumb so that freshwater once again flows through the
    Everglades.
        We have $22 million to support the administration's Clean
    Water Initiative, addressing general issues of both point
    source and nonpoint source pollution, and also looking at
    issues of harmful algal blooms, which today we estimate are
    causing something like $1 billion a year in economic losses.
        On the atmospheric side, we continue to push for our
    Natural Disaster Reduction Initiative. We request a net
    increase of $42 million for that Natural Disaster Reduction
    Initiative. The next stage, working with the Economic
    Development Administration, the National Institute of Standards
    and Technology, with the United States Geological Survey, and
    with FEMA for an end-to-end strategy of better building
    standards, better forecasts, and better delivery of information
    when we have natural disasters.
        We include in this the completion of the modernization of
    the Weather Service, and I am pleased to say that we will have
    the final deployment of our Advanced Weather Interactive
    Processing System by the end of June of this year, thus
    completing the modernization of the Weather Service once we
    have finished the closure of the offices.
        We have, just one example, doubled the warning time for
    tornadoes from 1993 to 1998. This will allow us to continue the
    very effective activities that we have in the Weather Service.
        We have a variety of other activities on the weather side
    that will provide us some new capabilities there. We can talk
    about those in more detail.
        Then, finally, on Climate in the 21st Century, we recognize
    that we have been very successful in forecasting not just
    short-term weather but the El Nino and somewhat longer term
    climate. We are looking at ways that we can do a better job of
    extending our weather forecasts so that farmers, public power
    utilities, and the private sector will have this ability to get
    new information. Right now weather information is being used by
    the public and by the private sector. There is a whole new area
    of weather derivatives on Wall Street that is a $2.5 billion
    market. That builds on the information that is developed from
    our scientific agency, and it is important that we do the best
    job of providing that.
        We are also looking to do a better job of observing and
    monitoring both the ocean and the land as we try to provide the
    best scientific understanding for the changes that are taking
    place in the long term on the planet.
        In conclusion, Mr. Chairman, I want to say that our 2000
    budget builds on the progress we have made with the assistance
    of this committee and support from the Congress over the years.
    We believe that our environmental stewardship and assessment
    methods are essential to the Nation's economic health. We are
    trying to focus our efforts on what matters to the American
    people. We have many partnerships in place, and we hope we can
    develop those further.
        Thank you for the opportunity to be here, and we would be
    happy to answer questions and discuss any of these things
    further.
        [The information follows:]

                  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Rogers. Thank you, Dr. Baker.
        We have a little bit of a scheduling problem. Chairman
    Regula has a hearing waiting on him in his own subcommittee,
    and by unanimous consent, I would hope we would let him have a
    few minutes here at the outset so he can go back to his regular
    chores.
        Mr. Regula.
        Mr. Regula. Thank you very much. Thank you.

                             jason project funding

        Dr. Baker, just a couple of questions. I understand you had
    asked OMB in your request to put JASON funding in and that was
    rejected. Do you have any idea why?
        Dr. Baker. I am sorry to say I don't know why, and I am
    also sorry to say they didn't include that funding because we
    think it is a very important part of what we do. We welcomed
    the congressional help last year, and we continue to try to
    make it work.
        Mr. Regula. I have had some experience with it with our
    local high schools, and it is a very good project.
        Dr. Baker. We would like to see that effort expanded.
        Mr. Regula. Very good. Thank you.

                            lands legacy initiative

        I am a little confused on the Lands Legacy because that
    gets into the Interior Subcommittee jurisdiction. I notice that
    you would be getting some money for dredging and restoration,
    coastal zone management, marine sanctuaries, et cetera.
        If that is accomplished, you will acquire new lands. Who
    manages those new lands? Normally they would fall under the
    Department of Interior. If you have funding to do this, do you
    become the player in the coastal zone management as opposed to
    Interior?
        Dr. Baker. Yes, sir. I think there are two aspects of the
    Lands Legacy program. One is there is a set of issues that we
    thought were critical issues that have to be addressed, for
    example, providing additional assistance in the management of
    our marine sanctuaries. We have 12 marine sanctuaries. They are
    very thinly covered in terms of management. We are looking to
    do a better job. This is something that each of the states has
    asked us to do, and $15 million, for example, in that fund is--
    --
        Mr. Regula. That comes out of land and water conservation
    funds.
        Dr. Baker. Yes, sir.
        Mr. Regula. Which normally is within the Interior
    Department's jurisdiction.
        Dr. Baker. The other piece of this is the President and OMB
    decided how they would fund this activity, and it was their
    decision that they thought that monies from receipts from the
    Outer Continental Shelf Lands Act, which is a Land and Water
    Conservation Fund, would be an appropriate funding mechanism
    for that. It is my understanding that as OMB has looked at
    that, it was their view that this would be an appropriate
    funding mechanism for NOAA to operate, although that had not
    been the case in the past. It had been strictly Interior and
    Agriculture through the Forest Service.
        I think our view has been these are important programs to
    get done. We think that they should be funded or we should
    negotiate what the numbers are to be funded. We are not wedded
    to that fund for doing the job. We think it is important to do
    it, but as we understand it from OMB, they think this is an
    appropriate way to fund it.
        Mr. Regula. Well, I understand from OMB there isn't really
    any money there. It is one of those bookkeeping transactions.
    It looks like there is money, but it is not there. It is being
    used for a lot of other things. They probably saw this as an
    opportunity to fund your activities in the marine area. So I
    guess we will have to resolve this issue.

                            protected marine species

        The other question I have--and I don't know quite where the
    disconnect is--the United States Geological Service (USGS)
    budget has a decrease of $3.5 million in habitat protection,
    and at the same time you get a $2.6 million increase in
    protected species baseline funding.
        I don't know if there is a rationale for that. Why drop
    USGS--and they have primary responsibility--and yet give you
    additional money?
        Dr. Baker. If this is the protected species area----
        Mr. Regula. Yes, it is.
        Dr. Baker. We have a different responsibility from the USGS
    in that we protect marine species. We have a different set of
    species that we protect. I cannot speak to why the USGS funding
    declined, but----
        Mr. Regula. So you are saying that it is totally two
    different sets of species.
        Dr. Baker. In terms of protected species. Yes, we separate
    out those. They do a certain set. We do primarily marine. They
    do a couple of species, do both marine and freshwater, but our
    job is protecting marine species, only saltwater.
        Mr. Regula. As far as you know, there is no overlap then?
        Dr. Baker. There is no overlap in the species that we
    protect, yes, sir.
        Mr. Regula. Okay. Thank you.
        Thank you, Mr. Chairman.
        Mr. Rogers. Would the gentleman yield?
        Mr. Regula. Yes.

                        land and water conservation fund

        Mr. Rogers. Does the gentleman consider that the Interior
    Appropriations Subcommittee has exclusive jurisdiction over the
    land and water conservation fund?
        Mr. Regula. I am not sure. I suspect it does, but I would
    have to go check the statute that created it. Historically, it
    has always been an area of responsibility in the Department of
    Interior, but I don't know--you probably are not certain
    either--what the statutory authority provides.
        Dr. Baker. Certainly that has been the case in the past.
    There is no question about that. And this would be a new use.
    In our reading of it, it seems to be broader than just those
    two agencies, but I think that is something that has to be
    worked out.
        Mr. Regula. We will check that, Mr. Chairman. Thank you.

                       national estuarine reserve system

        Mr. Gudes. You had asked who controls the property. In the
    Estuarine Reserve System, it is actually state property. It is
    run by the states. It helps support the states in operating
    properties.
        Mr. Regula. So you are responding to a state request.
        Mr. Gudes. Correct, the National Estuarine Reserve System
    is operated by the states. NOAA assists them, and actually it
    is an area where the Congress has been providing funding to
    increase buffer properties last year, and that is part of the
    purpose of what the money would be used for.
        Mr. Regula. In other words, this is a response to states
    asking you to take additional responsibilities.
        Mr. Gudes. Part of the initiative is.
        Dr. Baker. Yes. Requests for both marine sanctuaries and
    estuarine research reserves come from local communities who
    say: ``these are things that we would like to do.'' How can we
    do it within Federal guidelines? Then they make a proposal
    which we work with them on.
        Mr. Regula. Do states provide any of the money themselves
    for this work?
        Dr. Baker. Yes. In the case of National Estuarine Research
    Reserve, yes, half the funding comes from the states, and much
    of the staffing comes from states and state agencies.
        Mr. Regula. Thank you.

                          overall noaa budget request

        Mr. Rogers. Thank you for being here, Mr. Chairman.
        Now, let me talk to you briefly about the overall macro-
    budget proposal. You are proposing about a $400 million
    increase, offset by about $120 million in decreases, mostly in
    programs supported by Members of Congress, as well as some
    supported by NOAA. That is a 13 percent increase, which is one
    of the largest increases in any agency's budget that we
    consider, at a time when the budget caps from 3 years ago are
    biting us the worst ever. We will have actually fewer dollars
    to spend this year than last year. So in order to get that kind
    of an increase, we would have to slash a lot of other people to
    find the money.
        CBO determined that the President's overall budget request
    was $30 billion above the spending caps that are in place for
    the fiscal year. So the subcommittees here will have to produce
    bills that live within those caps. We don't have the luxury of
    abandoning them unless the Congress determines that that is so.
        Within the Commerce Department, the original request for
    the 2000 census included a $1.7 billion increase. We don't have
    their revised request, but it is going to be substantially
    higher than that. So what we need from you most, I think, is
    your help in fitting your budget request into the realities
    that we have to live with.
        The first thing we need is for you to tell us which of the
    increases that you are requesting are absolutely required to
    allow NOAA to carry on its most vital life and safety functions
    in fiscal year 2000. Which and how much of your increases are
    ``must do''?
        The second thing we are going to need is for you to
    prioritize your requested increases, take all of your increases
    and rank them in some priority order. You know, I would rather
    you do that than you make us do that. I think it would be
    better for the taxpayers if you, the experts, tell us which are
    more important than the others.
        Can you help us with that?
        Dr. Baker. Yes, sir. We do a strict study of priorities
    within our own agency, and we are prepared to sit with you and
    your staff and outline the things along the lines that you
    talked about.
        Mr. Rogers. I am sure everything you have asked for is good
    and legitimate and nice, and maybe in years when we have more
    money to deal with, we would be able to talk about them. But
    this year is not one of those years. It is going to be a real
    tough year to find the money to do what has to be done.

                                 fee proposals

        Now, you are proposing in your request the enactment of $20
    million in fisheries fees and $14 million in navigation fees.
    Those are legislative proposals over which we have no
    jurisdiction and have not been even transmitted to the Congress
    yet. And if the past is any guide, they are unlikely to be
    enacted. And that would leave a $34 million hole in your
    request.
        Which of the proposed increases should we take off the
    table to make up for that $34 million hole that I am sure will
    be there?
        Dr. Baker. Mr. Chairman, I recognize and fully understand
    the issues with respect to fees, and I have had a very similar
    conversation with the Office of Management and Budget who every
    year, well, not only encourages this but pushes very hard to
    have such fees added, even though Congress has dictated to us--
    they have made it very clear to us that certain fees are not
    acceptable to the Congress.
        I think this is an issue that we need to resolve so that we
    don't have to come back continually with this discussion. I
    agree with you in two ways. Number one, we very likely will
    have a hole in the budget, and, number two, we don't have
    agreement on the fee issue.
        I would like to find a process whereby we could see whether
    there are, in fact, some fees that could be added to the NOAA
    budget and that we could get agreement with the commercial
    sector, with the public, with the Congress, about how that
    could be done, and then see if there is some way we can get
    agreement on all sides that we will not come back and ask for
    fees which Congress has continually told us are not going to
    happen.
        I have seen legislation on the navigation fees. We have had
    the discussion on fish fees. The administration view continues
    to be that there are certain services where a smaller amount of
    the public benefits, and so they should pay fees for this.
    There are such fees in other parts of the Government. But
    unless we find a better process to deal with it, we will not be
    able to solve that problem, and we still have a hole in the
    budget.
        As I said, we are certainly willing to sit with you and
    work out how we can fill these holes which are likely to be
    there.
        Mr. Rogers. I don't think you have proposed these fees to
    OMB, did you?
        Dr. Baker. No, sir.
        Mr. Rogers. This is OMB's idea, these fees?
        Dr. Baker. It is OMB's idea, but it is an administration
    viewpoint that there are certain functions of the Government
    where the fees should be charged, and they look broadly across
    and add those to the budgets that come forward, and that is
    what we see. But as I said, we have been getting congressional
    direction now ever since I have been administrator that if we
    simply lay on the table fisheries fees, this is not going to
    work. And I would like--hopefully maybe next year I would ask
    OMB to have this discussion. We talked about it in the
    Department of Commerce. I hope next year we can come back and
    say we are trying to address this in a more sensible way.
        Mr. Rogers. As I have said in other hearings, I think we
    are going to have to bring OMB up here and sit them down beside
    you when you testify so that--I mean, it really irks me that we
    have you and other Department heads and agency heads that have
    to march up here and defend a budget you did not submit--that
    OMB thrust upon them. And they are not here to explain why they
    are doing these things. Some people down there are fresh out of
    college, perhaps, at OMB and don't understand the realities of
    life or the proper role of the executive and legislative
    branches. I think some of them need to go back to school.
        So next year, I think one way to solve this dilemma is for
    them to be here and face the music, like you have to, defending
    a budget that somebody else wrote. And it is unrealistic.
        Any thoughts about that?
        Dr. Baker. Somehow the fee issue has got to get addressed,
    I agree. And I think you need to get the parties to the table
    to discuss it. There are fees that are collected for entry into
    National Parks and so on. As we have gone back and tried to
    look at fees in NOAA, we have not come up with good proposals.
    That is not to say that we could not, but I think we have to
    have a better process.
        Mr. Rogers. Well, just go back and tell those people at OMB
    that gave you this fake budget that next year they are going to
    be here sitting beside you. Would you convey that to them?
        Dr. Baker. I would be happy to.
        Mr. Rogers. And tell me what they say. [Laughter.]

                              proposed rescission

        Now, the same thing is true of the $3.4 million rescission
    proposed out of prior year emergencies, which does not score as
    an offset against discretionary appropriations. We have got to
    fill that hole as well, while we are at it.
        Dr. Baker. Can you comment on that, Scott?
        Mr. Gudes. Mr. Chairman, the issue is that I think two
    years ago the Appropriations Committee did a reprogramming of
    balances in what we have called the pipeline. And these are the
    balances that were left over after the Congress redirected the
    funding.
        Mr. Rogers. No. These are 1992 emergency funds. But,
    anyway, we will talk----
        Mr. Gudes. I am sorry, sir. I don't know the answer to
    that.
        [Clerk's note.]--Subsequent to the hearing, the following
    information was provided:]

        The $3.4 million is the remainder of emergency supplemental
    funds provided for a grant to the Louisiana Department of
    Wildlife and Fisheries for shellfish and fishery habitat
    restoration in P.L. 102-368. These funds are no longer
    required.

        Mr. Rogers. You have got another $3.4 million hole that you
    have to fill.
        Now, when can we expect your proposals in view of these new
    facts about the lack of any fees that will be forthcoming and
    these other holes? When can we talk?
        Dr. Baker. Well, as soon as we finish the hearing, we are
    happy to start that discussion.

                        LAND AND WATER CONSERVATION FUND

        Mr. Rogers. Now, you also ask $105 million for a number of
    new programs out of the land and water conservation fund that
    Chairman Ralph Regula was talking to you about which come from
    offshore oil royalties. Unfortunately, I think for your request
    under the law, the allowable purposes of monies from the land
    and water conservation fund are for the National Park System,
    the National Forest System, and the National Wildlife Refuge
    System. And as Ralph Regula has said, the subcommittee with
    jurisdiction over that is Interior, not this subcommittee.
        In addition, the Secretary that is mentioned throughout the
    law establishing the fund is either the Secretary of the
    Interior or Agriculture, certainly not Commerce. And only
    Commerce is one that we have jurisdiction over.
        It appears that you have a major authorization problem for
    the $105 million Lands Legacy Initiative that you asked for
    from that fund, and so we are confused. Is this one of those
    OMB initiatives as well?
        Dr. Baker. No, Mr. Chairman. We submitted what we thought
    were responses to public needs for the NOAA programs, and then,
    in fact, it was OMB that proposed that this particular set of
    programs which we have on the table, the Marine Sanctuaries,
    Estuarine Research Reserves, certain work in the Coastal Zone
    Management Program, be funded from the Land and Water
    Conservation Fund.
        Now, as they reported to us, in their view, authorization,
    special authorization was not required for the Department of
    Commerce to use those funds. Although this has not happened in
    the past, to do this in the future was not precluded from the
    act.
        However, they thought that there might be questions about
    this in Congress, and so we have also transmitted legislation
    which we think would cover this issue. But as I said at the
    beginning, I think our view from NOAA is these are important
    programs. We would like to see them or some fraction of them
    funded because they meet needs. And if this funding mechanism
    is one that is not workable, we are certainly willing to try to
    find another way to do this.
        Mr. Rogers. Well, we have got another $105 million hole
    here. OMB is not batting too good today.

                          COASTAL ZONE MANAGEMENT ACT

        Now, within the Lands Legacy Initiative, you request $28
    million for community-based smart growth under Section 310 of
    the Coastal Zone Management Act. Unfortunately again for OMB,
    there is no authorization for activities under Section 310 of
    the CZMA, even if somehow non-matching grants to communities
    for a whole host of purposes could be considered technical
    assistance. There was a similar request for funding 2 years
    ago, which was not provided for the very same reason.
        Now, how are we going to handle that? Are you going to send
    up another reauthorization for the CZM Act to carry out what
    you are proposing here?
        Dr. Baker. Yes, sir. In fact, I understand we have sent up
    a proposal for reauthorization of the Coastal Zone Management
    Act, which would include Section 310.
        Mr. Rogers. If history is a guide, it will not pass, and so
    we are going to have another $28 million hole in your request.
    You don't want us to appropriate for something not authorized,
    do you?
        Mr. Gudes. Mr. Chairman, much of this bill isn't
    authorized. For the FBI, the Immigration Service, much of the
    rest of the Department of Commerce is not authorized.
        Mr. Rogers. But you are asking for a new program, or a new
    use.
        Dr. Baker. Well, it was an expansion of the 310, which has
    been one of the more popular programs in coastal zone
    management, the States' noncompetitive grants.
        Mr. Rogers. We fund things like the FBI under existing
    authority. This doesn't have that going for it. So we have got
    another problem here.
        I have a host of others, but I am going to yield to my
    colleague.
        Mr. Serrano. Thank you.
        As the chairman said, I came on this subcommittee for the
    first time, and I fell into the chair of the ranking member.
    And so I had to spend quite a bit of time just trying to learn
    different areas of this bill, and I must say that of all the
    areas, NOAA is the one that seems to be the most complicated
    because it covers so many things, from the atmosphere to the
    bottom of the ocean and everything in between. And I want you
    to help me in terms of the work that some of us have to do in
    our communities in just dealing with a lot of people.
        One of the complaints around here is that we approve and
    support too many things that too many members really have very
    little information about.
        So if you were to advise me on what to tell constituents of
    mine who wanted to know what is NOAA in 25 words or less and
    how it affects their life--I mean, they know about the Weather
    Service, but past that I don't think they really know NOAA.
    What would you tell me?

                                OVERVIEW OF NOAA

        Dr. Baker. Mr. Serrano, I appreciate that opportunity. As
    you say, the part of NOAA that affects everybody in the country
    is the Weather Service, and we have the best Weather Service in
    the world. We provide warnings and forecasts. As Jack Kelly
    says, we have a ``no surprises'' Weather Service that works so
    well and people tend not to think about it. But the nightly
    news provides that information.
        The Weather Service is not all that we do. We are very
    heavily engaged in community work that ranges from the private
    sector out to the private citizen as we do our oceans work. For
    example, the mapping and charting that we do is, in fact, the
    oldest part of NOAA, started in 1807, provides that information
    which is needed for 95 percent of the marine transport that
    comes into the country. So anybody who drives a car, eats a
    fish, or is engaged in any kind of thing that has international
    or even interstate commerce has been involved with some piece
    of NOAA. So we are providing that kind of information.
        The New York-New Jersey harbor, for example, depends
    critically on the basic information we provide on tides and
    currents for the big ships that come in, and we are trying to
    do a better job so the big ships don't go to Canada or to some
    other ports.
        We are also very much engaged in providing the science for
    natural hazards. As we see oil spills or spills of toxic
    substances, we provide the science to the Coast Guard and to
    EPA, which don't have the same capabilities that we have, so
    that we can do the right job of both protecting people and
    protecting the nursery habitats for fish.
        We are also very much engaged in the Coastal Zone
    Management Program where we have all states but one, in fact,
    that have coastlines, providing both in those areas what we
    call smart growth, growth that both protects the environment
    but also allows economic development, just as a joint state-
    Federal program which has been very, very successful.
        We are also responsible for archiving and distributing all
    of the environmental data that the country uses as we look at
    these longer-term changes.
        So any citizen in any part of the country, but particularly
    in a coastal state, will be engaged with NOAA in many issues
    every day.
        Mr. Serrano. Now, there are many Members of Congress from
    districts that are surrounded--not surrounded but that touch on
    water in many ways, and I have often heard them question how
    you would be involved with them. What should I tell them?
        Dr. Baker. Well, any area that has marine connections is a
    place that NOAA is involved. And as I say, we provide
    monitoring and detection of the pollution that affects beaches.
    When communities want to develop along a coastal area to build
    new hotels or new developments, they need to meet environmental
    standards so that that is sustainably done. These environmental
    standards are developed under the Coastal Zone Management Act,
    as I say, which every coastal state, including New York, is a
    participant. So we are very much engaged in the economic growth
    of the country as we grow and make sure that we are protecting
    our environment.
        Mr. Gudes. I would just say that whether your constituents
    are in New York City, in the Bronx, or eastern Kentucky, or
    Florida, the work that this agency does is critically important
    to those people. Take hurricanes off of Florida. Take winter
    storms in New York. Our agency is the key agency that does
    forecasting to the public. Our agency is the agency that does
    climate forecasting for the public. This isn't a coastal issue;
    it isn't an interior issue. It is critically a life and safety
    issue, and it is our Weather Service and our satellites that
    provide that monitoring, that capability for the American
    public.
        Mr. Serrano. Thank you.

                          DREDGING IN NEW YORK HARBOR

        I also know that you work or will be working closely with
    the Corps of Engineers, for example, the Corps has identified
    highly contaminated sediments such as dioxin as a concern in
    the port of New York-New Jersey project. How will the proposed
    NOAA initiative impact the ongoing Corps work at the port? And,
    secondly, are they supportive of your request? Is this a joint
    effort that they are aware of?
        Dr. Baker. They are very much aware. In fact, the effort
    that we have in our initiative, in fact, was worked jointly
    with the Corps of Engineers. This comes from communities saying
    that we want to be involved in these dredging activities, both
    as we look at dredging to improve the port but also dredging
    that could help us either build some new areas or make sure
    that we don't destroy the wetlands.
        Now, on this particular New York issue, do we have any
    comment on that, Nancy? Nancy Foster is the Director of our
    National Ocean Service.
        Dr. Foster. We work very closely with the Corps of
    Engineers because we are the people that work with EPA on
    Superfund sites. So we have a great deal of expertise when it
    comes to the protection and restoration of habitats and living
    marine resources.
        So there is a piece of the Lands Legacy Initiative that
    deals with dredging. Since we have a concern for the
    environment and a concern for dredging ports and harbors, as
    you heard Jim say, the idea is that we bring our communities,
    local communities to the table early in the process with a view
    toward not getting these projects hung up at the very end and
    eliminating costly delays. And the Corps is very interested in
    this, as is the port of New York.

                       CORAL REEF RESTORATION INITIATIVE

        Mr. Serrano. I also noticed, Dr. Baker, that you have a new
    initiative. I don't have it handy how much you are asking, but
    it is a new initiative to deal with the issue of the severely
    injured coral reefs in several locations. Could you tell me
    something about that initiative, where they are located and
    what condition the reefs are in? And can we, in fact, restore
    them to some state that we could all be proud of?
        Dr. Baker. Yes, sir. This is an important aspect of our
    program that we have proposed. Ninety-five percent of the coral
    reefs are in the Pacific; 5 percent are in the Caribbean and
    around Florida and the Gulf of Mexico. But they are equally
    important to us because they affect the tourism and the
    business and the ecological systems that we deal with.
        We have $10 million in here primarily aimed at coral reef
    restoration, and as you know, recently there was a grounding
    off Mona Island in Puerto Rico in 1997 where coral was
    damaged--seven acres, in fact.
        We have new techniques for stabilizing and restoring the
    coral by gluing part of it back with special underwater
    concrete. We have ways of coming back and regrowing some of the
    coral.
        Something like 80 to 85 percent of our marine fish use
    coral reefs as a habitat during some part of their lives, so
    this is not just a tourist destination, but it is also very
    important for our offshore marine fishery industry. And we felt
    that restoring coral reefs, particularly those reefs which are
    damaged by boat groundings, bad mistakes in navigation and so
    on, are something that we needed to address. So that is the
    highest priority for us as we look at the coral reef issues.
        Mr. Serrano. Thank you, Mr. Chairman.
        Mr. Rogers. Mr. Latham?

                 Y2K COMPLIANCE OF THE NATIONAL WEATHER SERVICE

        Mr. Latham. Thank you, Mr. Chairman.
        As you know, in last year's bill, this committee directed
    the Department to certify that all the systems were year 2000
    compliant by April 1 of this year. However, as of the latest
    correspondence from the Department, it is not clear that the
    National Weather Service was certified as being compliant.
    Would you give us an update on what is going on?
        Dr. Baker. Yes, sir. We are very nearly Y2K compliant in
    all of our mission-critical systems. We provide quarterly
    reports, and we continually monitor about $6.2 million of the
    supplemental funding that we had requested is associated with
    our process to make sure that we can do that.
        We are very close now to being fully compliant in mission-
    critical systems. Our big supercomputer has been made Y2K
    compliant, and we are now using the additional funding that we
    requested to make our non-mission-critical systems Y2K
    compliant.
        I think our experts are convinced that we will be fully
    compliant well in time for the end of the year.
        Mr. Gudes. I think the biggest issue that we have is our
    new Class VIII supercomputer, getting that installed. We are in
    the process of installing that in FB-4, Federal Building 4. It
    turned out that asbestos was in the flooring, and when the
    computer was put in, the floor moved. We started repairing the
    floor. Asbestos was found there. We have actually had a delay
    because of those environmental conditions in Suitland.
        I think the only other systems that we have some problems
    in, our research component, we have the Wind Profiler System.
    We are in the process of making that Y2K compliant. We did make
    it Y2K compliant, but it actually ended up inhibiting the
    ability of the system to do its mission. We had to go back and
    redesign that system. And I think we have one system in NOS,
    the Chart Distribution System, it will be Y2K compliant this
    summer.
        The other thing I should say, General Kelly is here. We
    have done a lot of work with the users on Y2K to ensure that
    the end-to-end system will work, so it is just not that NOAA
    ensures that we are Y2K compliant, but that the users are
    prepared. And the Weather Service and our satellite service
    both have done, I think, an outstanding job in that.
        Dr. Baker. I might say, one of the important things we
    discovered in terms of making sure that we can deliver weather
    services on January 1, 2000, is that it is not just the fact
    that our computers can work, but--the people can get the work;
    that if there is a power outage, we know how we are going to
    handle the power outages, and the other systems that can affect
    our internal systems. And so we have also been looking
    carefully at that, the end-to-end system, to make sure we
    really are delivering our products.
        Mr. Latham. That will be fully tested?
        Dr. Baker. We are in the process of doing that. We are
    doing it right now.
        General Kelly. We have actually done two end-to-end tests.
    The last one was about two weeks ago, with the FAA and a whole
    host of other users. We have tested our systems with their
    communications systems and were able to exchange information.

                               NOAA Weather Radio

        Mr. Latham. Still with the Weather Service, you have
    doubled the tornado warning lead times from 5 minutes to 11
    minutes. In my district, Fort Dodge, I have been waiting for a
    transmitter to be put in place since early last year. I know
    they have been working to resolve this, but the project has
    been delayed about three times. Could you give me an update on
    this?
        General Kelly. With the NOAA Weather Radio transmitter, we
    are having intense challenges with the manufacturer. We just
    went out for a demonstration. It did not work. The wheels are
    in motion.
        Mr. Latham. We just had 29 tornados in the state last week.
        General Kelly. Yes, sir. But the manufacturer has failed to
    produce a transmitter that works, so I am kind of reluctant to
    pay for it.
        Mr. Latham. That sounds rational. And thank you for being
    rational.

                              Seafood Inspections

        One thing I should ask about, being on the Agriculture
    Appropriations Subcommittee also, is the National Marine
    Fisheries role in inspecting seafood. The GAO has recommended
    that that duty be handled by one single agency like the Food
    Safety Inspection Service. Do you agree with the GAO? I mean,
    that is an agency whose goal is safe food. Would that be
    appropriate?
        Dr. Baker. Yes, in fact, we are planning to do a handoff of
    that. Do we have an answer on exactly where we are with that?
        It is in process.
        Mr. Latham. When do you expect it to be done?
        Dr. Baker. It is about to be transmitted, the proposal to
    do just that.
        Mr. Gudes. In terms of the quality testing of the shellfish
    and the seafood itself.
        Dr. Baker. So we have been working on it for several years.
        Mr. Latham. Do we have any idea when this will finally----
        Dr. Baker. Two weeks to get the proposal up here, and then
    depending on how we can make things happen, we will be pushing
    it. But this is something we want to do, absolutely.
        [Clerk's note.--Subsequent to the hearing, the following
    information was provided:]

        The President's Budget for FY 2000 includes a provision to
    transfer the U.S. Department of Commerce voluntary Seafood
    Inspection Program from the National Oceanic and Atmospheric
    Administration (NOAA) to the Food and Drug Administration
    (FDA). The transfer of the existing Program to FDA, where it
    will continue to operate as a separate fee-for-service
    activity, will be accomplished as part of the Department of
    Health and Human Services/FDA appropriations process, if the
    Congress concurs. Separate legislation to establish the Program
    as a Performance Based Organization (PBO) and transfer it to
    FDA is anticipated in the near future. Although the program can
    function at FDA without PBO legislation, this legislation will
    be very beneficial in that it will provide a firm legislative
    foundation for the voluntary program to operate within FDA;
    establish a new management position, the Chief Operating
    Officer, to manage the program; and affect other operating
    efficiencies.
        Collocation of the two Federal seafood inspection
    activities at FDA makes good public policy sense. FDA is a food
    agency--Commerce is not. This reorganization also addresses
    confusion regarding who to talk to about Federal seafood
    inspection. FDA will continue to carry out its mandatory
    hazardous areas/critical control points (HACCP) seafood safety
    program, and the voluntary program will continue to offer its
    services through a separate organization--both within FDA.
        One probable benefit to the voluntary program's customers
    resulting from the transfer is expected to be reduced overhead
    costs for the program which will translate into lower future
    rates than would otherwise occur. FDA will also have the
    opportunity to eliminate redundant or overlapping inspections
    relative to the voluntary program's customers. By recognizing
    that these plants are already operating under Federal
    oversight, FDA can redirect valuable inspection resources to
    address other priority seafood or food safety needs. This will
    not add to the voluntary program's customers' costs but will
    result in more effective use of our Government's food safety
    resources.
        [Note: The legislation has not yet been transmitted.]

                               La Nina Situation

        Mr. Latham. Just one more question here, I guess, and this
    is an ``aggie'' question, in a sense. We have had El Nino, and
    normally as far as adverse conditions such as drought in the
    Midwest, La Nina is what normally is the bigger problem. Do you
    have any predictions or estimates of what we are going to see
    this year in the Midwest?
        Dr. Baker. Right now, the models all agree that we are
    going to have a continuing La Nina situation for at least the
    next 3 months, and normally all the models don't agree when we
    are looking at these long-term forecasts. But the fact that
    they do agree I think means we have a pretty robust forecast
    for that, so typical La Nina conditions there for this coming 3
    months. Three months is about as far forward as we can forecast
    at this point.
        The Pacific Ocean is cold at the moment, abnormally cold.
    It is staying that way. All of our information says it is going
    to continue that way.
        Mr. Latham. So the prediction in the Midwest, the normal La
    Nina would be drought?
        Dr. Baker. That is right.
        Mr. Latham. So we can hope for higher grain prices because
    of----
        Dr. Baker. I am not getting into that. [Laughter.]
        But there definitely is a connection.
        Mr. Latham. I know, and I think the chairman and I talked a
    lot about La Nina when we were over on our trip together.
        Dr. Baker. Mr. Latham, I should say that one of the things
    that we are trying to do is to improve that forecast because I
    think we saw the importance of doing an accurate El Nino and La
    Nina forecast over the past 2 years. And so one of the requests
    in our budget is to expand the observing system that we have in
    the Pacific Ocean so that we can, in fact, provide better
    information for these longer-term forecasts.
        Mr. Rogers. Thank you.
        Congresswoman Roybal-Allard.
        Ms. Roybal-Allard. Thank you, Mr. Chairman.

                                 dredging issue

        Coming from California I am acutely aware of the importance
    of our ports and the importance of trade. I would like to get
    back to the dredging issue where I understand that it has been
    estimated that you have to dredge about 400 cubic yards
    annually at our ports.
        Could you elaborate a little bit more on this proposal and
    how California will benefit, particularly the L.A. port, in
    light of the fact that we are building the Alameda corridor,
    which is intended to really allow for greater imports and
    exports in that area?
        Dr. Baker. Congresswoman Roybal, I grew up in Long Beach,
    California, and I watched it. When I was growing up, I watched
    the whole port slowly sink as they took away a lot and did not
    replace it with water. Fortunately, we are past that point now
    as we pump water back in and oil comes out.
        But we have been very much engaged in the dredging issues,
    both in the Los Angeles/Long Beach Harbor and also in the San
    Francisco Harbor because as I said it is important to those
    communities to make sure that we can continue to have big ships
    come in so that we can have the commerce that makes sense for
    us.
        One of the things that the communities have asked for,
    both, all around San Francisco Bay and in the Southern
    California area, is to find a way that we can both dredge,
    which is economically critical, but find a place to put the
    dredge spoils that make sense. They do not hurt the wetlands
    but they can allow communities to develop some more land or put
    it in a place that makes sense.
        And that is the proposal that we have in--I think it is $10
    million--in the Lands Legacy Initiative is to work with the
    Corps of Engineers to do that.
        We also will be establishing with the funds that we are
    requesting in this budget a new information system in the Long
    Beach/Los Angeles Harbor. It is called the PORTS, Physical
    Oceanographic Real Time System, because the big tankers that
    come in want to know what the tides and the currents and the
    winds are and they want to know it right now, in real time.
        And, so, we are putting in place such a system so they can
    get that information. This has proved very valuable in the four
    ports where we have it now. And the mariners love it.
        So, we are trying to address both the community concerns
    and the economic concerns with the new issues that we have on
    the table.
        Ms. Roybal-Allard. Now, I believe that up North, when you
    were dredging, you ran into some contamination problems. Is
    there some anticipation that the same thing could happen in Los
    Angeles and are you prepared to deal with that?
        Dr. Baker. Well, I think that it is pretty clear that we
    are going to have contamination problems because there is no
    port where you dredge where you do not have some contamination.
    It is a question of what it is, how you can deal with it.
        There is a huge DDT problem right off the Pales Verdes
    area.
        Mr. Gudes. Actually our program is not proposing to do the
    dredging, but rather work with communities in terms of
    effective, efficient use and environmental use of the dredge
    spoils. So, to be able to use dredge in ways that are creative.
    In Maryland, here, for example, Popular Island, where dredge
    spoil from the Chesapeake Bay is being used to restore those
    islands, which have eroded over the years and to be able to
    rebuild those islands.
        That is the concept.
        Ms. Roybal-Allard. What happens if it is contaminated
    though?
        Mr. Gudes. We are trying to find ways actually to be able
    to more effectively use contaminated spoils so that it can be
    used and be capped, I believe.
        Do you want to elaborate?
        Dr. Foster. That again is one of the uses of this Lands
    Legacy proposal. From the beginning it was to get the community
    and the concerned folks to the table so that you can decide
    based on all the experts, whether or not it is something that
    you could use. And if there is any way to treat it and what is
    the safest way to deal with it. And if not, then to select the
    safest disposal method so that people are comfortable with what
    is going to happen upfront.

                          noaa partnership with hbcus

        Ms. Roybal-Allard. I also noticed that on your budget
    proposal on page 4, you include a million dollars to establish
    an educational training relationship, a partnership with
    historically black colleges and universities.
        Could you elaborate a little bit on what you hope to
    accomplish through that and if, at any time, you intend to
    expand it, for example, into the Hispanic-Serving Institutions.
        Dr. Baker. Yes, we do. We are, in fact, looking at the
    moment to have an expansion of that program and we are talking
    to the various representatives of the Hispanic-Serving
    Institutions. It is our view that the work place in the
    Government should reflect the citizenry of the United States
    and, yet, it does not do that. It is very skewed in terms of
    minority representation.
        We believe that the environmental area is one that is
    exciting and interesting and we have been approached by these
    groups of colleges and universities saying is there a way that
    we could work with you to provide programs and infrastructure
    that would both help your scientific programs but also develop
    interesting ways for students to come up through the programs
    and then contribute either to your agency or in the rest of the
    work force.
        So, we have been closely working with the representatives
    of those institutions to find a way that we could do something
    that was relevant to our mission and, yet, could help build
    capacity in those institutions and we are jointly putting
    together a program to do that.
        Ms. Roybal-Allard. Are you doing anything, for example, at
    the high school level? At least trying to get information out
    to let them know that there is even----
        Mr. Gudes. Actually we----
        Ms. Roybal-Allard. By the time you get to college, if you
    have not taken the right classes----
        Dr. Baker. Yes, exactly. And we have two areas where we
    have been involved in lower than college institutions. And one
    is the GLOBE program where we have students in the early grades
    taking environmental measurements and then putting these
    measurements on the Internet. Maps are then made and the
    information is sent back to the schools.
        We use the information in our scientific determinations but
    it also helps the students get engaged in this process. That is
    the GLOBE program and there are over 2,000 schools involved in
    this program.
        And then we have also been very supportive of the JASON
    program which is a way of getting information out from
    underwater exploration out to schools through a National
    Geographic activity. And we would like to expand those things
    because that is a way of showing students what can be done and
    getting a good interaction back.
        Ms. Roybal-Allard. Could I get more information?
        Dr. Baker. Yes, I would be happy to send you some more
    information.
        Mr. Gudes. I also think that, you know, our activities are
    located through the country and in Chairman Rogers' district;
    the Weather Service Office works with local schools. That
    happens throughout the country. The Fisheries Service in
    Florida has adopted a Marine Science School, Madeira Beach High
    School, just North of St. Petersburg. And this is something
    that is ongoing all the time. Our hurricane pilots are out
    talking with students.
        I met with Cabriole High School in Longboat, California,
    when I was out there.
        Ms. Roybal-Allard. Well, maybe I can get something going in
    my area.
        Dr. Baker. And we also hire students during the summer,
    summer interns. This has been a very successful program. They
    can come in, see some of the exciting things that we do and
    then they can go back to their schools and get more engaged.
        Ms. Roybal-Allard. Well, if you could just provide me with
    some----
        Dr. Baker. Yes, we would be happy to do that.
        Ms. Roybal-Allard. More information.
        Thank you.
        Thank you, Mr. Chairman.

                           jurisdiction for dredging

        Mr. Rogers. Dr. Baker, the Corps of Engineers would be
    surprised, I think, to know that you are into the dredging of
    harbors business. And I think the EPA would be surprised that
    you are in the business of deciding what to do with the spoils
    out of those dredges.
        You have no jurisdiction for that.
        Dr. Baker. No, sir. And I did not mean to say that we are
    involved in dredging. But we are involved there in two areas.
    One is in mapping of areas that have been dredged in case there
    are changes in the shape of the ocean bottom because this is
    something that the big tankers are very interested in knowing.
    That is one area.
        And the second thing is in helping communities with
    scientific information to help communities decide what to do
    with dredged material. That was the basis of our----
        Mr. Rogers. Where does EPA fit into that? I thought that
    was what EPA was doing.
        Mr. Gudes. We actually do, at the National Ocean Service,
    work with EPA. In fact, we have individuals located in EPA's
    regional offices in damage assessment, in restoration, in
    hazardous materials, the oil spills are issues. And we actually
    now do consulting on some issues that are very similar.
        Mr. Rogers. I suggest you stick with your authorization and
    stay out of other people's business.
        We got enough hands in the pie.
        Mr. Gudes. Mr. Chairman, we are authorized to do those
    things.
        Mr. Rogers. Well, not these things.
        Mr. Gudes. We are authorized. We deal with these type of
    issues every day. In the case of the Prince William Sound with
    EPA, we were, Dave Kennedy, from the National Ocean Service,
    was probably the lead individual who worked on trying to deal
    with the restoration of those beaches in the Prince William
    Sound area.
        Dr. Baker. Part of the CERCLA authorization.
        Mr. Rogers. Well, Prince William Sound is different than
    the regular dredging process. That was a specific disaster
    relief.
        Mr. Gudes. I am sorry, Mr. Chairman, are you just talking
    specifically about dredging, only dredging? I thought you were
    talking about the whole----
        Mr. Rogers. The whole conversation you had with Ms. Roybal-
    Allard was about what you are doing in dredging the harbors in
    California, which you have no responsibility nor money. The EPA
    deals with the hazardous deposits and so forth. You have a very
    limited authorization to deal with anything dealing with
    dredging. And I do not want this agency reaching out and trying
    to bring somebody else under your jurisdiction. We will not
    stand for it.
        Enough of that has gone on in NOAA already. And in this
    budget request, my gosh, you are proposing to seize the
    Interior Department. And there are other agencies that you are
    just sort of swallowing up if you have your way, and that just
    is not going to happen.
        Mr. Miller.

                         mote marine research facility

        Mr. Miller. Thank you, Mr. Chairman.
        I think I am the only cultural member of this Committee
    from the Gulf of Mexico.
        Mr. Latham. You have Puerto Rico. [Laughter.]
        Mr. Serrano. You have Long Island Sound.
        Mr. Miller. You have the coast, too?
        A couple of different things. This is my first year on this
    Committee also but prior to entering Congress I was on the
    Board of Mote Marine research facility. So, I am familiar with
    NOAA. My predecessor in Congress, Andy Ireland, took my job on
    the Mote Marine Board when I got elected to Congress, and we
    just switched jobs there.
        But you mentioned Bob Ballard and the JASON project and
    that is a really good program. It is one of the great ways that
    Mote Marine really excites young people. And Bob comes to
    Congress a lot and gives a little demonstration most years,
    too. So, that is the type of program that you need to get young
    people excited.
        So, you all provide direct support for that program?
        Dr. Baker. Yes, we do.
        Mr. Miller. Do you know how much?
        Dr. Baker. It is about $1.75 million.
        Mr. Miller. That is the type of thing that you need to get
    young people involved in science.
        Let me go quickly then. One area that is of interest to me
    is red tide. You all have done some research on this harmful
    algal bloom work and I know that Mote has done some of that
    work. Where do we stand on that issue as far as progress and
    funding levels? And it was authorized last year.
        Dr. Baker. Congressman Miller, this has been, I think, a
    very important issue. In fact, in my mind is one of the most
    important problems that is facing coastal states and the
    country is the fact that as we put new chemicals into the ocean
    we are changing the chemistry of the ocean. We are putting
    phosphorus and nitrogen and heavy metals out as non-point
    source pollution; it is changing the chemistry and it is
    changing the biology such that we are getting more and more
    toxic substances growing in the coastal areas.
        And we can show you maps and increasing trends of these.
    Red tides are one example. Brown tides, dead zones, all kinds
    of toxic substances, toxic animals, toxic plants that grow and
    they seem to be primarily more toxic than you would expect just
    for the number of nutrients that are there.
        In my view, the changing chemistry of the ocean leading to
    these toxic substances is a more important issue than the
    changing atmospheric issue that leads eventually to the change
    in climate.
        And I think it is something that we have to address. The
    NOAA role here is accurately monitoring, doing the science,
    finding out exactly how the chemistry is changing and trying to
    understand the biology and then providing that information out
    to communities.
        Right now, we have $11 million in our budget to do that. We
    will be looking to do more in that area because I think it is
    absolutely critical for communities to know what is the change
    in chemistry and how are the substances changing?
        This has a direct impact on fisheries, it has a direct
    impact on people using the beach. And as I said, it is not just
    toxic substances but it is also lack of oxygen that happens. We
    have this area the size of New Jersey in the Gulf of Mexico
    that is a dead zone because of all the chemicals and we are
    trying to understand the extent of that, the science of it, so
    we can learn how best to deal with it.
        Mr. Miller. How much of that do you do as in-house research
    versus, you know, external?
        Dr. Baker. I think approximately 72% of this is external.
    And as we propose programs we are trying very hard to do this
    work outside with the university community which is critical.
    And there is some private sector involvement also.
        Mr. Miller. Is there a bias toward the university
    performing this research? What about labs such as Mote Marine
    that are not affiliated with a university?
        Dr. Baker. Actually Mote Marine is a great lab. And I have
    known the directors and been involved in their activities. They
    do excellent work and have a good reputation.
        Mr. Miller. But it is not a university.
        Dr. Baker. The way we run our programs it is a competitive
    procurement.
        Mr. Miller. It is funded significantly below the authorized
    level. Is that because the authorized level was too high or is
    it not a high priority?
        Dr. Baker. Mote Marine?
        Mr. Miller. No, no. The issue of----
        Mr. Gudes. The blooms are funded under several programs in
    NOAA, the Coastal Ocean Program, the Sea Grant Program, and
    then some of our NOS laboratories we do the work in Charleston,
    South Carolina, for example, is a lab that works on the toxic
    substances.
        Mr. Miller. Let me switch to another thing. I guess Mote
    Marine gets involved with sharks and what is happening in that
    area of research. And I guess NOAA is taking a more active role
    on these migratory marine fishes.
        Dr. Baker. Absolutely.
        Mr. Miller. Like shark and tuna, et cetera.
        And Mote has been doing some of that work.
        Dr. Baker. They have been doing some of that work.
        Mr. Miller. And, you know, enhancing some of those stock
    because there has been a perception that younger kids go out
    and go shark fishing.
        Dr. Baker. Sharks are a real interesting example of a
    problem that we face. They are long-lived and they are being
    heavily fished these days. There is a lot of finning of sharks.
    To understand their basic biology of sharks, their life-cycle,
    the recoupment of sharks is something that is important. And
    Mote Marine has a long history of good work here. We have a
    competitive shark program I believe.
        And Mote participates in that but I do not know more
    details beyond that.
        Any other comments about the shark program?
        Dr. Rosenberg. Mote Marine Lab does actually receive
    funding for us to work in the history of sharks. They have also
    hosted several stock assessment and working group meetings with
    bringing in outside experts to work on the status of shark
    resources.
        So, they have been intimately involved in the process of
    developing this science.
        Mr. Rogers. You need to identify yourself.
        Dr. Rosenberg. I am Andrew Rosenberg and I am the Deputy
    Assistant Administrator for the National Marine Fisheries
    Service.
        Mr. Miller. The Shark Research Center that is designated
    somehow or another.
        Are you getting a new ship?

                           fisheries research vessels

        Dr. Baker. We are proposing a new fisheries research vessel
    in the budget to replace, to start the replacement of some of
    our 30 to 35-year old ships.
        Mr. Miller. Is this something that GAO and some others have
    questioned whether you should be in that business directly or
    whether you should be contracting that out rather than owning
    and running these ships?
        Dr. Baker. Yes. We have had a continuing discussion with
    both the GAO and the Inspector General in the Department of
    Commerce about the role of Government-owned versus outside
    capabilities for ships. And since I became the Administrator we
    have drastically changed the ratio of in-house versus outside
    facilities.
        Today we are doing more than half the work that we do in
    mapping and charting is contracted out. And we are moving in
    that direction in research and we are looking at ways that we
    can maximize both our use of outside contractors as well as
    having in-house expertise.
        Our plan is that at the moment that this ship would be
    built with Federal funds and we are planning to operate the
    first ship Federally but the other ships which are in the
    outyears, we are still open to determining how that might be
    done. And we are looking at potential university consortia or
    private sector consortia to operate those.
        Mr. Miller. But the decision was made that you are going to
    build your own ships?
        Dr. Baker. For this particular ship. I think that overall
    the mix of NOAA ships when I came in the plan was to build and
    operate a Federal fleet of 30 Federal ships. With the help of
    this Committee, the GAO, the Inspector General and others, we
    have drastically changed that mix. We are moving closer to a
    50/50, inside/outside mix of the way we operate vessels.
        Mr. Miller. How many ships do you have?
        Dr. Baker. We will have a fleet of 15 ships that we are
    currently operating.
        [Clerk's note.--Subsequent to the hearing, the following
    information was provided:]

                  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Miller. What size?
        Dr. Baker. Well, they range from 270 feet all the way down
    to about 70, I think, in that 15.
        Dr. Rosenberg. The shortest which is about 100 or something
    like that.
        Mr. Miller. I look forward to learning more about the
    entire NOAA because I have heard a lot about it. One Federal
    facility I have in my district--and I have very little Federal
    involvement--is the Weather Service Office. Because I visited
    the facility a couple of years ago, in Ruskin, Florida, and it
    is not a large operation. But I have been there and it is an
    impressive facility. But that is the only Federal facility I
    have that is in my district.
        But I look forward to learning more about it.
        Thank you, Mr. Chairman.
        Mr. Rogers. Mr. Wamp?
        Mr. Wamp. Thank you, Mr. Chairman.
        Welcome, Mr. Secretary. I, too, appreciate the National
    Weather Service and the cooperation we have there, Congressman
    Cramer and I, on the kind of emergency location there. And it
    has served us extremely well since it was put into action,
    placed into action, and I am positive that it saved lives since
    it was put into operation.

                                invasive species

        But today I want to ask about the invasive species issue.
    It is very germane to the Tennessee Valley in that there are
    probably two dozen known invasive species that are a major
    environmental problem to us. And we have a chair of excellence
    at the University of Tennessee, David Simberloff, who is one of
    the experts in our country on this particular issue.
        I just wanted briefly to go through how you coordinate with
    USGS and Interior agencies. I am also on the Interior
    Subcommittee and so this cuts both ways for me here on this
    particular problem of invasive species.
        Dr. Baker. Well, we coordinate very well with the
    Department of Interior on this. In fact, we co-chair the
    Aquatic Nuisance Species Task Force, which is one that the
    President established by Executive Order this past year.
        Bruce Babbitt and I co-chair that and that is our
    responsibility in aquatic species. And we are working very
    hard. I do not have the numbers on what we are spending on
    that. Do we have a basic species number?
        Mr. Gudes. No.
        Dr. Baker. But this is something that is a very high
    priority for us. The President has established an Executive
    Order and we are looking at a whole series of things from Zebra
    mussels to green crabs in California and the Pacific Northwest
    and a variety of other things that have an impact. It is
    something that we take very seriously and we have full
    coordination since we co-chair that task force.
        Mr. Wamp. And I realize that it is still relatively new.
    The American people do not fully understand it. And I hope they
    will understand what a great environmental threat it is but
    with respect to the aquatic side of this double-edged problem
    it seems to me like great or maybe a greater emphasis is placed
    on ports versus inland watersheds. And I just wondered where
    the greatest threats are and what is being done specifically in
    watersheds like the river systems in the Tennessee Valley
    region with respect to invasive species there? We have
    problems, obviously, but I know a lot of attention goes to the
    ports.
        Dr. Baker. Well, ports are important. The NOAA
    responsibility is both for the coastline and for the Great
    Lakes. And, of course, the Zebra mussel, which is one of the
    most invasive species that we have, started in the Great Lakes.
    And, so, we have been doing for a long time research on trying
    to understand the life cycle and the issues that are associated
    with the growth of the Zebra mussel, which is now extending out
    over most of the watershed in the Eastern part of the United
    States.
        It has not quite made it across the Rocky Mountains yet but
    it is still covering most of that part of the United States.
    So, this is something that we are very engaged with and that is
    probably the biggest effort that we have, I think, the Zebra
    mussel effort. And, so, that is one that really is not just a
    port issue, but it is very much a waterways issue also.
        Mr. Wamp. As I see your Lands Legacy pop up in half a dozen
    places, is the Lands Legacy part of that issue directed at
    invasive species?
        Dr. Baker. The invasive species request is about $1 million
    and that is separate from Lands Legacy. I do not believe that
    is included. We do not have a piece of Lands Legacy here. We
    have $1 million proposed for invasive species this year. And
    does that include the current funding on the Zebra mussels that
    we have, which must be in addition to that?
        Mr. Gudes. The Zebra mussels is about $2.8 million.
        Dr. Baker. Most of our expenditures are directly out to the
    states on the aquatic nuisance species.
        Mr. Gudes. And the Great Lakes Environmental Research
    Program.
        Mr. Wamp. One of the minor points of paranoia that exists
    on our side of the aisle here with Lands Legacy is that with
    this many different agencies cooperating who is the umbrella
    agency overall of Lands Legacy? It seems that one of the fears
    is that this is a way to take the issue of climate change or
    global warming or both and try to, through Lands Legacy, spread
    out the forces and maybe even enact some of the Kyoto
    recommendations without ratification by the Senate.
        And I raise that issue just because I see you all as the
    probable umbrella agency. Is that the direction that we are
    headed?
        Dr. Baker. No, sir.
        There is no connection with what we have proposed under the
    Lands Legacy program and the issues of global climate change or
    Kyoto compliance. The issues which we have addressed under
    Lands Legacy are the issues of coastal zone management, marine
    sanctuaries, National Estuarian Research reserves, which are
    strictly local and regional land management issues, which
    communities have asked to be involved with. It is in no way
    connected with the global change or Kyoto compliance issues.
        Mr. Wamp. So, you could say that had Kyoto would not even
    come up, we would still be doing your portion of Lands Legacy
    in their entirety just as good environmental solutions?
        Dr. Baker. Absolutely. In fact, the issues which are on the
    table for the Lands Legacy program were on the table when I
    first came in as administrator in 1993.
        Mr. Wamp. And they are not related to climate change?
        Dr. Baker. Absolutely not.
        Mr. Wamp. Thank you, Mr. Chairman.
        Mr. Rogers. Thank you.

                         salmon restoration activities

        Now, let me get back to the budget. You asked for a new
    $100 million grant program for West Coast States, Washington,
    California, Oregon, related to salmon restoration activities.
        You have indicated that the authorization for that program
    is in Section 6 of the Endangered Species Act. That section
    does provide for financial assistance to States. It authorizes
    appropriations from the Cooperative Endangered Species
    Conservation Fund in the Department of the Interior.
        It does not authorize appropriations of general account
    monies, as you propose in your budget. Is that yours or is that
    OMB?
        Dr. Baker. Well, we believe that we have authorization for
    this. Let me ask our general counsel if she has a comment on
    that fund.
        Ms. Medina, this is authorization for the salmon fund.
        Ms. Medina. Yes. We have an authorization under the
    Endangered Species Act under Section 6, and under the general
    purposes of the statute to recover these species.
        Mr. Rogers. It authorizes appropriations only out of the
    Cooperative Endangered Species Conservation Fund, which is in
    the Department of the Interior.
        Ms. Medina. I believe we have cooperative agreements with
    states in place now, Mr. Chairman, and our authority derives
    from this portion of the Act and the Secretary, as defined in
    the Act, is both the Commerce Secretary and the Interior
    Secretary.
        But perhaps you should have a legal discussion of the
    authority that is in the Act.
        Mr. Rogers. We will have a staff discussion of this but I
    think that is in the Department of the Interior.
        Ms. Medina. We would be happy to discuss it with you
    further.
        Dr. Baker. We should look at it in more detail.
        Mr. Rogers. You can discuss it but I suggest that you read
    the statute first. Nevertheless, it is the Chair's opinion that
    it is in the Department of the Interior.
        Until you can prove to me otherwise, that is the way that
    we are going to interpret it.
        That is an indication that other agencies, such as
    Interior, are given the predominant role by statute with
    respect to the Endangered Species Act, as it should be. And I
    have to tell you that this agency is reaching out and grabbing
    other people's jurisdictions. And I do not know what is driving
    that, Dr. Baker. You are not that kind of person.
        Dr. Baker. But we have responsibility for marine species
    under the Endangered Species Act. And salmon are defined as our
    responsibility there. It is a joint responsibility depending on
    exactly where the salmon are. But that is a definition in the
    Act that NOAA is responsible for the marine species and we have
    separated out those species so we do not have overlap on it.
        Mr. Rogers. I understand that but you are using a fund in
    the Department of the Interior which by statute you cannot use.
        Dr. Baker. I guess our view is that the funding can be used
    by NOAA but we are certainly willing to have this discussion
    with you as soon as possible and I understand your point there.
        Mr. Rogers. All right. In any case, the Endangered Species
    Act as a whole is going to require reauthorization.
        Dr. Baker. Yes, sir.
        Mr. Rogers. Will the Administration be proposing
    legislation to increase NOAA's role and to authorize a general
    appropriation of monies to carry out Section 6?
        Dr. Baker. Certainly as we have gone forward in discussions
    about reauthorization of the Endangered Species Act, we have
    not planned, as my understanding, to change the NOAA role with
    respect to what species we are responsible for.
        Mr. Rogers. Well, at any rate, here is another $100 million
    of your budget that, in my opinion, is not authorized.

                              fleet modernization

        Now, back to the new fishing boat that Mr. Wamp or, I
    think, Mr. Miller discussed with you.
        Dr. Baker. Yes, sir.
        Mr. Rogers. You are asking for $52 million for a new ship.
    As you know, GAO remains concerned about whether NOAA is
    aggressively pursuing the most cost-effective alternatives for
    acquiring marine data. And, in fact, they label it as one of
    four major performance and management issues facing the
    department.
        On February 24th, GAO indicated they did not know whether
    NOAA's proposed replacement ship was the most cost-effective
    alternative currently available because it had not had a chance
    to review the latest studies of NOAA's fleet modernization
    efforts or its acquisition plan for its fisheries research
    mission.
        Tell us whether the purchase of a fisheries ship is the
    most cost-effective alternative; what examinations were made of
    the cost of the different alternatives; and, what your long-
    term fleet plan is?
        Dr. Baker. Yes, sir.
        We have carefully looked at this question of, as we need
    new seagoing capabilities, whether we should do this in-house,
    whether we should do this with a private sector providing ships
    and the capacities to do this. And we have continuous reviews
    of the cost-effectiveness of this plan.
        And, as I said when I came in, we had a fleet of 30
    Federally-owned ships, today we are down to 15. And we are
    always looking at new ways of doing things.
        As we looked at the fisheries issue the big problem that
    the fishery management faces is stock assessment. The kind of
    stock assessment that we need to do needs to be done with
    acoustically quiet vessels. There are no such vessels available
    in the private sector today.
        And, so, we have gone out to try to find out how we can
    best get such a vessel. We have focused our fleet replacement
    on this particular area of the fleet which is the fisheries
    stock assessment whether than any other part of the fleet. And
    we did have an independent review done by a consultant, Craig
    Dorman, who had worked for the Navy and he is very familiar
    with this. We would be happy to provide that independent review
    and we would be happy to have GAO take a look at this once
    again.
        [Clerk's note.--Subsequent to the hearing, the following
    was provided:]

        A copy of the Dorman report as well as a copy of the NOAA
    Fisheries Data Acquisition Plan is attached.

                  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Dr. Baker. But we do feel that this is the most cost-
    effective way to do a job which we do not see being done any
    other way.
        Mr. Rogers. We would like to see the evaluation.
        Well, in summary, as we look at your budget request, you
    have got a lot of problems. We have got $38 million in fee and
    rescission gimmicks. We have $205 million in new programs for
    which authorization is lacking. We have got $52 million per
    ship acquisition where there appears to be no consensus among
    the agencies that are overseeing those plans.
        So, in total, there is nearly $300 million that is
    problematic right at the outset here. I do not know how you
    want to try to remedy those problems. But the time frame is
    very short.
        Dr. Baker. Yes, sir.
        Mr. Rogers. We have got to have some movement within the
    next month or so or else it goes out of our hands. So, I think
    our work is cut out for us.

                                     awips

        Now, let us get back to one of our favorite subjects,
    AWIPS--Advanced Weather Interactive Processing System.
        Where are we with respect to the June deployment deadline
    and the $550 million cap?
        Dr. Baker. We will finish deployment by the end of June
    under the $550 million cap at the build number. That is the
    capacity's that we have agreed to build 4.2, that were fully on
    track with either meeting or exceeding that deadline, doing
    that early.
        Mr. Rogers. Any hitches?
        Dr. Baker. None. There are no hitches that we currently
    have and every AWIPS system that has gone in has worked. The
    system has been very successful and we are pleased with the
    development there.
        Mr. Rogers. Is the software okay?
        Dr. Baker. Software is okay. And our software upgrades have
    continued to work.
        General Kelly. We certainly have some challenges but we
    have met the alpha versions. I am Jack Kelly, Director of the
    National Weather Service. We have alpha versions of the
    software out in a number of the forecast offices right now of
    4.2. So, we have had some challenges but we have met every one
    of those challenges.
        Mr. Rogers. Under budget?
        General Kelly. Within that budget.
        Mr. Rogers. That is the first good answer I have had all
    day. [Laughter.]
        Dr. Baker. That is why we brought in General Kelly.
    [Laughter.]
        To solve these problems.
        Mr. Rogers. What impact will deployment have on the
    operation of forecast offices, and on weather prediction from
    the perspective of someone just watching the evening news?
        Dr. Baker. Well, you have already seen, Mr. Chairman, the
    improvement in the lead time of tornadoes. The reduction of
    false alarms, a great improvement in the land fall of
    hurricanes, for example.
        All of this comes because we have a better observing system
    with NEXRAD, because we have better satellites with our GOES
    satellite and because our communication and software system is
    pulling it altogether. This is a system that works. Every piece
    of it has worked and we finally got the costs under control
    with the AWIPS.
        So, I think we really have delivered. But what you see on
    the nightly news is this nice combination of new data, better
    forecasts, a better basic forecast delivered out to the private
    sector and then some of these wonderful graphics which they do,
    and you can see the improvements there directly.
        Mr. Rogers. So, all of the installations will be in place
    by the deadline?
        Dr. Baker. We will have 119 in place and then there are two
    more that the Secretary has agreed to. Well, no. As of March
    31st we have 119. That is what my note is saying here. This is
    Jack Kelly, Director of the Weather Service.
        General Kelly. We will have the baseline systems in by 30
    June. The two new forecast offices, Caribu, Maine and Key West,
    Florida are above the baseline and will be installed in July.
        Dr. Baker. Those are two additional systems.
        Mr. Rogers. That is absolutely complete.
        Mr. Gudes. In terms of the hardware and the actual first
    4.2 software.
        Dr. Baker. At that point, we will not have closed all of
    the offices that we plan to close. Our current plan is to close
    all of the offices on the schedule by the end of this year. If,
    in fact, some of those offices are not closed or there is an
    agreement that we have to have additional offices then, of
    course, we would not have finished the system. But the system,
    as designed and planned today, is there.
        Mr. Rogers. Now, that is at Build 4.2.
        Dr. Baker. Yes, sir.
        Mr. Rogers. On Build 5, in the budget, you ask for an
    increase of $17 million for what is called systems evolution.
    Apparently the completion date has slipped, though, is that
    correct?
        Dr. Baker. Yes. Build 5 allows us to, I think, reduce by
    another 69 people. But I do not know about the slip. Jack
    Kelly, Director of the Weather Service.
        Mr. Rogers. What is the completion date of Build 5?
        General Kelly. We have money proposed in this budget and we
    will have another $9.5 million we would hope in the 2001
    budget. So, we believe it will take us about two years to
    develop Build 5.
        Mr. Rogers. What is your completion date?
        General Kelly. Two years from the start of the next fiscal
    year.
        Mr. Rogers. So, October of 2001?
        Dr. Baker. By October of 2002.
        Mr. Rogers. Tell us what Build 5 will do for us?
        General Kelly. It will do a number of things. Number one,
    it will bring on some software that has already been tested
    which will further improve our accuracy to detect tornadoes and
    severe thunderstorms. And further lengthening the lead time of
    the tornadoes and severe thunderstorms. And also we do
    something that we call false alarm rate which is frankly the
    number of times a day something is going to happen and it does
    not happen. So, our forecasts will be more accurate.
        It will give us the ability to control a number of radars.
    A simple forecaster can control a number of radars and there is
    a certain amount of manpower savings associated with that,
    about 69 manpower spaces.
        Mr. Rogers. And what will be the estimated total cost of
    development?
        General Kelly. That will be $25 million.
        Mr. Rogers. How necessary is it if we move forward quickly
    with that upgrade?
        General Kelly. In my opinion it is important that we move
    as quickly as we can. Number one, it will improve the accuracy
    and lead times on the most severe forms of weather which cause
    our citizens to have their lives and property to get damaged in
    the severe thunderstorms and the tornadoes.
        It would be good to save our manpower spaces.
        Mr. Gudes. And I think the other issue, Mr. Chairman, is
    the actual people that we have building the software, the team
    we have together, both private sector, the NOAA laboratories,
    in both our office of Oceanic and Atmospheric Research and the
    Weather Service. We have that team together and we need to move
    to building the next set of software and it will be difficult
    to re-put that team together.
        Mr. Rogers. But when the 4.2 is in place, we can then
    declare that AWIPS is a success, because Build 5 is an enhanced
    capability, is that generally correct?
        Mr. Gudes. Build 5 was in the initial specs of what the
    functionality of the system was to do. Build 4.2 allows us to
    transfer from AFOS and I guess to use a department of Defense
    term, initial operational capability for the system.
        I think that is probably an accurate way to describe it.
        Mr. Rogers. But when 4.2 is working, we can shut the old
    systems down, can we not?
        Mr. Gudes. AFOS, yes, sir, that is right.
        Mr. Rogers. Now, is Build 5 the last major upgrade that is
    being planned at this point?
        General Kelly. Again, not to get into a question of
    semantics, but I do not know how to define the next to last
    major upgrade. One certainly listens to our users and attempts
    to put it in place systems to satisfy the requirements that
    they state. The science community continually develops new and
    better methods to forecast weather.
        AWIPS will be the platform that we will attempt to use that
    new technology so would we call that major? Certainly we are
    not talking about another $550 million program. But are we
    talking about small dollars to certain technology? We will
    always try to improve the services of the Weather Service.
        Mr. Rogers. Well, I think we can all celebrate when 4.2
    goes on line.
        We have been waiting patiently, expensively waiting.
        General Kelly. That makes two of us.

                                   satellites

        Mr. Rogers. Now, I want to talk about satellites. You are
    asking $4.3 million this coming year and $18 million overall
    for a new satellite project. I think you call it ACE Follow-on
    GEOSTORM?
        Dr. Baker. Yes, sir.
        Mr. Rogers. And you are asking for a $30 million increase
    for the Polar Convergence Program, a system that will
    eventually cost over $3 billion. And you are asking for
    continued funding for the current Polar and geostationary
    weather satellites. The overall budget request for these
    systems amounts to over $550 million.
        First, tell us about the new satellite project. What the
    need for it is, what the schedule is, why you need it, and the
    actual deployment schedule?
        Dr. Baker. Yes, sir.
        This satellite is a joint effort between NOAA, the Air
    Force and NASA to provide warnings of solar outbursts,
    outbursts of geomagnetic particles from the sun. They can have
    major disruptive impacts on the energy grid in the United
    States. We currently have a satellite at a million miles from
    the earth where we pay a relatively small amount of money to
    make sure that the data is continuous.
        And this gives us a one-hour warning of such solar
    outbursts. A new program proposed is a satellite positioned two
    million miles from earth and it provides a two-hour warning for
    these solar outbursts.
        Every 11 years there is a major increase in the number of
    solar storms or sun spots and the last time we had this was in
    1989. There was a major power outage, several billion dollar
    impact in Canada. We can expect the same thing to happen during
    the year 2000 because we have another solar cycle with a
    maximum of solar storms. We have the system out there now at
    one million miles giving us a one-hour warning.
        This system is designed to give us a two-hour warning and
    as I say it is jointly sponsored by Air Force and NASA who also
    need this information both for astronauts and for communication
    satellites.
        Mr. Rogers. So, are you sharing it in thirds?
        Dr. Baker. No, the cost for the first Geostorm Satellite
    will be 25% from both NOAA and USAF and 50% from NASA.
        Mr. Rogers. And what kind of time table are you on for
    that?
        Dr. Baker. This, I believe, is like 2002, which is when
    this satellite would actually be flown.
        Mr. Rogers. Now, for the Polar Convergence Program the
    schedule has slipped, I think, at least a year to 2009, if I am
    not mistaken.
        Dr. Baker. We have adjusted the schedule to fit the
    lifetime of the satellites. We have done this, I hope, in very
    close consultation with the staff here and the staff at OMB and
    together our two agencies, Air Force and NOAA, so, that we are
    providing a cost-effective program with, I believe, first
    satellite availability in 2008, at this point.
        This, as you know, is a joint program that replaces the
    current older satellite program which involves 4 satellites. We
    are now going to 2 satellites instead of 4, with the set of
    instruments being flown by the Europeans. So, we think we have
    found a cost-effective way of replacing a very expensive
    system. It is expensive. I do not deny that. But it is a lot
    cheaper than what had been originally planned until we came in
    and did this convergence program.
        And we have tried to stay very much on top of the costs so
    that as we see satellites' lifetime growing, we have been able
    to adjust those costs and come in with what I think is the
    proper cost for this program.
        Mr. Rogers. I am told the launch would be 2009?
        Mr. Baker. Well, the availability, the first availability
    is 2008. And then if necessary we would launch in 2009. This is
    an operational system. You never know when a satellite is going
    to die. You have to have one available. We try not to make it
    available too soon, but I cannot give you an exact time and
    exactly when you would fly it because if the satellites are
    working fine we are going to hold that on the ground until we
    need to do it.
        But we try to adjust that to make the best cost-effective
    system.
        Mr. Rogers. But the development costs request is up by $30
    million over the current year's level, correct?
        Dr. Baker. That is the current funding profile that we have
    as we move into the mode of starting to build the satellites,
    we have to start spending more money.
        Mr. Rogers. What is the minimum level of funding that would
    be required to keep development on the time frame that you have
    articulated?
        Dr. Baker. This is the minimum. This is a number that we
    have very carefully vetted throughout the system. The only
    reason that one changes this number, as we have changed in the
    past, is the assessment of risk in the system for the length of
    life of the time of the satellites flying.
        We try to incorporate that into exactly what we should
    build and when we should build it. Remember, with an
    operational system, if a satellite dies, we must fly a
    replacement satellite, otherwise, there is no weather
    information.
        And, so, we are driven by that and we have to balance those
    two things. We have some very elaborate mathematical models
    that the Air Force has developed over the years for operational
    systems. We use those to make that decision.

                          operational systems priority

        Mr. Rogers. Now, we need you to give us your priorities
    with respect to the funding for the ongoing weather satellites
    versus increased funding for Polar Convergence versus funding
    for the new GEOSTORM System, in case we can't find all the
    money you would like.
        Dr. Baker. Well, certainly, we will always put the priority
    for the existing operational system and its continuation will
    always be the highest priority for us because that is our
    central responsibility I think.
        Mr. Rogers. What would come next?
        Dr. Baker. What?
        Mr. Rogers. What would come next?
        Dr. Baker. Then new things.
        Mr. Rogers. Which ones?
        Dr. Baker. The GEOSTORMS, for example, would come after
    that.
        Mr. Rogers. And then Polar Convergence?
        Dr. Baker. No. Well, we have to have the current system and
    the Polar Convergence because if we do not pay for those
    satellites today, they will not be ready in 2008. So this is a
    critical piece of our budget, and I will always put it right up
    at the top of our priorities, regardless of other programs.
        Mr. Rogers. So you would chuck everything else to get these
    three things.
        Dr. Baker. We have always said that providing the basic
    operational services of NOAA is our highest priority.
    Completing modernization of the Weather Service and base
    funding for Weather Service, and satellites that are necessary
    for the Weather Service are always at the top of our priority
    list.
        Mr. Rogers. Well, I sympathize with you somewhat because
    these satellites costs, I know, are subject to change, and
    things are out of your control, but we would like to be kept
    informed of the cost estimates, as we go along, so we can make
    our plans as well. So can you help us keep up with it?
        Dr. Baker. We can do it.

                        pacific coastal salmon recovery

        Mr. Rogers. On the proposal to create a new $100-million
    Pacific Coastal Salmon Fund, let me ask you a few basic
    questions and try to flesh out some of the very sketchy
    information that is in the budget request. What is the level of
    funding provided for all salmon programs in the current year
    budget?
        Dr. Baker. I am going to just check to see if we have a
    number for that for NOAA or for the Federal Government.
        [Pause.]
        Dr. Baker. Currently, Mr. Chairman, in NOAA, we are
    spending about $147 million on salmon, and we spend $373
    million on all other fisheries in our Fisheries Service. That
    is the breakout for the 2000 budget.
        Mr. Rogers. No, I am talking about 1999, for this current
    year.
        Mr. Baker. The 1999 number would be $100 million less,
    roughly. Do we have the 1999 number? We do not have the 1999
    number. We will provide that for you.
        Mr. Rogers. Provide that for us. I think it is in the $40-
    to $50 million range.
        Dr. Baker. That would be approximately right, I think.
        [Clerk's note.--Subsequent to the hearing, the following
    information was provided:]

                  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Rogers. And what is the level of funding provided for
    all salmon programs provided throughout the Federal Government
    for the current fiscal year, 1999?
        Dr. Baker. We can provide that number for you. I think it
    is--I have to be careful about not giving an incorrect number--
    but it is at least half a billion dollars. We will provide that
    for you, Mr. Chairman, right away.
        [Clerk's note.--Subsequent to the hearing, the following
    information was provided:]

        Response. At present, NOAA spends $69,590,000 on salmon in
    FY 1999 and proposes to spend $181,330,000 in FY 2000. We are
    also aware of estimates by the U.S. Fish and Wildlife Service
    in its annual report to Congress on ESA only-related
    expenditures. For FY 1995 the amount of total Federal funding
    for ESA-listed slamon was $118,626,170. For FY 1996, draft
    findings total $113,431,100. NOAA will work with the Office of
    Management and Budget to compile a consolidated amount. For
    example NOAA is aware that efforts of the Department of
    Agriculture, the Interior, the Environmental Protection Agency
    and Corps of Engineers affect and promote salmon recovery.

        Mr. Rogers. See, that is my point. No one knows what we are
    spending on salmon throughout the Government. There is no
    coordination of Governmentwide programs for coastal salmon runs
    and for the Columbia River Basin, I do not think, is there? If
    you do not know, nobody knows in NOAA.
        Now, you are also requesting an additional $23 million
    under the Endangered Species Program to, among other things,
    hire over 120 additional personnel for NOAA's Northwest
    Fisheries Office to handle the workload that will come from
    NOAA being a participant in just about any development project
    in that region that will now impact watersheds throughout the
    Northwest. Is that the full requirement of additional personnel
    that would be required by the salmon listings or is that just
    the first installment?
        Dr. Baker. Mr. Chairman, I think the experts who have
    looked at this, and there are many, cannot give you an answer
    to that question at the moment. As you know, we are spending a
    lot of money on salmon. We are getting very desperate requests
    from states, including the four states that we have listed
    here. There are other states that have endangered species of
    salmon. We know that to restore the salmon requires study of
    the habitats and the commercial fishery, recreational fishery,
    all of the different aspects that are involved. This could well
    be just a down payment on a larger program, and I think it is
    something that we all have to recognize and somehow come to
    grips with. It is a difficult problem.
        Mr. Rogers. Is this something that you requested of OMB,
    this $100 million?
        Dr. Baker. I am just trying to think of the chain here. We
    have continually requested of OMB additional funding to address
    salmon issues. We were approached by the states who said that
    they needed on the order of $300 million and we were able to
    come up, working with the administration, a number that was
    $100 million.
        Mr. Rogers. Well, but you requested zero. You had a zero
    request in to OMB for Pacific Coastal Salmon Recovery.
        Dr. Baker. In our original budget submission, yes, that is
    right. That is correct. Yes.
        Mr. Rogers. And it was added by OMB.
        Dr. Baker. Yes, but it was not added by OMB in opposition
    to something that we wanted to do. I think our view has always
    been you need to do more here. So this is something that--it
    was certainly not without our blessing. Let me put it that way.
        Mr. Rogers. It must not be too important to you then.
        Dr. Baker. Well----
        Mr. Rogers. You did not ask for it.
        Dr. Baker. Sometimes things are important, but we think
    politically it is not going to happen with our interactions
    with the administration. I think the salmon problem is a
    particularly difficult one.
        Mr. Rogers. Give me a break. You did not ask for it. It is
    not important to you. It was added by the OMB. That is a simple
    answer, yes or no?
        Dr. Baker. I do not think I would say that, and I do not
    like to disagree with you, Mr. Chairman. But in this case, we
    all recognize that the salmon problem is a huge problem. It
    needs to be addressed. It is important appropriations, and when
    the administration said they felt that they could come up with
    additional funding, we supported that point of view. Sometimes
    OMB takes away or adds things that we do not think are
    appropriate. But in this case, we did not think this was an
    inappropriate thing to do. And had we thought that there was an
    opportunity to add $100 million to our budget for salmon, we
    would have put it in, in the first place.
        Mr. Rogers. Well, should we take the $100 million for
    salmon out of the Geostorm Satellite Program, do you think?
        Dr. Baker. As I said, we are certainly willing to talk to
    you about priorities and how we work the budget. But this is a
    very important topic.
        Mr. Rogers. General Kelly, is that okay? [Laughter.]
        General Kelly. If it is okay with him.
        Mr. Rogers. If it is okay with you. If you give the okay,
    we are in business here. [Laughter.]
        General Kelly. I have to defer to my boss.

                          coastal salmon recovery plan

        Mr. Rogers. Is there an overall recovery plan in place for
    coastal salmon?
        Dr. Baker. We have a recovery plan which is a plan in
    progress. This is something that we work on continually.
        Mr. Rogers. I will take that as a no.
        Dr. Baker. Well, I think it is wrong to say there is no
    plan. We have been working on recovery efforts for a long time,
    and we have the pieces of a plan in place.
        Mr. Rogers. I am going to ask you----
        Dr. Baker. Whether that plan will recover the salmon, I
    cannot answer.
        Mr. Rogers. I am going to ask you what I asked the Census
    director. Where is your plan? Let me see your plan.
        Dr. Baker. Well, we can lay a plan on the table for salmon
    recovery.
        Mr. Rogers. Where is it?
        Dr. Baker. Well, we have that. It is what we are working to
    between NOAA, and the states and the Department of Interior. We
    are working on all of the different areas, and we can show you
    that plan. We have that plan.
        Mr. Rogers. I would like to see it.
        Dr. Baker. We can provide it.
        [The information follows:]

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        Mr. Rogers. Now, will you provide for us a list of the
    projects that will be funded by that program?
        Dr. Baker. At the moment, you are talking about the $100
    million program.
        Mr. Rogers. Yes.
        Dr. Baker. The states have asked us to work with them to
    develop such a list. We do not yet have such a list of
    projects. We can only give you candidate projects because the
    states have said they would like to identify what specifically
    needs to be done working with us. But this was something that
    came up as a----
        Mr. Rogers. Well, that is very nice of the states. But
    before we appropriate the monies, I think we have the
    obligation to satisfy our constituents that the money that
    would be spent will be spent in the most appropriate way, not
    the states. If the states want to do something, they can spend
    their money. This is Federal money we are talking about. And
    before we appropriate any monies, we have got to see the plan.
    We have got to see the projects. We have got to know where it
    is going, and if that is the most appropriate way to go.
    Because we have got to pick and choose. We are out of money,
    big time.
        Is this a one-year program or an ongoing thing?
        Dr. Baker. The current plan is that this would be an
    ongoing program.
        Mr. Rogers. How much of the funds would each state get then
    and Indian tribes?
        Dr. Baker. I think the current plan is that it would be
    split equally among the states, the four states that are
    involved. Let me just check to make sure that is correct.
        It would be split 50/50 with the tribes? No. A portion goes
    to the native tribes, and the rest is split equally among the
    four states.
        Mr. Rogers. How much is going to the Indian tribes?
        Dr. Baker. What is the proportion?
        It is 10 percent is the current estimate.
        Mr. Rogers. The current estimate?
        Dr. Baker. Yes. I think that is the best I can say about
    what I can hear back here.
        Mr. Rogers. I do not think there is much of a plan here, in
    spite of what you say.
        Well, that is another $100 million we have got a problem
    with. So that leaves us with $98.35. What do you think?
    [Laughter.]

                                buyout programs

        And, finally, let me ask you about the New England Scallop
    buyout: $8.32 million for a buyout of the New England Scallop
    Fishery; 20 percent funded by a direct Federal contribution and
    80 percent by guaranteed loans to be repaid by the industry.
        The Magnuson-Stevens Act clearly contemplates buyout
    programs that are either fully funded by industry or else fully
    funded on a guaranteed basis with the Federal Government liable
    for a very small subsidy amount to cover any loss the program
    might encounter. This is the first that I am aware of, where
    the Federal funds are being used for this purpose.
        Is there any reason why any future buyout proposal should
    not be financed either entirely by industry or on a guaranteed
    basis without the need for a large direct Federal contribution?
        Dr. Baker. Let me ask the Fisheries Director.
        [Pause.]
        Dr. Baker. The initial answer was that we have done a
    number of buyouts already that were fully-funded.
        Mr. Rogers. By industry.
        Dr. Baker. No, by the Federal Government. We have done that
    already.
        Mr. Rogers. Well, on an emergency----
        Dr. Baker. And this is an attempt to move down.
        Mr. Rogers. On an emergency basis, yes.
        Dr. Baker. Yes, but we did it. And this is an attempt to
    move to a lower amount. Most of this is the Federally
    guaranteed loans, and then there is a smaller part that is the
    direct Federal funding.
        Mr. Rogers. Why can we not go to a fully guaranteed basis?
        Dr. Baker. Let me just ask if that is our direction that we
    would like to go?
        This is the Director of Fisheries, Penny Dalton.
        Ms. Dalton. The model that was used was the American
    Fisheries Act, and it provided for the same ratio. There is a
    20-percent Federal funding for it and 80-percent industry
    funded for the loan guarantees.
        Mr. Rogers. Well, that is the Alaska pollack buyout. That
    is the only one that I am aware of.
        Ms. Dalton. That they used this ratio of 20 to 80, yes. All
    of the other ones have been fully-Federally funded.
        Mr. Rogers. On a disaster, those were disasters, correct?
        Ms. Dalton. Commercial fisheries failures.
        Mr. Rogers. What I am saying scallops are getting a
    disaster loan. So this is the, except for the Alaska pollack
    fishery buyout, which was this year, this is the only one,
    other than disaster buyouts, correct?
        Dr. Baker. That is correct.
        Mr. Rogers. Mr. Serrano?
        Mr. Serrano. We are running out of time. We have two
    minutes on the vote.
        Mr. Rogers. Thank you very much, Dr. Baker.
        Mr. Serrano. If I may, Mr. Chairman, for just a second.
        If I could get you to get back to us, I am very curious
    about the whole satellite issue, how that works. You have one a
    million miles out. You want to put another one two million
    miles out. Dumb question: Why can you not move the one that is
    up there, somewhere else? [Laughter.]
        [Clerk's note.--Subsequent to the hearing, the following
    information was provided:]

        Currently, the Advanced Composition Explorer (ACE)
    satellite is in orbit one million miles out between the Earth
    and Sun, which is the farthest possible using conventional
    propulsion systems. ACE provides a 1 hour advance warning of
    severe solar activity to utilities, telecommunications, and
    other customers. The present ACE system has been in place since
    August 1997 and has a goal life span of 5 years (1997-2002)
    which is when GEOSTORM would launch.
        NOAA customers have become reliant on this unique data
    stream, and have demanded that NOAA make an ACE follow-on
    system our number one space weather priority. The requested
    GEOSTORM program is a follow-on to the aging ACE and will use a
    new propulsion system to allow it to reach an orbit twice as
    far from Earth, thereby doubling the warning lead-time.

        Mr. Serrano. So let me know about that. If you want to help
    out with the Clean Water Initiative that the administration has
    in place, what role would you play in that?
        [Clerk's note.--Subsequent to the hearing, the following
    information was provided:]

                         NOAA's Clean Water Initiative

                                   ocean 2000
    $22 Million in FY 2000
        NOAA's FY 2000 $22 million request, an increase of $5.8 million in
    new funding, will provide the financial assistance necessary for
    coastal states to develop and implement programs to control polluted
    runoff from agricultural areas, city streets, and other sources. This
    funding will also support the research and monitoring essential to
    finding the sources and solutions to the spread of harmful algal
    blooms, such as Pfiesteria, often associated with polluted coastal
    waters. NOAA's Clean Water Initiative is a modest investment to help
    restore and protect our valuable coastal waters that support billions
    of dollars of economic activity every year through tourism, recreation
    and commercial fishing.
    Control of harmful algal blooms--$9.0 million
        Polluted runoff often carries large amounts of nutrients that can
    contaminate coastal waters. Harmful algal blooms (HAB's) are often
    associated with high levels of nutrient pollution. This funding, an
    increase of $1.8 million under this initiative, will allow NOAA and its
    academic partners to continue to be leaders in the research,
    monitoring, and assessment of HAB's to better predict and prevent HAB
    events. The requested funds will support partnership efforts that
    include: interagency cooperation through the ECOHAB research programs
    to develop models for forecasting the development and impacts of HABs;
    strengthening NOAA-state partnerships for improving HAB monitoring and
    assessment capabilities; development of capabilities to assist states
    in responding quickly to HAB events; and research on the linkages of
    coastal euthrophication, HABs, and hypoxia/anoxia to nutrient loads in
    coastal ecosystems.
    State parternships to reduce polluted runoff--$12.0 million
        $12 million in FY 2000, an increase of $4 million, will provide
    coastal states with funding to fully develop and implement their
    Coastal Nonpoint Pollution Control Programs. This will significantly
    improve their ability to manage polluted runoff and reduce coastal
    water pollution. NOAA administers the Coastal Nonpoint Pollution
    Control Program in partnership with states that have approved Coastal
    Zone Management (CZM) programs. The requested funds will support State
    efforts to reduce polluted runoff, as follows: $6 million, an increase
    of $2 million from FY 1999, for grants to CZM states for development of
    coastal runoff control programs. By FY 1999, twenty-nine CZM states
    will have approved Coastal Nonpoint Control Programs, though certain
    portions of these programs need further development. In addition, four
    states that have either recently or will soon join the Coastal Zone
    Management program (Texas, Georgia, Ohio, Minnesota) need resources to
    fully develop approvable Coastal Nonpoint Programs. $6 million, an
    increase of $2 million from FY 1999, for CZM Section 306/309 grants to
    CZM states for implementation of their coastal runoff control programs.
    These grants will allow coastal states to implement on-the-ground
    management measures, and leverage other state and local resources, to
    control the flow of polluted runoff into coastal waters.
    Protect and restore our coastal resources--$1.0 million
        $1 million in FY 2000 will reduce the flow of pollutants from
    hazardous waste sites into our coastal waters. NOAA's Coastal Resource
    Coordination program works at hazardous waste sites to protect and
    restore coastal resources and their habitats, including the water and
    sediments necessary to support a healthy ecosystem. The request will
    enable NOAA to address a broader range of waste sites and provide
    critical technical assistance to States and communities, improving the
    health of our coastal waters and the resources they support. The
    requested funds will enable NOAA to: work with EPA and other agencies
    to assess ecological risk and develop protective cleanups strategies at
    hundreds of coastal waste sites each year; address a broader range of
    sites, including state-lead cleanups, military and active industrial
    facilities, and solid waste sites that are polluting our coastal
    waters; and provide more technical assistance to States and communities
    impacted by hazardous waste and Brownfields sites.

        Mr. Serrano. And if you could also tell us about your plans
    for NOAA's infrastructure, rather than keep you around for a
    long time.
        Dr. Baker. We will do that.
        [Clerk's note.--Subsequent to the hearing, the following
    information was provided:]

        Our infrastructure supports operational and research missions
    ranging from the sea floor to beyond the atmosphere and includes ships,
    aircraft, and more traditional facilities. The level of technology
    presently includes 1950's paper tape rain gauges to the most advanced
    supercomputers supporting weather and climate modeling.
        In order to meet our mission requirements now and in the future, we
    must invest in and maintain our infrastructure. The FY 2000 budget
    request includes essential funding to continue investments in NOAA's
    infrastructure, including investments in our people. Most notably, the
    budget request:
        Includes funding to address our data acquisition needs by providing
    for the first of four new Fisheries Research Vessels (FRVs), while at
    the same time increasing the number of days-at-sea by 245 for
    University-National Oceanographic Laboratory System (UNOLS) ship time
    for critical data collection needs for the Global Ocean Ecosystem
    Dynamics (GLOBEC) and Ecology and Oceanography of Harmful Alagal Bloom
    (ECOHAB) programs.
        Provides funding to maintain our supercomputing capacity at the NWS
    Central Computing Facility in Suitland, Maryland, and the Forecast
    Systems Lab (FSL) in Boulder, Colorado while acquiring a massively
    parallel, scalable computer to be located at OAR's Geophysical Fluid
    Dynamics Lab (GFDL), in Princeton, New Jersey.
        Provides increased recurring lease and/or operations costs at a
    number of NOAA facilities coming on-line in FY 1999 and FY 2000, such
    as the Santa Cruz and Kodiak Fisheries Laboratories, the Marine
    Environmental Health Research Laboratory in Charleston, South Carolina
    and the David Skaggs Research Center in Boulder, Colorado. At the same
    time funds are requested to complete the planning and design of a new
    state-of-the-art NMFS research facility near Juneau, Alaska.
        Provides adjustments-to-base for pay related and inflationary cost
    increases to the National Weather Service, as well as for the FY 2000
    pay raise for the remaining Line Offices.
        Includes funds to begin replacing outdated observing equipment in
    order to maintain continuity of core data and services and provides
    funds for continuing technology infusion for systems developed for the
    Weather Service Modernization;
        Reflects the Administration's plans to restructure and maintain the
    NOAA Corps and includes Payments for Retired Pay for Commissioned
    Officers as mandatory funding;
        Includes $1.0 million to establish educational training
    relationships through a joint partnership with a consortium of
    Historically Black Colleges and Universities (HBCU). These efforts
    would not only result in the education of new marine, atmospheric and
    environmental scientists, but would also assist many coastal
    communities in the development of new business and environmental
    engineering alternatives to support sustainable economic development;
    and,
        Provides funds to accelerate the implementation of the Commerce
    Administrative Management System (CAMS), which is critical to meeting
    NOAA's financial management requirements.

        Mr. Rogers. Thank you very much for all of your testimony,
    and the rest of your staff here.
        Dr. Baker. Thank you very much.

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