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


                 DEPARTMENTS OF LABOR, HEALTH AND HUMAN

               SERVICES, EDUCATION, AND RELATED AGENCIES

                        APPROPRIATIONS FOR 2001

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION
                                ________

  SUBCOMMITTEE ON THE DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, 
                    EDUCATION, AND RELATED AGENCIES

                 JOHN EDWARD PORTER, Illinois, Chairman

 C. W. BILL YOUNG, Florida          DAVID R. OBEY, Wisconsin
 HENRY BONILLA, Texas               STENY H. HOYER, Maryland
 ERNEST J. ISTOOK, Jr., Oklahoma    NANCY PELOSI, California
 DAN MILLER, Florida                NITA M. LOWEY, New York
 JAY DICKEY, Arkansas               ROSA L. DeLAURO, Connecticut
 ROGER F. WICKER, Mississippi       JESSE L. JACKSON, Jr., Illinois
 ANNE M. NORTHUP, Kentucky          
 RANDY ``DUKE'' CUNNINGHAM,         
California                          

 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.

           S. Anthony McCann, Carol Murphy, Susan Ross Firth,
             and Francine Mack-Salvador, Subcommittee Staff
                                ________

                                 PART 5

                         DEPARTMENT OF EDUCATION
                                                                   Page
 Secretary of Education...........................................    1
 Vocational and Adult Education...................................  131
 Educational Research and Improvement.............................  167
 Office of Postsecondary Education/Office of Student Financial 
Assistance........................................................  219
 Howard University................................................  275
 Gallaudet University.............................................  275
 Special Institutions for the Disabled (Panel)....................  311
 Special Education and Rehabilitative Services....................  339
 Elementary and Secondary Education, Bilingual Education and 
Minority Languages Affairs........................................ 409,
                                                                    443
 Departmental Management Panel (DOE, HHS, DOL, RRB, SSA)..........  523
 Inspectors General Panel (DOE, HHS, DOL, RRB, SSA)............... 1493
                                ________

         Printed for the use of the Committee on Appropriations
                                ________

                     U.S. GOVERNMENT PRINTING OFFICE
 64-385                     WASHINGTON : 2000

                       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                 MICHAEL P. FORBES, New York
 RODNEY P. FRELINGHUYSEN, New Jersey    CHET EDWARDS, Texas
 ROGER F. WICKER, Mississippi           ROBERT E. ``BUD'' CRAMER, Jr., 
 GEORGE R. NETHERCUTT, Jr.,             Alabama
Washington                              MAURICE D. HINCHEY, New York
 RANDY ``DUKE'' CUNNINGHAM,             LUCILLE ROYBAL-ALLARD, California
California                              SAM FARR, California
 TODD TIAHRT, Kansas                    JESSE L. JACKSON, Jr., Illinois
 ZACH WAMP, Tennessee                   CAROLYN C. KILPATRICK, Michigan
 TOM LATHAM, Iowa                       ALLEN BOYD, Florida
 ANNE M. NORTHUP, Kentucky              
 ROBERT B. ADERHOLT, Alabama            
 JO ANN EMERSON, Missouri               
 JOHN E. SUNUNU, New Hampshire          
 KAY GRANGER, Texas                     
 JOHN E. PETERSON, Pennsylvania         
 VIRGIL H. GOODE, Jr., Virginia     

                 James W. Dyer, Clerk and Staff Director

                                  (ii)

 
DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, EDUCATION, AND RELATED 
                    AGENCIES APPROPRIATIONS FOR 2001

                              ----------                              

                                           Thursday, March 9, 2000.

                        DEPARTMENT OF EDUCATION

                               WITNESSES

RICHARD W. RILEY, SECRETARY
THOMAS P. SKELLY, DIRECTOR, BUDGET SERVICE

                       Chairman's Opening Remarks

    Mr. Porter. The subcommittee will come to order.
    We begin our hearings on the appropriations for the 
Department of Education this morning, and we are very pleased 
to welcome Secretary Richard Riley for his eighth appearance 
before our subcommittee. He just reminded me that it is for 
sure my last, and probably his as well.
    I must say, Mr. Secretary, it has been throughout a great 
pleasure to work with you. You are, we believe, one of the 
finest members of the President's Cabinet and respected on both 
sides of the aisle, and we share very greatly the commitment to 
improving the education systems of our country, and you have 
done an excellent job there. I just wanted you to know that.


                         PERFORMANCE STANDARDS


    I want to begin, as I did last year, with a brief comment. 
Again, the Department is making admirable progress on 
developing and applying performance standards under the 
Government Performance and Results Act. I know many, many 
people in the Department have worked hard to make these a 
reality, but I especially want to acknowledge the outstanding 
contributions of Dr. Alan Ginsburg and his staff in the 
Planning and Evaluation Service for their work on GPRA. I hope, 
Mr. Secretary, that you are beginning to employ these measures 
in your management of the Department, and I hope we can 
continue to work together to refine this process into a 
management tool that will be useful both to you and to the 
Congress.


                      DEPARTMENTAL FINANCIAL AUDIT


    The committee also remains concerned about the disclaimer 
on the Department's fiscal year 1998 financial statement. As 
you may remember, this committee provided your and other 
departments with transfer authority and other flexibility based 
on the premise that the Department was making progress in 
achieving proper financial controls. It is important that the 
Department deal not just with the specifics of the audit but 
provide additional focus on upgrading financial management 
within the Department.
    Having said that, Mr. Secretary, we would be delighted to 
hear your opening statement, and if you would like to include 
addressing that issue in it as well, we would appreciate it.

                  Opening Statement of Secretary Riley

    Secretary Riley.  Mr. Chairman, if I might give my opening 
statement and submit my prepared statement for the record, then 
I will respond to your questions at the conclusion.
    I will join with your statement in saying what a pleasure 
it has been working with you, sir, as chairman of this 
important subcommittee for education. I really do sincerely 
think that your leadership has been significant, that you are 
dedicated to improving education, and it has been a pleasure 
working with you over the 8 years. I think I speak for all 
educators when I say that we hold you in very high esteem.
    Now, we have had minor differences, all of us. That is the 
nature of democracy. But we have always respected your view, 
and I think you have always respected the fact that we had a 
right to have a position.


                      COMPREHENSIVE SCHOOL REFORM


    But I think the Porter-Obey comprehensive school reform 
program is a very good example of bipartisanship. I think we 
need more of it when it comes to improving education. I thank 
you, Mr. Chairman, I thank Mr. Obey in his absence, and the 
other fine members of your subcommittee.


        CONSENSUS ON RAISING ACHIEVEMENT THROUGH HIGH STANDARDS


    As we begin this new century, I believe that American 
education is headed in the right direction. We have a long, 
long way to go, and that is to be sure, but I honestly believe 
we are moving forward. We have a very decentralized system of 
education, and developing a broad-based consensustakes time.
    But a new American consensus is now firmly in place in all 
50 States when it comes to raising achievement levels through 
higher standards. The American people have made it absolutely 
clear that they are behind our efforts to improve public 
education. They believe in public education, and they are 
unwilling to abandon it. They are not listening to the nay-
sayers who say that public education is broken and cannot be 
fixed.
    As I always try to remind people, this Nation has the best 
system of higher education in the world, and the vast majority 
of students who attend the very best of our Nation's 
universities and colleges are public school graduates. Public 
schools are doing some things that are right, and I think that 
is clear.

               ``THE GOOD NEWS ABOUT AMERICAN EDUCATION''

    I see good things happening across America because of our 
sustained focus on raising achievement levels. That is why I 
would like to submit for the record a new report, and I think 
copies will be on your desks, from the Center on Education 
Policy entitled, The Good News About American Education.
    [Note: A copy of the publication ``The Good News About 
American Education'' was provided to the Subcommittee, and is 
included herein.]



                    RAISING STANDARDS YIELDS RESULTS

    Secretary Riley. This report tells us that if we continue 
to sustain our efforts to raise achievement levels it certainly 
pays off in the long run.
    As I travel around the country visiting schools, I see 
success starting to happen as much as I see schools that are 
still in need of great help to be turned around. I recently 
gave my annual state of the American education address at 
Southern High School in Durham, North Carolina. Two years ago 
this school was failing its students. The State had put the 
school on its low-performing school list. But within a year, 
with careful attention by the State, by the local school 
district, Southern got turned around with the arrival of a 
dynamic new principal, Henry Pankey. The school showed a 50 
percent increase in its achievement level and was cited by the 
State the very next year for its exemplary achievement.
    There are a lot of Southern high schools all across 
America, and there are thousands of schools that can benefit 
from the Southern example.

                      COMPREHENSIVE SCHOOL REFORM

    That is one reason why this budget includes $240 million 
for the Comprehensive School Reform Demonstration Program, an 
increase of $20 million. Our proposed increase would allow us 
to reach an additional 2,200 schools. I believe that this 
budget reflects the priorities of the American people--turning 
around failing schools, school safety, improving teacher 
quality, reducing class size, modernizing our Nation's schools 
and helping families pay for college.

                     FEDERAL AND STATE PARTNERSHIP

    I also believe that the American people are in a new 
position when it comes to how we improve education. I think 
they have moved beyond the current debate on Federal versus 
local control. Control must be on the State and local level. 
State responsibility is there for education, local function is 
where it happens, but the Federal Government certainly in this 
education era must support education and support national 
priorities.
    I think the American people want practical answers, and 
they are very specific in their expectations. They want local, 
State and Federal interests working together to create new 
partnerships, partnerships that include business, community 
groups, partnerships that jump bold boundaries to make things 
happen. The Federal Government is clearly the junior partner in 
all this, but still very much a partner.

               TOTAL DEPARTMENTAL FY 2001 BUDGET REQUEST

    One of the purposes of this budget is to encourage and 
support educational partnerships that get on with the business 
of fixing failing schools and improving education for all of 
our children. That is why we are requesting $40.1 billion, an 
increase of $4.5 billion, or 12.6 percent, over the fiscal year 
2000 spending. This budget continues our strong emphasis on 
improving accountability in Title I, reducing class size, 
improving teacher quality, modernizing our schools, and 
increasing after-school opportunities to help keep children out 
of harm's way.

                           SPECIAL EDUCATION

    This budget increases funding for special education, which 
deserves bipartisan support.

                  COLLEGE OPPORTUNITY TAX CUT PROPOSAL

    I remain very excited about the President's college 
opportunity tax cut proposal, and I think it can make a real 
difference.

                   TITLE I AND ACCOUNTABILITY GRANTS

    We are requesting $8.4 billion for Title I grants, and that 
includes $250 million for accountability grants, an increase of 
$116 million over the 2000 level.

                      CLASS SIZE REDUCTION PROGRAM

    Reducing class size makes a powerful difference. Parents I 
think are very tuned into the success of this effort. We are 
proposing to add $450 million to the Class Size Reduction 
program, for a total of $1.75 billion.

                   TEACHER RECRUITMENT AND RETENTION

    This budget includes $1 billion to support better teaching, 
with a strong emphasis on recruiting and retaining high-quality 
teachers. There is no single way to get the job done. We come 
at the issue from many angles.

                21ST CENTURY COMMUNITY LEARNING CENTERS

    One of the best ways to keep our children out of harm's 
way, though, is through positive after school experiences. They 
make such a difference in so many ways. That is why we are 
proposing a $547 million increase for 21st century community 
learning centers, more than doubling the funding to a total of 
$1 billion.

                      SCHOOL SAFETY AND DISCIPLINE

    School safety and discipline are very immediate. We do not 
need another Columbine. I go to bed every night, I am sure all 
of you do, thinking about the horrors of that. Young people 
need to have a strong sense of connection, and that is why we 
propose to scale up our small, safe and successful high school 
initiative by providing $120 million to help 700 high schools 
create schools within schools.
    Parents have an absolute laser-like focus on keeping their 
children out of harm's way, and the tragic death last week of 
Kayla Rolland, a Michigan first-grader, surely tells us we have 
to do more to keep guns out of the hands of children.

                          SCHOOL MODERNIZATION

    I also urge the Congress to pass our school modernization 
legislation. Many rural and urban school districts need help. 
Our modernization proposal now comes in two parts, and I think 
they are both worthy of your consideration.
    Here I want to put a strong emphasis on our new $1.3 
billion discretionary request to help school districts renovate 
and repair thousands of old schools that are in urgent need of 
repair. Too many of our school buildings are simply wearing 
out. They are old, they are overcrowded, they are showing an 
enormous amount of wear and tear.
    A recent report of the Benton Foundation noted the great 
success of the E-rate in getting technology into our Nation's 
schools. The very same report also noted, however, that the 
basic infrastructure of many older schools, including their 
electrical systems, are so outdated that they rank as a 
``majorproblem'' and ``undermine implementation'' of the E-rate, 
``particularly in our very poorest schools.''
    This budget continues our strong focus on technology in 
making sure that teachers really know how to use it to raise 
achievement levels. But all of our efforts to train teachers 
and get technology into the classroom will be of little use if 
we don't have modern buildings. So I urge Congress to pass 
school modernization legislation this year.

                         STUDENT FINANCIAL AID

    Let me conclude now with some comments on higher education. 
We are proposing a maximum Pell Grant award of $3,500, a $200 
increase over the 2000 level and up more than 50 percent since 
1994. SEOG and College Work Study would also receive 
substantial increases.

                  TRIO, GEAR UP AND TECH-PREP PROGRAMS

    The administration strongly supports the continued growth 
and expansion of TRIO and GEAR UP programs. We propose to 
invest $725 million in TRIO and $325 million for GEAR UP to 
help 1.4 million young people get ready for college.
    These two programs complement each other. Their continued 
expansion can help us over the long term to reduce the $500 
million that this Nation now spends on remedial education every 
year.
    Another new pathway to college is Tech-Prep, and we propose 
to almost triple its funding.

                 COLLEGE OPPORTUNITIES TAX CUT PROPOSAL

    The President's new 10-year, $30 billion ``College 
Opportunities Tax Cut'' proposal will be a significant help to 
working class families making under $43,000 and up to $120,000. 
Middle class parents with several children in college who are 
worried about rising student debt will also be helped 
tremendously by this. This targeted tax cut would provide up to 
$1,400 in 2001 and up to $2,800 in 2003 in tax relief for 
families.
    This college opportunity tax cut seems to be exactly what 
the American people are looking for when it comes to tax 
relief.

                 PREPARED STATEMENT OF SECRETARY RILEY

    Mr. Chairman, that concludes my testimony.
    [The information follows:]



             1998 AND 1999 DEPARTMENT FINANCIAL STATEMENTS

    Secretary Riley. Let me respond to your statement about the 
1998 audit. For 1998, OMB required some five statements instead 
of three. Because we had a shift in audit firms, the new audit 
firm that we have, Ernst & Young, that replaced PriceWaterhouse 
Coopers in 1998, got a late start.
    The Department was 5 months late then in producing these 
five statements. I will point out the auditor's report cited no 
instance of fraud, waste or misallocation of funds. The 1999 
opinion was on time and gave a qualified opinion on eight of 
ten consolidated financial statements. So we are very pleased 
to see that it is moving in the right direction.
    The ten statements included five additional statements 
required as of 1999 for the Office of Student Financial 
Assistance, a performance-based organization, so it is now five 
for the Department of Education and five for PBO. In the 1999 
audit, Ernst & Young gave qualified opinions on eight of these 
statements for the Department and the PBO. We have worked very 
hard to work with our accountants to move this in the right 
direction toward a clean audit, and I am comfortable that that 
is the direction it is moving in.

                     CHAIRMAN'S PROCEDURAL REMARKS

    Mr. Porter. Thank you, Mr. Secretary, both for your 
statement and the answer to that question. I know you take that 
matter very seriously.
    I want to inform members that we have two problems this 
morning. The first is that all Republican members of the 
Appropriations Committee have a meeting at 11:30, and we also 
are expecting a vote at 10:45 or 11 o'clock on the House floor. 
So we will operate under the 5-minute rule.
    Mr. Secretary, I would ask that you try to keep your 
answers as short and direct as you can so we can cover as much 
ground as possible in the limited time that we have available 
to us.

             STANDARDS-BASED REFORMS--IMPACT ON ACHIEVEMENT

    Mr. Secretary, for the past 10 years the education 
community has been in the process of implementing standards-
based reforms, and you have been, of course, at the forefront 
of that as the Secretary during most of that time.
    We have written that into our Elementary and Secondary 
Education Act, and we are about to reauthorize the ESEA. 
However, a recent survey released by Public Agenda found that 
standards have done little to change the way schools operate. 
Specifically, the study indicated that many schools have either 
not adopted changes supported by reformers or that teachers, 
students and parents lack information about them.
    That seems to fly in the face of the good news that you are 
proposing. If you look at outcomes, who is right? Are we 
getting better outcomes, or is the Public Agenda's finding 
true, that we haven't made very much progress?
    Secretary Riley.  Well, I think that report showed that in 
certain areas there was progress.
    I think it is really important, Mr. Chairman, to note that 
with the leadership of this subcommittee, and our hard work, 
and everybody working together, we have now developed a higher 
set of standards in every State in the Nation. I think that is 
a very helpful beginning in setting the standards movement in 
place.
    Then the next important thing is to get those standards 
down into the classroom, where they then enhance the 
achievement levels of the students themselves.

                          STUDENT ACHIEVEMENT

    Nationwide over these last 5 or 6 years, reading and math 
scores have been increasing, and that is pointed out in that 
``Good News'' report I mentioned. Also science achievement has 
increased over the years. SAT scores are up. ACT scores are up. 
Scores for fourth grade students in high poverty schools on the 
NAEP reading and math test increased by almost one grade level 
from 1988 to 1996.
    The proportion of high school graduates with 4 years of 
English and 3 years of science is up--and this is very 
important, kids taking those tough courses. One of the big 
reasons we do so poorly on the 12th grade tests is that still, 
not enough students are taking those tough courses. We do very 
well in math and science, as you know, on the TIMSS test in the 
fourth grade, about average in eighth, and then we drop in the 
twelfth. One of the key reasons is that our kids don't take the 
preparatory courses and then those tough courses in high 
school. That is really turning around, and I think that is 
getting across to young people.
    With the Advanced Placement tests, the number of AP scores 
meeting the requirements for college credit increased by more 
than one-third from 1994 to 1998, so I think we have a lot of 
goodindications. Again, the standards movement doesn't happen 
overnight. I think it has really had a tremendous impact in those early 
grades, and I think it is beginning to show up more and more in middle 
school and high school.
    Mr. Porter. Thank you, Mr. Secretary.

                   TEACHER RECRUITMENT AND RETENTION

    We hear a lot about the need to get new teachers and to 
reduce class size, and that has been the focus of the 
administration's initiative. But it is my understanding that 40 
percent of all new teachers leave the profession within 5 
years. That is a very appalling statistic. It seems to me that 
it is much cheaper to retain teachers than it is to find new 
ones all the time.
    What efforts has the Department undertaken regarding 
teacher retention, and do we have a specific goal in our 
standards and performance measures, to reduce that 40 percent 
loss to something much more reasonable and lower?
    Secretary Riley.  Well, you are right about that--over a 5-
year period some 40 percent loss. That is a real tragedy and 
one of the things we have got to try to turn around.
    Of the programs that we have proposed, of course, we made 
major proposals doubling the amount of money that would go to 
teachers in terms of professional development primarily for 
that, from $720 million to some $1.44 billion for teachers.
    The big thing would be making the working conditions much 
more appealing through smaller class sizes. We certainly are 
working to do that, especially for those early grades; 
professional development done in the right way that would be 
meaningful. We have a program, for $50 million which we 
propose, the Higher Standards, Higher Pay program, which looks 
at peer review programs that would be put in place. Qualified 
teachers would get an increase in salary. It is similar to the 
National Board Certification of teachers, and we also have $18 
million in here for that.
    The Hometown Teachers Program, which we propose for $75 
million, is a way to recruit young people into teaching, to 
motivate them to stay home to teach, which I think is very 
important, especially in rural areas. As I go into rural areas 
I hear that concern. Young people who are teachers are leaving 
to go to a more urban area.
    I think all of these things--the small schools, the models 
of the Porter-Obey comprehensive schools, all of those things--
make working conditions better, and this must be accompanied by 
more professional development.
    We also have to look though, Mr. Chairman, at teachers' 
pay. That has normally been a State and local responsibility, 
primarily a local thing, and State. I proposed recently--and I 
know you are trying to cut time short, but I will go into that 
later--looking at over the next 5 years making teachers full-
time, working 11 months out of the year, using those extra 
months for summer school for kids who need special help to 
reach high standards, and also for quality professional 
development, lesson plans, visiting with the families in the 
homes of young children and so forth.

              TEACHER RETENTION AS A PERFORMACE INDICATOR

    Mr. Porter. Am I correct that we don't have a performance 
measure for reducing retention?
    Secretary Riley. We don't have a particular percentage 
level.
    Mr. Porter. It seems to me it is something we ought to pay 
some real attention to.
    Secretary Riley.  I think that is a very good suggestion, 
and I will certainly take a look at that.
    Mr. Porter. Thank you, Mr. Secretary.
    Ms. Pelosi.
    Ms. Pelosi. Thank you very much, Mr. Chairman.
    I want to join you in your words of commendation to the 
very distinguished Secretary and thank him for his service in 
these hearings as the Secretary of Education and well before 
that as Governor of his State and really a lifetime commitment 
to improving education in our country.
    You said earlier, Mr. Secretary, that we have had our minor 
disagreements, and that is the basis of democracy, but also 
excellent public education is essential to democracy as well. 
So thank you all for what you are doing to strengthen our 
democracy as well as our education.

                TEACHER RECRUITMENT AND LOAN FORGIVENESS

    I am interested in the line of questioning of our Chairman, 
and I just wondered if I missed any comments about, this would 
not be in the retention, but in the attracting side of 
teachers. Any student loan forgiveness or anything like that to 
attract young people to the profession?
    Secretary Riley. Well, of course, the Higher Education Act, 
which was reauthorized a couple of years ago, in 1998, has in 
there some very significant help for young people who are going 
to teach in needy areas. We can provide for the record more 
information on these provisions. These provisions plus all of 
the efforts that I just mentioned with the Chairman deal with 
that subject.

                  Student Loan Forgiveness Provisions

    Benefits for the partial or total cancellation of a student 
loan are available to both Perkins and Stafford Loan borrowers 
who teach in schools receiving Title I assistance. Stafford 
Loan borrowers who are new borrowers after October 1, 1998, and 
have taught at a Title I school for at least five years are 
eligible for the forgiveness of a maximum $5,000 from their 
outstanding loan balance. Holders of Perkins Loans, regardless 
of the date of the loan, are eligible for an annual statutory 
percentage reduction of their loan from the first year they 
teach in a Title I school through the fifth year when 100 
percent of the loan is cancelled.

                          TEACHER RECRUITMENT

    The interesting thing about Goals 2000 is that it is 
reaching its goal of getting standards in all grades. Then 
shifting those funds to teachers we think is a very sound 
proposal. Tom, is there any other thing?
    Mr. Skelly. We have another effort called Troops to 
Teachers which would help encourage people in the military and 
other kinds of careers to move over into teaching. The Class 
Size Reduction initiative is a big one. Also, by providing 
additional funds for recruitment as well as funding salaries 
and professional development activities--all of these efforts 
should help with teacher recruitment and retention.

            SCHOOL MODERNIZATION AND THE ``DIGITAL DIVIDE''

    Ms. Pelosi. Thank you.
    I want to move on to the school modernization and your 
comments. You talk about the school renovation program and then 
about the initiative to complement the President'sschool 
modernization bonds proposal. Much has been said about the ``digital 
divide,'' and we have to be sure what it is, how we define it, so that 
we can cross it. But we need to have everyone cross it. Could you talk 
a little bit about the importance of the school modernization bonds 
proposal?
    I am interested for many reasons. Recent studies have 
demonstrated not only smaller classes but smaller schools are a 
better atmosphere for many children to thrive, as well as when 
we talk about the technology and the digital divide, it is 
remarkable the advance from the beginning of the President's 
term until now how many schools are wired. But we have to be 
assured they are all wired with the best possible and fastest 
access so that children will reap the benefits that others have 
in that.
    If you could just talk about the importance of the school 
modernization bonds.

              SMALL, SAFE AND SUCCESSFULL SCHOOLS PROGRAM

    Secretary Riley.  First of all, there is a proposal, the 
Small, Safe and Successful Schools program, that I made brief 
reference to, to help create smaller schools. These large, 
consolidated high schools--that was kind of the fashion 20 
years ago and even less, to build these big schools.
    Now the obvious trend is that young people need these 
connections. They need to know their teachers and know each 
other. So we do have a proposal in here for small, safe schools 
for $120 million, I think, to look at ways to provide 
competitive grants to divide schools up into schools-within-
schools. And that can be done with some design work and so 
forth. So it really goes to that issue in a very significant 
way.

                  SCHOOL MODERNIZATIAON BONDS PROPOSAL

    Now, the school bond proposal would provide some $25 
billion for schools throughout the country, bonds for schools, 
with the Federal Government--through the tax credit process--
picking up the interest on the bonds. So it would mean a 
significant amount of money, for example, to California, 
probably 11 or so percent of that.

                       SCHOOL RENOVATION PROGRAM

    Then the proposal here, the new proposal for the School 
Renovation program, a loan and grants program which is in the 
discretionary budget, would be for very needy schools, where 
really people probably couldn't pass a bond issue. I know 
California had an issue that I recall. But this would be for 
real needy schools, to help them with grants and loans, 
primarily loans, low-interest rate loans, to build--not to 
build new schools but to renovate schools that are there, to 
get them where they can be wired for technology, can be safe 
and so forth.
    Ms. Pelosi. And hopefully attract better teachers.
    Secretary Riley.  Yes, all of that attracts better 
teachers.
    Ms. Pelosi. My time has expired. Thank you so much, Mr. 
Secretary, for your service and testimony.
    Mr. Porter. Mr. Bonilla.
    Mr. Bonilla. Good morning, Mr. Secretary.
    I was glad to hear in your opening remarks, and I listened 
very carefully, to you emphasizing the need to keep control in 
local hands and the hands of the State, and even publications 
like, back home, the San Antonio Express News, that doesn't 
usually agree with me on much, editorialized recently--it says, 
if Clinton wants to help, he would leave dollars for education 
with the States to determine how to best spend them.
    So I guess a lot of the questions that you will probably 
hear this morning will relate to that.

               PROPOSED PROGRAMS AND PROGRAM ELIMINATIONS

    One of the concerns that I have is existing programs versus 
new programs. In your written testimony, we went through it, 
and you mentioned the words ``new program'' 10 times. How many 
new Federal education programs are included in the President's 
budget, and what is the overall total of their cost?
    Secretary Riley.  Well, there are new programs, 20 new 
programs, and then we eliminate 19 existing programs, so there 
is a net increase of one program.

                    GEAR UP PROGRAM AND TRIO PROGRAM

    Mr. Bonilla. One of the new programs that the President 
proposed in 1998 is the GEAR UP program. I don't take issue 
with what the goal of the program is, because obviously we want 
these people, even at a younger level that TRIO has not 
addressed before, to also be encouraged to stay in school and 
go to college. But my concern is that TRIO could have done this 
had it had the resources to do it in the first place.
    So we have limited dollars. Instead of trying to reinvent 
the wheel with GEAR UP, and having seen the great success of 
the TRIO program, I wonder why we shouldn't be supporting the 
programs that work rather than trying to again reinvent the 
wheel? So the current funding levels allow TRIO to serve 10 
percent of eligible students. Do you think that $80 million 
more for TRIO is actually enough?
    Secretary Riley.  Well, I strongly support the TRIO program 
and what it does.
    Mr. Bonilla. I do, too. I hope I am coming across clearly.
    Secretary Riley.  You are. I understand that.
    The idea of the GEAR UP concept really complements what 
TRIO is doing very well. TRIO deals with individuals, primarily 
high school and college kids. One of the programs we have in 
the student support services program is the College Completion 
CHALLENGE GRANTS proposal, for $35 million, which addressess 
completion by poor kids, and is designed help them get through 
college. Most poor kids that drop out of college say it is 
because of money reasons. So we are proposing to enhance what 
TRIO does and to expand it.
    GEAR UP, of course, deals with an entire school, a poor 
middle school connected with a college or university and also 
other partners all around in the community, and those kids then 
are tutored and mentored and counseled and advised all through 
the middle school and high school period on into college on how 
to get ready for college.
    Mr. Bonilla. I understand that. Why couldn't we have simply 
given TRIO the responsibility of doing a GEAR UP type program, 
rather than starting another program?
    Secretary Riley.  Well, that could have been done, but we 
felt like it was very important to have the GEAR UP program, 
which was a different kind of concept. It was a connection 
between a university and a middle school, instead of the very 
high quality work that TRIO does.
    Mr. Bonilla. I understand that. I guess maybe you are 
agreeing with me that maybe that should have been looked at in 
the beginning because of the great success TRIO had and also, 
for the amount of money spent on each student they get a heck 
of a lot of return. We would have been assured the GEAR UP 
program, whatever we call it under TRIO, would have the same 
return.
    I have one final question before my clock expires here.

               FFEL AND DIRECT LOAN STUDENT AND PROGRAMS

    The Federal Government alone cannot operate the student 
loan business effectively. Again, the President seems to be 
turning away from programs that work and towards programswhich 
increase the Federal bureaucracy.
    The Federal Family Education Loan Program with private 
sector influence is a program that works, and it is preferred 
by students across the country. In fact, in Texas this program 
provides over 70 percent of the State and Federal aid allocated 
to Texas college students.
    Your Department has committed on several occasions to 
supporting both Federal student loan programs. So my question 
is, why does the President's budget cut the FFEL program in 
half if it is serving so many students and working so well?
    Secretary Riley.  Well, what works well is competition, and 
the competition between the two programs really has enhanced 
the whole system. I don't think anybody questions that. The 
FFEL program certainly works much better now than it did before 
we had Direct Loans--the direct lending program--in 
competition.

                 PROPOSED COST SAVINGS IN FFEL PROGRAM

    The offsets that are included are based primarily on what 
were perceived to be inequities and other factors in the FFEL 
program. Tom, do you want to comment on those specific offsets?
    Mr. Skelly. We do have a number of offsets, Mr. Bonilla, 
but we don't reduce the FFEL program in half. We actually 
continue making over $20 billion in loans in the FFEL program. 
That will continue.
    What will be reduced will be some of the subsidies that go 
to the program. Under the President's proposal, we would recall 
the reserves the guarantee agencies have in some cases. We 
would reduce the subsidy provided through tax-exempt revenue 
bonds that a number of lenders use, and we would reduce the 
amount of money the guarantee agencies could retain on their 
collection of defaulted loans. So these efforts are all 
intended to reduce the cost of the program, not to eliminate it 
or to reduce it in half.
    Mr. Bonilla. I appreciate your candor on this, but I think 
we are going to look on this subcommittee at again making sure 
overall--my line of questioning this morning is to support 
things that work and keep them going and keep giving them the 
resources they need, because they are producing good results. 
Thank you.
    Mr. Porter. Thank you, Mr. Bonilla.
    Ms. DeLauro.
    Ms. DeLauro. Thank you very much, Mr. Chairman.

                        COMPUTERS IN THE SCHOOLS

    Mr. Secretary, what can I tell you? It is really an honor 
to be here on this committee and listening to you. I want to 
say thank you to you for your commitment and dedication, not 
just these last several years, but your life-time commitment to 
education and to our kids. We are enormously grateful, as I 
know the people of America are.
    Let me ask a couple of questions here on technology. The 
current administration policy, as I understand, was established 
in 1995, and it is a goal of one computer for every five 
students at some point in the future. It is a little bit of a 
concern to me. Is that an outdated model, five computers in the 
back of a classroom, or a computer lab that kids visit once a 
week?
    It has almost become as textbooks were to my generation and 
to me, it just seems we ought to be trying to deal with a goal 
of a one-to-one model here, given what we know about the way in 
which technology is accelerating and how in fact it might 
change the learning process for our kids.
    I just wanted to ask your view of that, of going from a 
five-to-one to one-to-one ratio, and on what you view as might 
be a downside, other than the need for additional resources, 
which I understand is the case. If we don't move in this 
direction, aren't we then going to put education in the purview 
once again of the middle class, upper middle-class, or people 
who can afford to deal with the technology?
    Secretary Riley.  Well, your suggestion I think is a good 
one. Again, it is what you can afford to do and how fast you 
can do it. I think the idea of the old computer lab is kind of 
moving out, and they find it is much more effective to have 
computers in the classroom, used in the ordinary course of 
learning.

            PREPARING TOMORROW'S TEACHERS TO USE TECHNOLOGY

    Teacher preparation is extremely important in all of that. 
I don't care how many computers you have. You really do need 
connection to the Internet, you need good software, but you 
definitely need teacher preparation on how to use technology. 
As you know, we have increased our request for Preparing 
Teachers to use Technology from $75 to $150 million, for 
helping new teachers learn how to teach with technology.
    I think you are right. We are going to move further in that 
direction. But you have to have a classroom connected--and we 
are now up to 63 percent of the classrooms in America that are 
connected to the Internet, 95 percent of the schools. That is 
just recent information. That is very encouraging, but still 
where the need is is in poor schools, for the connecting of the 
classrooms to the Internet.
    So we have got a ways to go, but we have moved enormously 
in connecting up with the Internet, and making computers 
available. This goal of one for every five children is really a 
rather bold goal. I think you are right. As you move on into 
the future it probably should move towards one to one.
    Ms. Delauro. I just wanted to see us do what John Kennedy 
said. In 10 years, we could put a man on the moon. I think we 
should set the sights as high as we can in this regard, 
particularly in the way in which the technology is increasing.

                        PELL GRANT BUYING POWER

    Let me ask a Pell question. In the late 1970s the maximum 
Pell grant paid for about three-quarters of the average cost of 
attendance at a public 4-year college. Today, my understanding 
is that the maximum Pell grant covers only about a third of 
that cost. For private institutions, the Pell grant dropped 
from covering a third of the cost to only one-seventh of the 
cost.
    Let me just ask, first, is there accuracy on the buying 
power of the Pell Grant; and when we are talking about a $200 
increase, is that, in your view, enough to really make a 
difference--look, it is worthwhile, but is this enough to 
really move us in the direction of trying to maximize the Pell 
Grant?
    Secretary Riley.  It is clearly a move in the right 
direction, but it certainly is not enough. A Pell Grant, as you 
know, covers tuition and fees and costs of room and board, the 
actual costs of college. So when you figure all of that, it 
comes to around $10,000, and the $3,500 would be, of course, 
about a third of that. We would very much like to see that move 
up towards $4,000, $4,500. The higher education community 
really is trying I think to keep the cost of tuition down. The 
increase has tremendously leveled off. It is still moving up 
some, but nothing like what it was.
    I think we have the people's attention and concern with 
respect to this high level of debt that young people come out 
of college with. It is a real problem.
    So I join with your sentiment. I would like to see 
themaximum Pell Grant move on up higher. It costs the Federal 
Government over $300 million for every $100 you increase the Pell Grant 
maximum award. Pell grants are a tremendous source of financial aid 
enabling young people to afford college in this country; it is very, 
very, very significant.
    Mr. Porter. I am sorry to interrupt, but we think we can 
sneak in 5 more minutes of questions before we go to the vote.
    Mr. Cunningham.
    Mr. Cunningham. Thank you, Mr. Chairman.

                           IMPACT AID FUNDING

    Hi, Mr. Secretary. I have got a couple of questions, and 
they primarily affect California a lot.
    The President has cut Impact Aid over the last 8 years, and 
Republicans and Democrats, the impact aid coalition, has always 
been able to put it back in.
    Now, the President in your budget request, you have got 
money for things for Native Americans, but the impact aid is 
very critical, especially to the States that have Native 
Americans. I don't have in my district, but I know in San Diego 
County there are a lot of reservations hurt, and also our 
military men and women.
    I would like to know--what I have is a series of questions 
on impact aid. You can just provide them for the record so you 
can get more questions in. That is one thing.
    Mr. Cunningham. Secondly----
    Secretary Riley.  Do you want me to respond generally to 
that?
    Very briefly, our policy is to support ``a'' children and 
not ``b'' children under the Impact Aid program, as you know. 
We do request an increase of 7 percent for ``a'' children but 
eliminate ``b'' children because there is a pretty good 
argument that they are not a burden to the community, since 
they often live out in the community, pay property taxes and so 
forth.
    Mr. Cunningham. Most of those in San Diego, because of the 
cost of housing--the cost of housing in San Diego is up around 
$300,000 on average, and those people trying to live off base 
are having to pay above their actual housing allowance, and 
they are renting, they are not buying in most cases. So they 
are not paying the actual property taxes, and those schools are 
impacted greatly. I know up in the Bay area it is even more 
expensive. California is terrible for that. A lot of the 
environmental laws have raised the costs of housing up $60,000 
per house. We would like you to look at that.

            DAVIS-BACON REQUIREMENTS AND SCHOOL CONSTRUCTION

    Another thing, when we talk about school construction, it 
has been proven many States have opted out of Davis-Bacon. We 
can save between 18 and 35 percent if we build our schools and 
waive Davis-Bacon just for school construction. The Department 
says it is for children. Are they for the children or unions? 
If we waive Davis-Bacon, we can allow private industry to do 
it, give them tax relief, like our original bill had, let them 
keep the extra 25 or 30 percent for whatever they need. Yet the 
administration, because of the union bosses, is not letting us 
do that.
    Would you opt to waive Davis-Bacon requirements for school 
construction?
    Secretary Riley.  Well, I think I understand your position, 
but I think there is a certain dispute about that. Of course, 
Davis-Bacon is the law of this country in terms of Federal 
expenditure on construction. And the Labor Department 
administers Davis-Bacon, that is not my field----
    Mr. Cunningham. We could waive that in Congress. Would you 
support that?
    Secretary Riley.  Well, the Labor Department makes a very 
strong argument that it does not end up costing more, and the 
high quality of labor is a very important factor.
    Mr. Cunningham. That is a nice spin, Mr. Secretary, but it 
is well documented it does cost 18 to 35 percent more, and 
States that have waived it have saved those monies. I disagree 
with you on that.

                  HOLD-HARMLESS PROVISIONS IN TITLE I

    The other question I would like is the hold-harmless bill 
in which most of California is hurt. The Senate demanded that 
100 percent hold harmless for those States, and it hurts the 
States, specifically the western States, because of the 
population growth, California being the worst. That hold 
harmless, with our population growth in the next 10 years, it 
is almost going to double. Most of those are Hispanic children, 
and that hold harmless kills California and the western States.
    Does your Department have anything--would you support doing 
away with the hold harmless position?
    Secretary Riley.  Absolutely. I agree with you 100 percent 
on that. I hope that is your last question so we can be solid 
together on that one question.
    Mr. Cunningham. We are going to be together, Mr. Secretary.
    Secretary Riley.  Don't get off into something I can't 
agree with now. But I totally agree with you, Congressman, on 
that, and we would oppose the hold harmless because the funds 
really should go where----
    Mr. Cunningham. Mr. Secretary, we have been friends for a 
long time. I believe you are one of the President's real points 
of light over there. I support you very much. You know me by 
now.
    Secretary Riley.  I just enjoy agreeing with you, though.
    Mr. Cunningham. So do I, sir.

            USING PRISONERS TO RETOOL COMPUTERS FOR SCHOOLS

    The other one is the President signed--we had the 21st 
Century Act which--what it does, schools were getting computers 
and they couldn't use them because they didn't have the 
technology to upgrade them. We had a program that allows 
business within 2 years to donate a computer. The nonprofit 
business then takes that and lets prison labor upgrade that 
computer with software, so it teaches the prisoners a skill. So 
maybe they will not go back there. They then hand it over to 
the school ready to use, as an up computer, ready to use.

                   RETOOLING COMPUTERS FOR LIBRARIES

    We have a new bill coming forward--that we are going to 
bring forward--that expands that into libraries. When you take 
a single mom or someone coming off of welfare, the one area 
that they have access to is a library for computers, and many 
of our schools and public libraries are not updated. I would 
like to come and talk to you about it and see if we can get 
your support, because it has been a wonderful program. We are 
in 27 States. The President signed the other bill, and this 
just expands it into libraries. It helps business, it helps the 
prison system, and it helps the schools.
    Secretary Riley.  I welcome that. That sounds like it makes 
good sense.
    Mr. Cunningham. We agree on that, too.

                            TEMPORARY RECESS

    We will be back after the votes, Mr. Secretary.
    Secretary Riley. I will be right here.
    [Recess.]
    Mr. Porter. The subcommittee will come to order.
    The Chair recognizes Ms. Northup.
    Mrs. Northup. Thank you. Good morning, Mr. Secretary.
    Secretary Riley.  Good morning.

                    PUBLIC SCHOOL CHOICE AND TITLE I

    Mrs. Northup. I would like to start by asking you about 
public school choice.
    Last year in our bill I think that we funded Title I with 
the proviso that schools that are failing, that they allow 
public school choice, children the ability to leave the school 
they are in and move to a school that is more successful.
    At the urging of the Department of Education and the 
President, as I understand it, we added about one hundred and 
some odd million dollars to help offset the costs that schools 
might incur with that. But it was certainly the intention of 
Congress that all public schools allow that choice for their 
children.
    It is my understanding that the Department of Education has 
written the regulations so that only money that can be spent 
for public school choice must come out of the Title I account 
and only up to $139 million or whatever. I feel like that goes 
against the sentiment of the Congress. I am wondering if you 
would comment on that.

                   CHOICE AND FAILING PUBLIC SCHOOLS

    Secretary Riley.  Well, of course, we were together on 
trying to have public school choice where we had schools that 
were under correction or improvement, and it was clear to us 
that the first priority would be those who were under 
correction. That is where the money was going to correct them. 
They had been determined to be schools that needed correction.
    Then I think the rest of that, it is really a question of 
timing. It was kind of impractical to go to the whole district, 
but we felt that the practicality of doing what we wanted to 
do--we wanted to go to the schools that the money was going to 
first, and I think that would take all of the funds.
    Mrs. Northup. Mr. Secretary, I am confused. This isn't what 
we do. This is what local school districts do. They allow 
students that are in failing schools that continue to fail--
despite using Title I funds, the local school districts have to 
allow those students to transfer to schools that are more 
successful. That is not what we do. That is what the local 
school district has to do. If there is a cost associated, we 
have offered this additional money to help offset those costs.
    But I am just confused. Again, the first three pages of 
your testimony are about the importance of school districts 
being the primary authority, the responsibile party putting 
together the program. I don't know that I care how they go 
about the school choice, but I know there is great differences 
in how public schools in my district, what their achievement 
levels are, and their improvement levels, quite honestly. And 
if they don't use comprehensive school money effectively, Title 
I money effectively, the goal of that provision was to make 
sure that every child had a chance to get out of a failing 
school.
    Secretary Riley.  Well, in our new budget request we are 
proposing to expand the choice option to all local school 
districts that are participating in Title I but only for the 
students attending schools identified for corrective action. 
That is what you are referring to.
    The funds go to those schools that are failing and call for 
corrective action----

            IDENTIFICATION OF SCHOOLS FOR CORRECTIVE ACTION

    Mrs. Northup. Will you decide what schools are failing?
    Secretary Riley.  Well, the Title I process decides that. 
That has been that way since 1994.
    Mrs. Northup. Say State laws we have in Kentucky identify 
failing schools, schools that fail to improve. If they don't 
fall under your criteria, the Federal criteria, then I guess 
this program wouldn't apply to them, is that right?
    Secretary Riley.  No, they identify their own schools that 
call for corrective action. Those are the ones that are failing 
the most.
    Then there is another category that need improvement. They 
are kind of in a ``watched'' category. They are not as bad as 
those that need corrective action.
    We don't have enough money in this proposal to go but so 
far, and obviously the schools needing corrective action are 
the ones that we were dealing with in the language of the 
Goodling proposal.
    Mrs. Northup. I guess I just don't understand why we 
wouldn't let them allow to choose, to have the choice and to 
implement that. I don't understand why the monies wouldn't go 
to every district that chooses to identify schools that are 
failing and wants to participate in public school choice.
    Secretary Riley.  I think, Congresswoman, as you point out, 
it is up to them to decide what they want to do. We don't do 
that. But for our funds that are going to help with that, 
obviously, it seems to me like it ought to go to the corrective 
schools first. That is what we are talking about, trying to 
turn them around.
    Mrs. Northup. All right.
    Secretary Riley.  They can do what they want to do on the 
local level. They are the ones that control that. You are right 
about that.

                LOCAL CONTROL VERSUS FEDERAL REGULATION

    Mrs. Northup. Overwhelmingly in my district, the complaint 
is the regulations, the limitations on their abilities to 
implement the changes as they believe are what would most 
address the needs that our students have.
    Specifically, our superintendent, who works with a school 
board that strongly is rooted in the Democratic Party, feels 
very strongly that there is only one or two studies that you 
can point to that shows class size makes a difference. In fact, 
there is a new study that has come out that shows only a 
fraction of the studies shows that size of class helps improve 
schools.
    To insist that the new money go in the way we want it only 
continues the Federal Government's limitations on schools to be 
able to use creative problem solving. I have a lot of faith in 
our schools, and I think that they have a lot of good ideas. 
But what they find coming down from the Federal Government, 
particularly with the new programs that are suggestions here, 
is a little bit of money and a whole lot more regulations that 
tell them what type of investment they are going to make in 
order to improve the schools.
    So I appreciate your earlier remarks in saying we are a 
junior partner, but I do believe the new programs and the 
regulations that come with them over the past couple of years 
and proposed for this year are a continuation of the heavy-
handedness that schools object to.

                      REGULATORY REVIEW AND RELIEF

    Secretary Riley.  Well, in terms of regulations, I think 
you know we have cut regulations two-thirds for the Elementary 
and Secondary Education Act since 1994, and I have tried very 
hard to do that. The ones that are left we constantly go 
through them to try to make sure they are needed and they are 
not just there to cause paperwork to take place.
    This is an effort I strongly agree with.

                     CLASS SIZE AND TEACHER QUALITY

    When you look at class size, it is, as I see it, a national 
priority, and it is a question of whether you want to have 
national priorities or not.
    If you have a national priority, and it makes good sense to 
me that is the way to do it, that doesn't say they have to do 
it, it doesn't tell them how to do it, but it is a priority in 
this country for those early grades, and it is research-based. 
People can argue about that. It is research-based, and it 
works. If you have a teacher who can teach reading well and you 
have the classes down to 15 to 18, I am telling you, it works 
well.
    Mrs. Northup. Well, the first part of that was if you have 
teachers that are good reading teachers.
    Secretary Riley.  Sure.

                   TEACHER RECRUITMENT AND RETENTION

    Mrs. Northup. Half of our problem is how do we attract and 
keep really good teachers. Part of that is by paying them more. 
It is a huge part of the equation. Trying to increase quality 
and quantity at the same time, as the State of California 
proved back in the early 1990s, is very difficult and often 
impossible. You can't increase the quality and the quantity at 
the same time. Many school districts feel that their ability to 
attract and keep good teachers--if you have a class of 15 and 
you don't have a good reading teacher, then you are lost no 
matter how many kids are in that class.
    Secretary Riley.  Well, I think you are right. And if you 
have a class of 35 and you have a good teacher, that teacher is 
struggling in a very difficult way to give quality work to 
those students.
    Mrs. Northup. Thirty-five is an exaggeration. Twenty-four 
is about the most. In your own documents this year you said the 
average class size is around I think 18 in the early primary 
grades, right now.
    Secretary Riley.  It is about 23 to 24. We are trying to 
bring it down to 16. I think we brought it down with the 
first--to what--about 20, 21, I think, Congresswoman. We have 
come down from about 24 to 21 with the previous appropriations.
    Mrs. Northup. I was just looking at the Education 
Statistics Quarterly, the Summer edition in 1999, where you say 
it is 16.6.
    Mr. Porter. We have to move on.
    Mr. Miller.
    Mr. Miller. Good morning, Mr. Secretary.

                 NEW PROGRAMS AND PROGRAM ELIMINATIONS

    Let me start off with a question about the number of new 
programs being added and the number of programs being 
eliminated. Would you summarize that total, the total dollar, 
and are these true eliminations, and are they really authorized 
new programs?
    Secretary Riley.  Well, as I indicated, we have 20 programs 
that we have recommended as new programs, and then 19 
eliminations. We now have 174 programs in all, which is too 
many, but we have come down from 240 when we first came here. 
So we now have 174, and with this budget it would put us up to 
175.

                          COST OF NEW PROGRAMS

    Do you have the costs, Tom, on that?
    Mr. Skelly. Yes. The programs being terminated would total 
almost $1.8 billion. This includes things like Goals 2000 and 
School-to-Work that would be terminated. The new programs could 
come up to almost $3 billion.

                     AUTHORIZATION OF NEW PROGRAMS

    Mr. Miller. How many of those were authorized or will be 
authorized this year--of the new programs, of the 20 new 
programs?
    Mr. Skelly. Most of the programs are in the Elementary and 
Secondary Education Act, which is pending reauthorization.
    Mr. Miller. None of them are reauthorized so far?
    Mr. Skelly. Most of them could be done under existing 
authorization, if that is continued for another year.

                          PROGRAM ELIMINATIONS

    Mr. Miller. Are the eliminations real eliminations?
    Mr. Skelly. The Goals 2000 program is $458 million. The 
School-to-Work is $55 million. That was the idea, to have it 
sunset over time.
    Secretary Riley.  What we propose, Congressman, the Goals 
2000 really has done its job. We have standards out there in 
Florida and every other State reaching for higher standards. 
The job now is to get those standards down into the classroom. 
So with elimination of Goals 2000, those funds and some other 
funds, mixed with Eisenhower, are going primarily for 
improvement of teachers, to try then to move to the next stage, 
to get the standards down into the classroom.

                            CHARTER SCHOOLS

    Mr. Miller. Let me switch to another subject, and that is 
charter schools. In Sarasota County, the largest county in my 
district, they are going to charter the whole school system, 
county school system. I think the administration has been 
supportive of charter schools. I don't know exactly how much of 
an increase you have for charter schools this year.
    Mr. Skelly. $30 million, from $145 million to $175 million.
    Mr. Miller. How does the issue of the whole district being 
a charter district, have you addressed that issue? We have 
addressed it as individual schools. In Florida, they are 
allowing three or four school districts to apply to become 
charter school districts. Sarasota County is one of them.
    Secretary Riley.  That is really a local-State matter. Our 
charter money, because we have gone from I think one charter 
to, what, 1,700 charter schools, I think the way that they are 
set up really is kind of a local matter. Our funds go primarily 
to start-up costs. If it is formed in a district or school or 
whatever, our funds would go----
    Mr. Miller. I visited several in my area and have been very 
pleased with what I have seen. Nationally, how many have been 
failures? Do you keep statistics like that?
    Secretary Riley.  I would say this. I was in, I think, 
Denver a couple of months ago, and someone came up to me and 
said, Mr. Secretary, the charter schools, two here I think have 
failed in Denver, maybe three, whatever. They had a number of 
charter schools. He was saying that in a very negative way, 
like charter schools weren't working.
    I said, that is the very thing that is supposed to happen 
if a school is not working. It is closed down. I think that is 
a positive part of charter schools, rather than a negative 
part, and that is, if they aren't functioning well, they don't 
meet the needs, then the school board--of course, they are 
public schools--then they are eliminated, and then you do 
something else, another charter school or a regular public 
school.
    Mr. Miller. I agree. But the system is working, in your 
opinion?
    Secretary Riley. I think it is working.
    Mr. Miller. So the ones that are failing do go out.
    Secretary Riley.  The fact that some of them are 
failingshows, to me, it is working.
    Mr. Miller. There is one here in D.C. last year that had a 
lot of publicity.
    Secretary Riley.  That is right. You do have that. There 
have been some wonderful ones, and there have been some sorry 
ones. Kind of like everything else. But it is a wonderful 
option, I think, for school districts to have. And it is not a 
panacea, in my judgment, but it is a good option for them to 
have.

                    COLLEGE OPPORTUNITY TAX CREDITS

    Mr. Miller. Let me switch to one other subject, and that is 
the tax credits for college and such. This is kind of--for a 
fiscally conservative Republican that supports tax credits and 
deductions and such, I have mixed emotions. I visited financial 
aid offices in schools, and having two kids go to college, I 
know you need the money in August and January. And it seems 
like the Pell grants, they get the money when they need it 
pretty much, but the tax credit is an April 15th thing or you 
adjust your withholding a little bit, whereas with student 
loans you get the money right when you need it.
    It is strange for me, raising that concern, but it doesn't 
seem like it is affecting the people when they need it the 
most. Do you sense that as a problem?
    Secretary Riley.  Well, that is a very good observation. It 
kind of chases the entry into college itself. It is a family 
thing. The Hope scholarship, as you know, and Pell Grants are 
aimed at the individual. They go to the individual. The College 
Opportunity Tax Cut is a family tax credit that can be written 
off as a deduction, the tuition and fees up to $5,000 if you 
don't make over $120,000. We are finding it is working very 
well. There have been close to 5 million families that have 
taken the Hope scholarship in the previous tax credit, and we 
think it will be expanded significantly.
    Mr. Miller. I support the concept. It seems like one of the 
problems is cash is needed on the day you write that tuition 
check, rather than April 15th.
    Secretary Riley.  That is a practical issue and a practical 
problem. I see what you are saying. I think some of the schools 
are working that out for young people, and if they are going to 
get a tax credit when tax time comes around that they make some 
kind of arrangement with them on a temporary basis or 
something. You can work around that, I think.
    Mr. Miller. Thank you, Mr. Secretary.
    Mr. Porter. Ms. Lowey.
    Mrs. Lowey. Thank you, Mr. Chairman.
    Welcome, Secretary Riley. I personally want to thank you 
for your strong commitment to our educational system, to our 
children, to our country. We appreciate you.
    Secretary Riley.  Thank you very much.

                           SCHOOL RENOVATION

    Mrs. Lowey. You know my long commitment to school 
modernization and how important I think it is that we modernize 
our schools. We do a lot of talking about the ``digital 
divide.'' You and I have visited schools where the schools 
don't even have the infrastructure to put in computers. In 
fact, I remember one school you and I were visiting where they 
had to wire the school from the outside and vandals had come by 
in the middle of the night cutting all the wires. I have heard 
others say, and I just agree, that this is really a shame on 
our country. And I am a strong supporter, and I feel it is a 
Federal-State-local partnership, and we just can't say it is a 
local responsibility. We do so many other things in partnership 
with State and local government, I think that has to be our top 
priority.
    So I strongly support the administration's $1.3 billion in 
discretionary funds for schoool renovation targeted at the 
schools that need it most.
    I know there has been some discussion recently about the 
efforts of local school districts in building new schools, and 
I would be most appreciative--and I know you mentioned in your 
statement that the numbers are about $112 billion from the 
former GAO study that is necessary to deal with the problem 
nationally.
    You have visited so many schools. You have in your 
Department assessed the conditions of our Nation's schools. 
Could you address for us what you believe this administration's 
package can really do for our kids and for our families and our 
children?
    Secretary Riley.  Well, I thank you for your leadership in 
this area.
    First of all, I think it is a very good way, in terms of 
the partnership that I discussed, for us to, on the Federal 
level, to help States and local schools with the overall 
construction, and renovation matters.

                       SCHOOL MODERNIZATION BONDS

    The idea of helping with the financing, helping by covering 
the interest costs on eligible construction bonds by providing 
tax credits which enables a school district to leverage their 
bonds in a tremendous way; this is very attractive. You would 
see a very large expansion I think of construction going on in 
a very careful way. We would not be involved in deciding what 
schools to build, what ones to renovate, how to do it. We would 
want to be helpful on any of that, but that is a local matter. 
We would simply be helping with the financing, as you know.

                       SCHOOL RENOVATION PROGRAM

    The other program, the school renovation discretionary 
program, would only qualify for those very needy schools in 
those poor areas, one of which you and I visited. You probably 
can't get a bond issue passed in these needy local school 
districts. If you did, it would be an enormous cost because of 
the low assessed value of property and so forth.
    For those particular areas, this money would go to a grant 
and loan process, primarily loans, low interest loans, where 
they probably couldn't get loans or probably couldn't get 
bonds. That would only be, though, for renovation and 
improvement, but to get them where they could handle the 
digital matters that are at hand and also safety, lighting. You 
and I have been in halls that were virtually dark, where it was 
dingy halls, and it is just not right. You expect children to 
reach high standards and teachers to teach to high standards, 
and they ought to be teaching and learning in a place that is 
conducive to high standards.
    Mrs. Lowey. Well, I appreciate those comments, and I hope 
that we can work together to get both packages approved by the 
Congress this year. I know that there is a lot of local 
support.
    I think we have to remember again--you mentioned it and I 
want to emphasize it--that there is local control of the 
decision. I am sure the local taxpayers would be delighted to 
see that some of their property taxes would not go up as a 
result of it.

                        PROFESSIONAL DEVELOPMENT

    I also wanted to address another issue, because I know many 
of us on this committee, on both sides of the aisle, are very 
concerned about the quality and quantity of our teaching force. 
In fact, New York faces a great crisis which we have to deal 
with. I strongly agree with this.
    But I am also very concerned about our ability to trainand 
keep high quality principals. Principals are facing greater challenges 
than ever before. They have enormous responsibility, minor increases in 
pay, there is little incentive for good teachers to join the 
administrative ranks.
    We know that for teachers and administrators alike ongoing 
professional development can serve as a major incentive to 
remain in their field. However, according to the Congressional 
Research Service, fewer than 1 percent of professional 
development initiatives under the Eisenhower Professional 
Development Program serve principals or other administrators. 
In fact, I have been in touch with Carnegie and Ford, and I 
know they have invested millions of dollars to really find some 
solutions to this great challenge that we have.
    If you could comment on the need for professional 
development and how we can best address it, I would be 
appreciative.

             DEVELOPMENT AND TRAINING OF SCHOOL LEADERSHIP

    Secretary Riley.  There is great need also for what I 
would, in a broad sense, term school leadership--principals, 
superintendents, and really good school board members and so 
forth--but that gets off of the professional people who are in 
the world of education.
    We have in this proposed budget $40 million for a School 
Leadership Initiative, which would provide professional 
development of school leaders, principals, superintendents, 
particularly in high-poverty, low-performing districts and 
States. There is a great need for that.
    I used to think that if you had a teacher that was trying 
to get an increase in pay, then the thing to do was to move on 
up to be a principal, and I never did much like that. I didn't 
think that was right. Teachers were to teach, and the principal 
was to manage the building. And that is completely turned 
around now. The principal, as you know, is an education leader. 
They manage the building, but they also go into the classroom 
and they observe the test scores and they see which teachers 
are doing well and which ones aren't, and they mix up master 
teachers with new teachers so they can learn, and so forth. 
They are the leading education force in the school.
    So quality teachers make good principals, if they have the 
right kind of professional development. So we are looking at 
all of that, but we really agree with you and we propose this 
$40 million that would go specifically for training effective 
school leadership, principals and superintendents. It is a 
grave need.
    Mrs. Lowey. Thank you, Mr. Secretary.
    Mr. Porter. Mr. Obey.
    Mr. Obey. Thank you, Mr. Secretary. Sorry to be late. I had 
a choice between going to your hearing this morning and going 
to the dentist, and you lost.
    Secretary Riley. That was a wise choice.
    Mr. Obey. It is no fun, but I am glad I am here.
    I just would like to say that in all the years I have seen 
Secretaries of the Education Department, I think your record of 
performance tops them all. I just want to congratulate you for 
the quality of your work and your dedication and make a couple 
of observations.
    Secretary Riley.  Thank you, sir.

                       FEDERAL EDUCATION SPENDING

    Mr. Obey. First of all, if you take a look at what both 
political parties are doing with respect to the budget, we hear 
some people in Congress saying we have got to hold spending at 
current levels. They would like a hard freeze for the next 5 or 
10 years. You hear others say, well, we can't do that, but we 
ought to provide an adjustment for inflation and hold it at 
that.
    I would like to point out that, as in so many other areas, 
in the area of education if all we do is adjust Federal support 
for education by the inflationary amount, we will be in fact 
providing less services per student than we are providing right 
now.

                          ENROLLMENT INCREASES

    This chart shows, for instance, that high school enrollment 
over the next 10 years is going to go up by 1.3 million kids. 
If you look at higher education, enrollment is going to go up 
by 1.5 million kids. If you look at elementary and secondary 
education, where most of the increase has already taken place, 
there is still going to be a roughly 1 million kid increase, 
and that is going to translate into more demand for Title I, 
more demand for Pell grants, and more demand for everything 
else.
    So it seems to me that we need to do a whole lot more than 
simply adjust the budget for inflation, or we will not be 
meeting our education responsibilities.

                   ACCOUNTABILITY AND TEACHER QUALITY

    I would like you to comment on one thing. I am amazed that 
it has been the Federal Government that, in the eyes of some 
people, has been pinned with the rap for the lack of 
performance of some schools around the country. If you take a 
look at the question of teacher quality, for instance, you see 
a lot of teachers who are pretty good. But, I have seen some 
teachers I wouldn't want near my dachshund. They have lost 
interest, they never knew their subject, and they are 
inflicting a lot of damage on the kids in their classroom. I 
think that is a small minority of teachers, but if you are the 
parents of a kid who gets the kind of teacher like that, 
especially if you get such a teacher 2 or 3 years in a row, you 
have a big problem.

                     INCREASES FOR TEACHER TRAINING

    Yet when you look at who has the responsibility for dealing 
with teachers, that is very largely a State and local 
responsibility. Local governments decide who they are going to 
hire, and it is usually under State law that teachers or would-
be teachers go to universities and get their training.
    It seems to me that that argues for the Federal Government 
playing an even more aggressive role than we have played in the 
past in developing programs to adequately train teachers, and 
that is why I am pleased to see that your budget this year has 
over $600 million in increases for initiatives aimed at 
improving teacher quality and teacher training.
    Secretary Riley.  Well, I would say, Mr. Obey--and I have 
spoken in general to that earlier. As you know, Goals 2000 has 
done its job, and we have standards out there in every State, 
all 50 States, and they really give us a wonderful foundation 
for improving education.
    So we proposed, of course, to eliminate Goals 2000, end 
School-to-Work, which was phased out anyhow this year, and then 
to shift those funds into the area that you say, and that is to 
invest in professional development of teachers, done in a much 
different way, in a very substantial way, where you are talking 
about lesson plans and you are working with master teachers and 
not the old way of going to the auditorium and the local 
politician comes in and makes a speech and says, well, you have 
had professional development.
    So we are trying to get standards down into the classroom. 
The key is the teacher. It is a national priority, and I am a 
strong supporter, as you know, of national priorities, with 
accountability, to really then have the Nation say, this is 
important to us as a Nation and then to shift these funds,$690 
million, plus a number of other programs that would be doing the same 
kind of work, to this new direction.
    We think it is money well spent, and it is investing in the 
future, investing in our children.

                       WISCONSIN CSRD EVALUATION

    Mr. Obey. Thank you. My time is up.
    I would simply like you for the record to respond to two 
questions about the Comprehensive School Reform Demonstration 
program which this committee has funded the last several years. 
I note that in my own State that an independent evaluation of 
the program said the following: In the year when Wisconsin 
students collectively scored better than students in the 
previous year, comprehensive school reform students made even 
larger gains. Those schools achieved greater improvements than 
Wisconsin students as a whole in four of the five subject 
tests.
    I would simply like to ask you, and you can respond for the 
record because of the lack of time here today, whether the 
Department has reviewed those results and whether you agree 
that the results of that evaluation are significant.
    [The information follows:]

                       WISCONSIN CSRD EVALUATION

    We are very encouraged by the findings of the Wisconsin 
Comprehensive School Reform Demonstration evaluation. Students 
in CSRD schools in Wisconsin made significant achievement gains 
as measured by the Wisconsin Students Assessment System. For 
example, fourth grade students in CSRD schools improved 
slightly in reading and made large improvements in language 
arts, mathematics, science, and social studies. The percentage 
increases in the CSRD schools exceeded those of Wisconsin 
schools as a whole in all subject areas except language arts.
    An independent evaluator conducted the evaluation and the 
Department has disseminated information on the evaluation so 
that it can serve as a model for other States' evaluation 
efforts.

                 COMPREHENSIVE SCHOOL REFORM EVALUATION

    Mr. Obey. Secondly, since it is States, not the Federal 
Government, that decide which reform models are going to be 
funded and which schools should receive grants, I would like to 
know your assessment of how well States are making quality 
funding decisions and working with schools to ensure that they 
are making good choices and assessing the real needs.
    Secretary Riley.  Very briefly, Mr. Chairman, I guess I 
agree with the report, and we have been very, very pleased with 
its findings.
    What we see around the country, as you point out, some of 
the local decisions and the law allows you to have flexibility 
and local decisions. With the 17 research-based programs that 
are put forth as models, when one of these programs is 
approved, generally it is not the issue of whether or not it is 
a research-based model, it is an issue for the consideration 
based on the quality and success of those programs. Some models 
have worked better than others, obviously, as with everything 
else, but we are very satisfied with the way it has worked.

                   IMPLEMENTATION OF THE CSRD PROGRAM

    Mr. Obey. I would appreciate it if you could expand on that 
for the record.
    [The information follows:]

                   Implementation of the CSRD Program

    We are encouraged by the progress States and districts have 
made so far in implementing the Comprehensive School Reform 
Demonstration Program. The CSRD Program is encouraging more 
schools--especially Title I schools--to undertake 
comprehensive, research-based improvements that strengthen 
teaching and learning in core subjects and many States are 
using CSRD to help turn around low-performing schools. We are 
beginning to see some results in some schools, including the 
large gains made by fourth-graders in Wisconsin.
    Most schools are using well-known models. The most 
frequently selected model is Success For All, which is a 
research-based program that has an intensive focus on early 
literacy and parental involvement. The 17 programs mentioned in 
the legislation are serving close to half a million students.
    Congress gave schools the flexibility to adopt models not 
identified in the legislation, including locally developed 
programs. States use a competitive process to select grantees 
that, in their judgment, identify comprehensive programs that 
have the greatest potential for success and demonstrate the 
greatest need for support in implementing comprehensive 
reforms.
    We are continuing to work with States to strengthen the 
implementation of the program. We recently issued additional 
guidance to help States strengthen their selection process. 
Department staffers have met with State administrators to help 
them improve their programs. In addition, we are working with 
the regional education labs and comprehensive centers to 
develop new materials that will help local schools choose 
effective reforms. For example, one of the regional labs is 
developing a guide on effective approaches to comprehensive 
school reform and schoolwide programs.

                       CHAIRMAN'S CLOSING REMARKS

    Mr. Porter. Thank you, Mr. Obey.
    Mr. Secretary, we thank you for indulging us with all of 
these interruptions and meetings. We very much appreciate the 
fine job you have done and are doing at the Department. We have 
the highest respect for you and your team, and we look forward 
to hearing your assistant secretaries in further questioning on 
what the Department is doing. Thank you very much, sir.
    This subcommittee will stand in recess until 10:00 a.m., 
tomorrow.
    [The following questions were submitted to be answered for 
the Record:]



                                         Wednesday, March 15, 2000.

                VOCATIONAL AND ADULT EDUCATION PROGRAMS

                               WITNESSES

PATRICIA W. McNEIL, ASSISTANT SECRETARY FOR VOCATIONAL AND ADULT 
    EDUCATION
THOMAS P. SKELLY, DIRECTOR, BUDGET SERVICE
LONNA JONES, ACTING DIRECTOR, ELEMENTARY, SECONDARY, AND VOCATIONAL 
    ANALYSIS DIVISION, BUDGET SERVICE
    Mr. Porter. The subcommittee will come to order. We 
continue our hearings on the budget for the Department of 
Education this morning. With the Office of Vocational and Adult 
Education, we are pleased to welcome the assistant secretary, 
Patricia McNeil. It is nice to see you again.
    Ms. McNeil. Nice to see you, too.
    Mr. Porter. I welcome all of you here this morning. I think 
in the interest of time, you should proceed with your statement 
and then we will see how far we can go with questions.
    Ms. McNeil. Good morning, Mr. Chairman. As always, I would 
say it is a delight, but it is close to a delight to be here. I 
do have a written statement for the record. I would just like 
to briefly summarize some of the highlights of that statement.

                Opening Statement of Patricia W. McNeil

    Five decades ago, with the invention of the silicon chip, 
America began moving toward an information age. I think few 
really realized what a revolutionary change that would make in 
the way we live, in the way we work, in the way we shop, and 
the impact it would have on our institutions, government, 
business, and education. I think we are really scrambling right 
now to invent the schoolhouse of the future and to try to 
figure out how learning needs to change for adults to deal with 
a world in which adults and youth have to have the knowledge 
and skills to participate in a society that is rich in 
technology, that is awash in information, and that is globally 
connected.
    Our strategy for dealing with these challenges in 
vocational adult education is straightforward. We want to 
establish clear goals, redesign our institutions and programs 
to meet these goals, develop new teaching materials and 
assessments, recruit and prepare the best and highest quality 
teachers, use technology, provide extra help for those students 
who need it, form strong partnerships and focus on 
accountability for results. Our goals in both of our pieces of 
legislation focus on improving student achievement, increasing 
their attainment of diplomas and certificates and degrees, and 
increasing their entry into further schooling, employment, or 
the military. Now, our most important task over the past year 
has been to work in very close partnership with States to 
develop accountability systems that measure progress on these 
goals and really capture the results of Federal investments.

                   DEVELOPING ACCOUNTABILITY SYSTEMS

    In adult education, a lot of the groundwork for 
accountability systems was laid prior to the enactment of the 
new legislation. So all States were able to provide us with 
some information on past performance and set goals and reach 
agreements with the Department on the levels of performance 
that they were going to meet for 1999. And in December of 2000, 
we do expect to have data on all States in adult education.
    In vocational education, we started almost from scratch in 
building an accountability system. Prior to the new 
legislation, most States had accountability systems, but they 
were very different, and some States really had them in name 
only. They had no system at all. So as a result, there is very 
little data from prior years on performance indicators that are 
in our legislation. We are going to have some performance data 
in December of 2000, but more complete data will be available 
in December of 2001. I just would say that the States have 
really undertaken a huge task here to try to implement this law 
rapidly, and I really appreciate all the work that they have 
done.
    Vocational education was originally designed for an 
industrial economy, and the performance indicators in the new 
law really create a new vision for a knowledge-based economy. 
The idea is to prepare students to meet rigorous State academic 
standards as well as provide them with high-quality technical 
skills to help them enter college and prepare for careers, not 
just entry level jobs.
    Studies that we have done of our New American High Schools 
initiative, of tech prep, career academies, and High Schools 
That Work, show that we are moving in the right direction in 
technical education. In fact, the proportion of students in 
technical programs now taking what is called the new basics of 
four credits of English, three credits of math and science and 
social studies, increased from 19 percent in 1990 to 45 percent 
in 1998, and of all students, only 55 percent take this new 
basic curriculum. So voc ed has moved up very rapidly in terms 
of academic skills attainment along with technical skills.

                      VOCATIONAL EDUCATION REQUEST

    In many States and communities, Tech Prep is the key 
strategy for creating this new vision for vocational education 
and in making changes to high schools. In South Carolina, for 
example, Tech Prep has actually replaced both the general track 
and the vocational track. So it is one reason we are asking for 
a tripling of funds to $306,000,000 for Tech Prep. We think it 
is a very promising strategy. It is designed to incorporate 
rigorous academic content, technical skills, and really give 
students a clear pathway to postsecondary education, and then 
out into the world of work.
    Our request of $17,500,000 for national programs in 
vocational education is also designed to support efforts to 
really achieve this new vision. We are investing in the 
development of 16 new career clusters, quality teacher 
training, high school reform, and accountability systems. Our 
New American High School initiative is part of the Department's 
efforts to make high schools more effective, and I am pleased 
to say that Adlai Stevenson High School in Lincolnshire, 
Illinois, is one of our New American High Schools. I had the 
privilege of going out there and participating in the 100th 
birthday celebration for Adlai Stevenson in February. It is a 
wonderful school.
    We also have before you a $120,000,000 request in the 
Education Reform Account for the Small, Safe, and Successful 
High Schools initiative. It is an important component of our 
overall high school reform strategy at the Department, and we 
really think that the Small Schools grants that you started to 
fund this year are going to make a big difference in the safety 
and effectiveness of high schools.
    The Perkins Act also provides critical support to community 
colleges, tribal colleges, Indian and Native Hawaiian programs, 
and correctional education. Although we are not requesting 
money for School-to-Work this year, that investment, I think, 
has been incredibly successful. And I really want to thank the 
committee for its support of School-to-Work over these past 
years.

                        ADULT EDUCATION REQUEST

    Our FY 2000 appropriation for Adult Education State Grants 
was an historic increase of $85,000,000, including funds 
dedicated to an increase in English, literacy and civics 
education. Still, there are 44 million adults eligible to 
participate in adult basic education alone, and States have 
waiting lists of adults who want to enroll.So we believe we 
have to continue to increase our investment to meet this need.
    For 2001, we are requesting $460,000,000 for the adult 
education State grants, and an additional $75,000,000 for 
English, literacy and civics education. Our 5-year goal in 
adult education is really to improve the quality by increasing 
the number of full-time teachers, tripling the number of 
computer stations, doubling the number of class hours the 
average student completes, because these things have all been 
shown in research to really make a difference in student 
performance. And we know from States that they are already 
planning to use their FY 2000 increase to do these very things.
    The FY 2000 English literacy common-ground partnerships, 
this ESL civics initiative, will reach an estimated 85,000 
immigrants, and those who don't have English as their first 
language. Our request for $75 million in FY 2001 is going to, 
we think, triple the number of participants in this very 
important program.
    To support continued program improvements and evaluation, 
we are requesting $14,000,000 in national leadership activities 
for adult education. We are going to be investing in new 
technologies to open up more learning opportunities for adults, 
in accountability systems, research on literacy levels, and 
evaluation of best practices. We are also requesting 
$6,500,000, an increase of half a million dollars, for the 
National Institute for Literacy. The Institute, among other 
things, supports a very effective on-line literacy information 
system, public awareness of the need for literacy services, and 
the development of innovative content standards for adult 
learners.

                  COMMUNITY TECHNOLOGY CENTERS REQUEST

    Finally, we all know the digital divide looms very large in 
our big cities and rural areas, and community technology 
centers respond to the need to close that divide. Our first CTC 
competition drew 750 applications. We only awarded 40 grants, 
but those grants are creating or improving a hundred centers. 
This year we are going to be funding about 80 grants, raising 
the number of centers to about 300. For 2001, we are requesting 
a tripling of our investment to $100,000,000, and we hope to 
fund by that time a total of 400 grants and have 1,000 centers 
across the country.
    In closing, Mr. Chairman, I would just like to thank you 
for your interest and support for our work over the past few 
years. Next year somebody else is going to be sitting in your 
chair and in my chair, but I wanted to let you know that I 
really have enjoyed working with you and your staff. It has 
been a privilege and I wish you the very best. Thank you.
    [The prepared statement and biography of Patricia McNeil 
follows:]



    Mr. Porter. Ms. McNeil, it has been our pleasure and you do 
such a wonderful job there. Obviously, you care very deeply 
about the work that you are doing and are immersed in it and 
making great headway.

                  A NEW NAME FOR VOCATIONAL EDUCATION

    Should we call this vocational education anymore? It sort 
of seems like a word that is out of time.
    Ms. McNeil. Exactly. I think not. It would take an act of 
Congress to change the name of our office.
    Mr. Porter. What would we call it?
    Ms. McNeil. Well, several of the largest organizations that 
work with vocational teachers and with students have changed 
their names to career and technical education. I think 
professional and technical education, because really we are 
promoting now career clusters that a young person could explore 
in high school and go all the way up to become a lawyer or a 
doctor, an architect, or jump off at any point along the way. 
So I think that a new name is definitely in order.
    Mr. Porter. It is not that the word vocational has a bad 
connotation. It just has a different connotation than the time 
we are in. I think we really do need to change it. You went to 
Adlai Stevenson without getting a visa from me?
    Ms. McNeil. I understand you were invited.
    Mr. Porter. I was invited. I couldn't come. I am glad you 
got there at one of the schools in our district we are very 
proud of.
    Ms. McNeil. It is a wonderful school.

                           FUNDING PRIORITIES

    Mr. Porter. You talked about tripling and doubling this and 
that throughout your opening statement. The overall increase 
for your area is 4.1 percent. What are you decreasing in order 
to double and triple in other areas?
    Ms. McNeil. Well, of course one of the areas that we are 
increasing is Tech-Prep.
    Mr. Porter. And you are decreasing School-to-Work. I 
understand that. But that doesn't do it all, does it?
    Ms. McNeil. There is also a decrease in the vocational 
education basic grant.
    Mr. Porter. The State grants?
    Ms. McNeil. Yes.

                  JUSTIFICATION FOR TECH-PREP INCREASE

    Mr. Porter. Why is Tech-Prep more--we are getting in where 
the rubber meets the road between Republican philosophy and 
Democratic philosophy here. Why is the Federal Government 
saying let's do Tech-Prep and let's forget the State grants? 
Are the States unable to do what we think they ought to do? Are 
some of them way behind the curve here? Why should we dictate 
the program that the money is spent on?
    Ms. McNeil. First of all, we are not abandoning the Basic 
Grant. What we are trying to do, and we see Tech-Prep as a real 
change agent in this, is really change what vocational 
education, technical professional education, career education, 
is really all about. And Tech-Prep has the components of high 
academic standards. Teaching, helping students learn in the 
context of careers, internships, partnerships with secondary 
and postsecondary education and with employers. It has the 
components of a strategy that we have seen now across the 
country in a variety of different high school reform efforts 
that really makes a difference now in student achievement.
    So if you will, we are putting our money into Tech-Prep 
right now to try to build that strategy, both in Tech-Prep and 
to infuse it into the basic vocational education grant. We are 
working real hard on accountability standards for voc ed, on 
teacher preparation, on really changing the whole look of voc 
ed by adopting these new 16 career clusters that include things 
like information technology, arts and communications, science 
and technology, and transportation, areas that are not 
traditionally thought of or offered in vocational education.
    We are doing this so that over time, funds that do flow 
into the Basic Grant can be used on future focused activities. 
So we are really in a transition phase right now.

                     FUNDING FORMULA FOR TECH-PREP

    Mr. Porter. How is the money for Tech-Prep distributed to 
the States? Same formula that we do State Grantson?
    Ms. McNeil. The formula is the same as the State Grants. 
Now, when it gets to the States for Tech-Prep, States have a 
choice. They can either distribute it by formula to local 
consortia or they can run competitions. About half of the 
States use a formula and about half use competitions. What we 
are proposing is that the increase for Tech-Prep, the 
$200,000,000 increase, be used to support Tech-Prep programs 
that have all of the components of Tech-Prep because this is 
where the payoff really comes from, and because there has been 
so little money in Tech-Prep some consortia have only been able 
to implement one or two of the components, not all of them. So 
we want this money to be used to implement all of the 
components.

                         Performance Standards

    Mr. Porter. Let's talk for a minute about performance 
standards. And you have described very clearly about the States 
and their reporting requirements. What about performance 
standards within your own office? In other words, tell us how 
you are meeting those and what you are doing to enforce them.
    Ms. McNeil. Well, our goal in our office is to provide the 
highest quality information, the highest quality technical 
assistance to the States, to local educational agencies, to 
community colleges. We have organized our research strategies 
around those things that we think can make a real difference, 
and around those things in which our customers tell us are most 
important to them. All of my managers have--first of all, I 
have an agreement with the secretary that is focused on 
increasing student achievement. Are programs doing the kinds of 
things that make a difference for students? Then my managers 
have those performance standards incorporated into their 
performance agreements, and so on all the way down to all of 
our staff. But that is not the only thing that can really drive 
an organization. You really have to have a vision for where you 
want to go, and people really working very hard to achieve that 
vision, and I think that we have that in our office.
    Mr. Porter. I think you do also. I am going to ask one more 
question, and then I am going to call on Ms. Pelosi, because I 
know she has responsibilities elsewhere this morning. Do you 
not?
    Ms. Pelosi. Yes.
    Mr. Porter. Are you ready now? You can go ahead right now 
if you want.
    Ms. Pelosi. No, please, Mr. Chairman.

          Set-Aside for English Literacy and civics education

    Mr. Porter. Last year we included special language would 
set aside a portion of the increase provided to adult education 
State grants to be targeted for intensive English as a second 
language in civics education services to States with the 
largest number of persons in need of such services as well as 
the areas with the largest relative growth. How is this 
initiative working so far? We have heard from several 
organizations in the adult literacy community that operating 
such a program through the State grant system is most 
efficient, since there is already an infrastructure in place to 
provide these services, and since nearly half of all new 
entrants into adult education are seeking English as a second 
language service. Yet your budget requests continuation of this 
program through a separate line item that would require States 
to compete for the funds.
    Why do you think this approach is better than targeting the 
funding through the State grants program as we did last year?
    Ms. McNeil. First of all, these programs are forward 
funded, so right now what we are doing is we are making grants 
from FY 1999 funds. We had $7,000,000 in FY 1999 to make grants 
to local programs or States, and we are just finishing up that 
competition. We have had a large response. We had about 164 
applications for just $7,000,000. The applications totaled 
about $75,000,000. They came largely from community-based 
organizations, and then I think the second largest number of 
grant requests came from postsecondary institutions. We had a 
few States apply.
    Under the formula factors laid out by Congress, we are 
going to be able to fund 33 States probably this year with the 
FY 2000 money. We believe we would like to fund both States and 
locals. We know there are pockets of high concentrations of 
limited English proficient adults who need services, who aren't 
going to be in those 33 States. I think we got applications 
from about 10 States that won't--so these are from CBOs or from 
postsecondary institutions. They won't be in the States that we 
fund this year under the formula. So we think an approach that 
would allow us to fund both States and localities where there 
is need makes the most sense to us.
    I would like to say that the way the funds are appropriated 
for the basic grant in adult ed, States have the flexibility to 
put money into either adult basic education or English as a 
second language or into GED, or into high school equivalency. 
The States make that choice, and increasingly, States that have 
high concentrations of low-level literate students have made 
the choice to put the money into ESL .

         ALLOCATING ENGLISH LITERACY AND CIVICS EDUCATION FUNDS

    Mr. Porter. The agreement we reached last fall with OMB 
provided that half the increase go to those pockets of growth 
in States without large numbers of immigrants; is that right?
    Ms. McNeil. The formula requires us to allocate 50 percent 
based on overall need and 50 percent based on recent growth. So 
basically, you want to look at need, so you want to look at 
large numbers, and then you want to look at where there have 
been surges of immigration in certain States. So that is what 
the law asks us to do. We have been working with the Census to 
come up with a formula that can address both of those factors, 
and when we do that, about 33 States are eligible then to get 
money. We haven't announced what those amounts are going to be, 
but as you would expect, the five States that have the highest 
concentrations, and Illinois is one of those, get the most 
money under this formula. I think Illinois is going to get 
about $1,280,000, something like that.
    Mr. Porter. Thank you.
    Ms. Pelosi.

      IMPACT OF SHIFTING FUNDS BETWEEN STATE GRANTS AND TECH-PREP

    Ms. Pelosi. Thank you very much, Mr. Chairman. Secretary 
McNeil, welcome. Thank you for the important work that you do. 
Ms. McNeil, my questions are related to the Tech-Prep and all 
the preparation we are doing in the technology area. First, I 
do want to ask, though, that many community colleges, including 
those in California, have voiced concern that the 
administration's budget request will cut ongoing services in 
basic--in the Basic State Grant program while these colleges 
support the $200,000,000 for Tech-Prep, and I know that you 
touched on this or addressed this earlier. Please highlight 
what the impact would be onthe $200,000,000 cut on the Basic 
State Grant. I am not saying that we shouldn't do the Tech-Prep, that 
is for sure, but I hate to see it come out of the Basic State Grant.
    Ms. McNeil. Right. I appreciate that. Of course, we have 
heard, too, from a lot of people very concerned about what is 
going to happen with the cut in the Basic Grant. I understand 
their concern. I think in the case of community colleges, the 
States make their choices as to where to put their money. Do 
they put it in secondary vocational education, technical 
education, or do they put it at the community college level? 
Interestingly, we have already seen a few States decide to 
switch a little bit more money over to community colleges. In 
general, the balance is about 63 percent into secondary 
schools, about 37 percent into post secondary institutions.
    So should this level of appropriations be agreed upon, I 
think we probably would see some States look at how they make 
that split between the two levels of education. The nice thing 
about Tech-Prep is that it involves consortia of both community 
colleges, some 4-year institutions, businesses, and high 
schools. Most of the emphasis in Tech-Prep when we had 
$106,000,000 was at the high school level. Our hope is that 
when you change the curriculum at the high school level and you 
start thinking differently about what goes on at the high 
school level, then you need to start thinking differently about 
what goes on at the community college level--what goes on in 
those classrooms, what kind of courses are offered--so that the 
increase in Tech-Prep should also benefit community colleges 
and their curriculum and their technical and professional 
programs as well.
    Ms. Pelosi. But wasn't there an opportunity that you saw to 
have the $200,000,000 be additional rather than taken from the 
Basic State Grant?
    Ms. McNeil. Now, I am Assistant Secretary for Vocational 
and Adult Education and frankly, of course, I think there 
wouldn't be an assistant secretary that would come before you 
and wouldn't say that they would want more money for their 
programs. When you have a $41,000,000,000 budget request for 
education, there are choices that are made. This was the choice 
that was made in this case in my area.

                  COMMUNITY TECHNOLOGY CENTERS REQUEST

    Ms. Pelosi. Well, it is unfortunate--I understand the 
realities of life here, but as I always say about this bill, it 
is lamb-eat-lamb, because there are so many good things and in 
order to do what needs to be done for the future, we need some 
additional resources. Sticking with the tech, I see that you 
triple the budget request for community technology centers from 
$32,500,000 to $100,000.000 would fund up to 1,000 centers and 
take important steps in closing the digital divide.
    I am familiar with Oakland's YMCA of the East Bay Center 
near San Francisco.
    So much of what we are talking about in technology, 
bringing people up to par is about school-aged kids. Please 
spend a little time on workforce training, people beyond the 
community college. Some may be returning to community college, 
and that's what I would like to hear about. What role these 
centers play in workforce training as opposed to the K through 
12 education, other than those returning from the workforce to 
be retrained.
    Ms. McNeil. We had a meeting of the first 40 grantees a 
couple months ago and I went. It was very interesting to hear 
the wide variety of services that they are either providing and 
going to expand or that they intend to provide. And a 
significant number of them were focused, of course, on both 
getting children to come into the center with their parents, 
and on this whole aspect of helping people use computers, 
because that is the ticket now to getting a good job.
    Ms. Pelosi. I'm sorry, helping?
    Ms. McNeil. Helping adults be able to use computers because 
that is the ticket to getting them a good job, really. And so 
each of these centers has a number of sort of coaches, 
facilitators on site to help people learn how to do resumes, 
for example, to help people learn how to do basic word 
processing, use spreadsheets, and do that kind of activity. A 
number of the centers are linked up with one-stop centers under 
the Workforce Investment Act, and so definitely literacy 
skills, job skills, particularly computer skills--how to use 
the computer to surf the Web and look for jobs--many, many of 
these community technology centers are focusing on that kind of 
activity for adults in their communities.
    Ms. Pelosi. I appreciate that. I would hope also that would 
go further and there would be training, not just on how to use 
the computer and how to do a resume and do a job search on the 
computer, but that there would be technical training beyond 
that. I know you are not having--maybe not changing people into 
engineers in mid life, but there are other jobs other than just 
work station jobs, installations, all kinds of other things 
that relate to getting high paying jobs. In Silicon Valley, 
people who install these boxes for the next wave of technology 
make $50,000 a year and they don't have enough people to do 
that. So when I say ``technology,'' I don't just mean how to 
use a computer. I mean how to make themselves prepared for 
other jobs in the technology world that are beyond the desktop.
    Ms. McNeil. And there I see, particularly when these 
centers are located at community colleges, that is a wonderful 
place to make that kind of a connection between the technical 
training and just the use of the computer. And that is 
happening as well. I think one of the untapped potentials, too, 
of these centers is, of course, the whole virtual education 
realm. One of the things we are exploring in vocational 
education now is using simulated training for one thing so that 
you don't actually have to have this expensive equipment on 
site, but you can use simulation software to help you have the 
experience of using the equipment. And then also just the 
delivery of this enormous range of courses and information via 
distance learning coming right into a community technology 
center opens up a wonderful world of possibilities, I think, 
for adults that don't have access to this at work or at home.
    Ms. Pelosi. Thank you very much, Secretary McNeil. Thank 
you, Mr. Chairman.
    Mr. Porter. Thank you, Ms. Pelosi.
    Mrs. Lowey.

             SERVING WELFARE RECIPIENTS IN ADULT EDUCATION

    Mrs. Lowey. Thank you, Mr. Chairman.
    Welcome, Secretary McNeil. Last year you and I discussed 
the decrease in the number of welfare recipients going into 
adult education, and I recall you saying it was about a 12-
percent decrease. And I am very concerned that as some Federal 
welfare reform transition programs expire, we will see this 
trend accelerating. Most States have a work-firstpolicy, but 
there are many who don't have the basic skills to go to work. Many have 
literacy problems, substance abuse problems or children with acute 
medical problems.
    I would like you to elaborate on the literacy problems and 
the findings about learning disabilities among welfare 
recipients and then to follow up on my colleague, Congresswoman 
Pelosi's comments. I have been a strong advocate, second year 
of education at the community colleges, in particular, for 
welfare recipients, because what I see happening at Westchester 
Community College, training people to be radiologists, 
dieticians, they get out of there and they are making $25,000-
plus, so as you were saying, there are careers that we should 
be training these women and men, this program happens to be, 
particularly for women, they are providing child care on site, 
and then they provide ongoing technical assistance. So if you 
can comment first on the literacy problems, the learning 
disabilities, and then the possibilities of insuring that we 
can--the possibilities of doing something with welfare reform, 
so we can get that second year of education.
    Ms. McNeil. What I would like to do, is provide for the 
record, and also tell you some of the things we have been doing 
to really try to make it possible for more welfare recipients 
to have access to education and training, even under the 
current rules and regulations. One of the things that we have 
done is we brought a group of community college presidents here 
in Washington to really talk about the challenges of keeping 
welfare moms, in particular, in school once they are employed. 
They have family responsibilities, and they have work 
responsibilities and now they have school responsibilities.
    [The information follows:]



    Ms. McNeil. It is a big challenge. Tom has just handed me a 
note. He says we are doing a joint letter on serving the 
welfare LD population with HHS about the options to use--oh, 
the surplus for TANF. That is good.

              ADDRESSING NEEDS OF LEARNING DISABLED ADULTS

    Mrs. Lowey. The learning disabled you are talking about?
    Ms. McNeil. Exactly. This to me right now, the learning 
disabled population that have not been identified really well, 
that is a big--I think should be a big focus of our concern 
about those who are still on the welfare rolls or those who 
left the rolls and aren't being able to advance in a career. 
The State of Arkansas has just recently decided to assess all 
of their welfare population for learning disabilities, and a 
number of other States are moving in this direction.
    We think that is very, very promising. The National 
Institute for Literacy Center on Learning Disabilities 
developed a training packet for teachers and administrators on 
how to do good assessments of people with learning 
disabilities. In connection and in collaboration with the 
Institute, we have been getting that material out into the 
hands of people in our adult education programs. I think that 
is really for all of education really, this whole area of 
learning disabilities has got to be a critical focus of our 
efforts. I think we sometimes say people aren't trying, they 
can't do it when it is really a learning disability that has 
gone undiscovered for many years. So people themselves get 
discouraged. Once they know they have it, then they can 
overcome it. I had an engineer in my office the other day who 
had severe dyslexia, was just talking about how difficult it 
was to overcome that challenge, but once he knew about it, then 
he could do something about it. I think that is what we have 
really got to focus on or one of the key things we have got to 
focus on in really getting to the folks that remain on welfare.
    Mrs. Lowey. But then, of course, as Ms. Pelosi said, there 
are some very good jobs that people can be trained for, 
depending on the kind of disability or the extent of the 
disability, and I think from what I have seen at Westchester 
Community, Mercy, Pace, other colleges, we can do this and they 
can be productive members of society, but perhaps they need 
more direction, and we have to do a better job of providing 
access to the education and direct them. Look, there are a lot 
of people without learning disabilities that are having 
difficulty in this new workforce today figuring out who they 
are, what they want, and what kind of training they should get.
    So these people have a lot of strikes against them. I just 
am very interested in knowing, and perhaps if you could follow 
up with me at some other time, providing that information as to 
the kind of training that is actually occurring, either in the 
high-tech community or as I mentioned radiology, dieticians, et 
cetera.
    [The information follows:]
         Serving Welfare Recipients With Learning Disabilities
    The Office of Vocational and Adult Education (OVAE) has trained 
State Staff on how to serve welfare recipients with disabilities. We 
are providing technical assistance to State and local staff in 
California, Texas, Minnesota, Virginia, Maryland, Missouri, New 
Hampshire, Rhode Island, and Georgia. We plan to work with Alaska, 
Oklahoma, and Oregon.
    Virginia, Maryland, Minnesota and California all have State LD/TANF 
taskforces. California's taskforce is TANF led; Virginia and 
Minnesota's taskforces are led by vocational rehabilitation; and, 
Maryland's is led by adult education. Virginia has appropriated about 
$15 million for disabilities and TANF.
    The Division of Adult Education and Literacy will develop 
strategies to address the issues of adult LD and ESOL populations. The 
effort would include creating a process to develop a ``field accepted'' 
testing protocol and a validation process for development of screens 
for learning disabilities (LD) in adults who have Spanish as their 
primary language.
    We are looking at a three-step process for this effort:
          1. Convene a national working meeting on issues and 
        diagnostics and screening for LD adults who have Spanish as 
        their primary language.
          2. Field test various screens for LD in States, using the 
        diagnostic protocol as the basis for evaluation of the screens 
        ability to predict LD.
          3. Conduct a statistical evaluation of the field tests and 
        issues findings on predictability of the screening efforts.
    This effort will require other Federal, State and local partners to 
complete the work. The National Institute for Literacy (NIFL) is on 
board as one Federal partner and will help with travel costs. Several 
California counties as well as the States of Massachusetts, Virginia, 
Arizona and Texas have agreed to support the Spanish effort with field 
testing of screens. All are looking at screening programs, with several 
having pilots underway. At the local level, we have forged a 
partnership with the City of San Antonio, Department of Community 
Initiatives.

    Another thing at Saunders Trade and Technical High School 
in my area, Yonkers, the curriculum includes a program of 
English for specific purposes within the English-as-a-second-
language program. Could you tell us how that helps young people 
in their vocational training?
    Ms. McNeil. Yes. First of all, Saunders is one of our 
stars. I was saying to Mr. Porter, we have a New American High 
School in his district. Saunders is a New American High School 
in your district, and it is an exciting form of learning. I 
think it is not just the kind of learning that we need to do 
with youth. We need to do it with adults as well. When you 
learn in the context of something that you are interested in or 
something that you really want to know about, then you are much 
more motivated to learn. When you understand why English is 
important and good communication is important, why math and 
science are important, how you can use these, how they relate 
to something that you are interested in, then that learning 
comes alive and you are much more likely to learn it and you 
are much more likely to retain it. And I think this is part of 
unlocking the learning key for lots of people in this country 
that have not been very successful in our traditional 
approaches to schooling and education.

            Expanding Access to Community Technology Centers

    Mrs. Lowey. Well, I thank you very much, and I know there 
was some discussion about the digital divide and the community 
technology centers, and I don't know if you have anything to 
add on that. What I find extraordinarily frustrating because my 
district is so diverse, I go to some schools like East Chester 
High School, and each youngster has a computer at every desk, 
at home and in the office, and I go to other high schools which 
I don't think I will name right now and they are lucky if they 
see a computer once a week. It is almost as if when we were 
growing up we went to pencil labs or pen labs, and this is 
totally unacceptable. So if you wanted to update us further on 
the efforts to expand access to community technology centers, 
we would welcome it. My time is up, so if you have anything to 
add, you can.
    Ms. McNeil. I just would say I think at the Department in 
general, one of our big emphases has been both getting the 
technology into the classroom and then helping teachers in 
particular know how to use the technology well so that they 
could take the biggest advantage of it. The advantage that we 
see at community technology centers--and a number of them are 
located at schools--the advantage that we see is here is an 
opportunity for students who perhaps go to schools that don't 
have the most technology right now to really have an 
opportunity to get on-line, to experiment, and to have some 
coaching and help in doing that.
    Mrs. Lowey. Thank you very much.
    Thank you, Mr. Chairman.
    Mr. Porter. Thank you, Mrs. Lowey. We will have time for a 
second round. Five minutes each.

           Sustaining School-To-Work After Authority Expires

    The Federal school-to-work program expired.
    Ms. McNeil. Yes. Expires. It is not done yet.
    Mr. Porter. I thought it expired September 30, 1999.
    Ms. McNeil. No, just the authorization for funding ends 
September 30, 2000. The law itself doesn't expire until October 
1, 2001.
    Mr. Porter. So the money is still in the pipeline?
    Ms. McNeil. Yes.
    Mr. Porter. Your budget requests no funding for the 
program. It is now up to the States to continue to sustain the 
School-to-Work transition systems that have developed using 
Federal seed money. This was meant to get them started.
    Ms. McNeil. Exactly.
    Mr. Porter. I understand that Perkins Act funds will be a 
major source that States and localities will be able to usefor 
sustaining these systems. Do you believe that the budget request 
provides adequate support for States to maintain effective 
comprehensive vocational education services through the use of these 
funds?
    Ms. McNeil. Well, first of all, Tech Prep--excuse me, 
School-to-Work does expire. A number of States have already 
passed legislation, their own State legislation, to continue to 
support School-to-Work. A number of States have put up money to 
continue School-to-Work, and we expect to see that continue as 
some of the States that came on later into the implementation, 
as their money begins to dwindle, we expect that more States 
will take action.
    I think that in looking at the amount of money available to 
continue School-to-Work, you have to look at a variety of 
sources. First of all, again, our increase in Tech-Prep really 
is part of a key strategy to help States continue the kinds of 
things that School-to-Work was supporting. In many States, 
Tech-Prep was the foundation for School-to-Work. We have made 
some changes to Tech-Prep to incorporate the lessons we have 
learned from School-to-Work and so the increase in Tech-Prep 
will help continue School-to-Work. Then I think the 
administration's various requests for high school reform, the 
Small Schools investment, the $120,000,000, should be looked at 
as a way to continue the thinking about how to help young 
people make strong transitions from high school to college and 
then from college to careers.
    So you really have to look at sort of our whole budget 
investment. The Office of Educational Research and Improvement 
is investing in some models for high school reform. We have our 
AP investment at the Department. So you have to look at really 
the whole menu, if you will, of investments, I think, to see 
what monies will be available to continue the work that School-
to-Work has started. What I would like to do for the record is 
just provide you with a list of those investments so you can 
see how they fit into part of the strategy.
    [The information follows:]



    Mr. Porter. This strikes me as one of the very few times 
when a program that was supposed to go out of existence is 
actually getting out of existence, and then perversely you get 
the feeling that maybe it will simply be dropped by the States 
and we won't be able to sustain it as they should sustain it.
    Ms. McNeil. I really don't think that is going to happen, 
because I think that everyone's concerned about this transition 
of young people all the way through the school system and then 
after school. We know that even though we have record numbers 
of young people going to college, for example, there is a lot 
of remediation, and half of them drop out by the end of their 
sophomore year. We have got 25 percent of our young people who 
don't even complete high school.
    So I think that the partnerships that have been developed 
at the State level and at the local level between schools and 
colleges and business people and community leaders recognize 
the power in that. They recognize the need, and I don't think 
we are in danger of losing the tenets of School-to-Work. I 
think that there are a lot of people out in the field who wish 
Federal support was going to continue.
    The administration did take a look at this and said, well, 
our investment was in seed money. We want to continue this in a 
variety of other ways, and as I mentioned, Tech-Prep is one of 
those.

          Earmarking Tech-Prep Increase For Competitive Grants

    Mr. Porter. In Tech-Prep, you propose $200,000,000 
increase, and you have requested authorizing language to 
require States to compete their additional allocations. Why do 
you believe this language is necessary and why was this change 
not made through the reauthorization of the Perkins Act which 
took place just a year and a half ago?
    Ms. McNeil. Well, we tried to make that change. The bill 
that the administration sent to Congress actually did include 
language to have all of the Tech-Prep money competed once it 
got to the States. We were not successful in that, and yet the 
more we looked at this and the more we have had experience 
with, as I mentioned, our New American High School investment, 
School-to-Work and other high school reform efforts, the more 
we have looked at the research, we really see that of 
strategies that is embodied in Tech-Prep can pay off for young 
people in terms of improved student achievement. We think it is 
important to implement all of the strategies, and as I 
mentioned earlier, because the funding has been so low in most 
States and in most areas, they haven't been able to implement 
all of the strategies.
    We think by competing the funds and putting the emphasis on 
the full model of Tech-Prep, we are going to be able to get 
much more powerful results for young people. In fact, we have 
been doing some research in a limited number of Tech-Prep 
consortia, and although that research isn't done, when we have 
looked at the interim results at least, we find that those 
places that have really implemented all of the components are 
getting much higher results than places that have limited 
implementation.
    Mr. Porter. What if we are able to put the $200,000,000 
increase in our bill but we are not able to get the authorizers 
to sign off on the authorizing language that is needed? What 
happens to the $200,000,000?
    Ms. McNeil. Well, then it would be actually given out as 
States are giving it out now. As I mentioned, about half of 
them give it out by formula. About half of them give it out by 
competition. We have such a good strong workingrelationship 
with States that I would hope that we could start moving them in the 
direction of trying to push for more high-quality, full-blown models of 
Tech-Prep. But of course, it will make it easier if it is in the 
appropriations language.
    Mr. Porter. If I understand correctly, you have told me you 
couldn't get the authorizers to do this a year and a-half-ago.
    Ms. McNeil. We could not.
    Mr. Porter. Now you are asking me to get the authorizers to 
do it and I am not sure I can get them to do it either.
    Ms. McNeil. I am asking you to really take the increase, 
the $200,000,000 increase. The first $106,000,000, that could 
still be spent the way it has traditionally been spent, but we 
are going to put some more money into this. We are really 
looking for results, and therefore, if we can put this caveat 
on this increase, that it needs to support the full model of 
Tech Prep, then I think we can get more bang for our buck.

                       Adult Literacy Initiative

    Mr. Porter. The budget justification mentions four goals 
set forth by the President in his adult literacy initiative. 
These goals are that by 2005, we will increase the number of 
full-time teachers by 20 percent, double the number of 
instructional hours per student, triple the number of computer 
stations available, and more than double the amount of child 
care and counseling services available for students.
    Two questions. First, how much will it cost to meet these 
goals by that time? But more importantly, these sound like the 
old kind of goals we had once filtering around our government. 
They aren't outcome goals. They aren't what affects the student 
engaged in the program and what they have achieved. Shouldn't 
we have student achievement outcomes as the goals of our 
investment?
    Ms. McNeil. Yes. Let me start with your second question 
first, because very definitely more teachers, more technology, 
more time on task, those are means to an end. Our GPRA goals 
are all student achievement-based goals. And our entire 
accountability system for adult education and for vocational 
education is all based on student outcomes. So we are 
definitely having a student outcome-based system. We found that 
by just setting the standards and saying this is what we want 
and not paying attention to what it really takes to get there, 
what you have got is a group of goals sitting out there and 
maybe the time will come 2 or 3 years out, and you won't have 
achieved the goals. I think we are trying to have a combination 
strategy here of getting programs to focus on those inputs that 
researchers told us make a difference in getting and improving 
student achievement. So that is the way we are thinking about 
this.
    Mr. Porter. So you have both of them. You have the student 
outcomes and the means to get there as you see those means. 
What about the cost?
    Ms. McNeil. The cost, I think, originally we were looking 
at about a billion dollars over time to achieve those input 
goals. Now, monies for adult education come from the States and 
from the Federal Government. Since the President laid out those 
goals, we have had a steady increase in the amount of money--in 
fact, some historic increases in the amount of money that the 
administration has requested for adult education. I think as 
long as we continue to make progress with the goals of student 
achievement, that is the direction that we want to head in. We 
should put more resources into this program so we can get serve 
more people and get the outcomes we want.

         No Funding for Occupational and Employment Information

    Mr. Porter. My last question. Congress last year provided 
$9,000,000 for the National Occupational and Employment 
Information Coordinating Committee and funded it through your 
office. Previously, this activity had been funded through the 
Department of Labor. This year your budget requests no funding 
for occupational and employment information activities. Could 
you explain to us why you don't believe this funding is a 
priority, and do you believe this program serves or doesn't 
serve an effective Federal purposes, and where do you recommend 
States find resources to carry out career guidance counseling 
and career information planning training programs that are 
currently sponsored by the NOICC.
    Ms. McNeil. Basically, the National Occupational 
Information Coordination Committee, I should point out, was 
part of the Labor Department's budget. It used to be jointly 
funded by our office and the Labor Department. And as part of 
the reauthorization of the Perkins Act, Congress changed the 
focus of the NOICC activities to be those primarily of 
education and guidance and career information. And those 
responsibilities will transfer to my office as of July 1st. 
About 85 percent of the money goes out to States and about 15 
percent of the money stays in Washington to promote 
coordination among the States and national activities.
    Again, this was a matter of choice in a big budget with a 
lot of initiatives. I can assure you that when the money comes 
over to my office, the time that I have money and those 
resources available this year, I am going to use them just as 
wisely as I can to promote the goals of the Act. I think we 
will use the $9,000,000 that we have this year very wisely.
    Mr. Porter. So you are simply saying you don't need the 
committee. You can do the work through your office?
    Ms. McNeil. No, I am saying--no, I am not saying that.I am 
saying that the money that I got this year I am going to use as wisely 
as I can. The States do get 85 percent of that $9,000,000. I am just 
saying that with the budget choices that were made this year in light 
of all of the priorities that we are doing within the Department, the 
NOICC funding was not included in our budget.
    Mr. Porter. Well, you have answered all my questions. You 
are doing a fine job there. We very much appreciate your work. 
I consider it a great pleasure to have had the opportunity to 
work with you and with your fine staff and your office, and I 
think with all of these matters in education, it is fascinating 
that both the administration and the Congress, as the American 
people have, have placed this as a very, very high priority. We 
agree in a lot of areas, but naturally everyone wants to see 
where we disagree instead of where we can work together. I 
think we can work very well and the disagreements are fairly 
minor in terms of what it will mean in people's lives and the 
outcomes. So I appreciate the fine job that you are doing 
there, Ms. McNeil. We will miss you.
    Ms. McNeil. Thank you very much. Likewise.
    Mr. Porter. The subcommittee will stand briefly in recess.
    [Recess.]
    [The following questions were submitted to be answered for 
the record:]



                                         Wednesday, March 15, 2000.

             OFFICE OF EDUCATIONAL RESEARCH AND IMPROVEMENT

                               WITNESSES

CYRIL KENT McGUIRE, ASSISTANT SECRETARY FOR EDUCATIONAL RESEARCH AND 
    IMPROVEMENT
THOMAS P. SKELLY, DIRECTOR, BUDGET SERVICE, OFFICE OF THE UNDER 
    SECRETARY
CAROL A. CICHOWSKI, DIRECTOR, DIVISION OF SPECIAL EDUCATION, 
    REHABILITATION AND RESEARCH ANALYSIS, BUDGET SERVICE, OFFICE OF THE 
    UNDER SECRETARY.
    Mr. Porter. The subcommittee will come to order. We 
continue our hearings on the budget for the Department of 
Education with the Office of Educational Research and 
Improvement. And we are pleased to welcome Dr. C. Kent McGuire, 
assistant secretary. Mr. McGuire, it is good to see you. Why 
don't you proceed with your statement and then we will go with 
questions.

                           Opening Statement

    Dr. McGuire. Thank you, Mr. Chairman. I appreciate the 
opportunity to discuss our budget with you. I am satisfied with 
my written testimony. It seems pretty straightforward in terms 
of covering the facts. As with the prior budget, we are 
focusing on trying to improve our research quality and 
strengthen our dissemination outreach efforts, so I only want, 
by way of introduction, to place the discussion we will have in 
context by just saying these few things. First, I think we are 
really poised in this country to make significant improvements 
in our schools, if we organize ourselves to take advantage of 
the important advancements in knowledge about teaching and 
learning that we have made over the last 15, 20, 25 years. 
Secondly, I want to argue that that is exactly what I have been 
trying to do in the 18 months that I have been at OERI--trying 
to position the agency to take both thoughtful and strategic 
advantage of that knowledge base in ways that would accelerate 
the rate of change and cause us to be able to see those 
improvements on a much, much larger scale.
    It seems to me the way to look at the budget request that I 
made last year and this year is as a sort of modest but steady 
increase or investment in the kind of work that we need to do 
over time--kind of a downpayment, if you will. I hope that in 
the question-and-answer period, we can talk more about what 
being strategic and focused in this regard looks like.
    [The information follows:]



                         SIMILARITIES WITH AHRQ

    Mr. Porter. We have, as you know, HHS as well as the 
Department of Education and Department of Labor, and HHS has an 
agency that is very similar to yours in respect to the research 
needed on health called AHRQ, Agency for Health Research and 
Quality, and it is headed by John Eisenberg. I just wonder if, 
because you have similar missions, even though they are in 
different fields, whether you and Dr. Eisenberg ever talked to 
one another about the approaches that might be made to research 
and common applications that might work in both areas. Did you 
ever talk to John Eisenberg?
    Dr. McGuire. No, I have never talked to John Eisenberg. I 
probably should. I spent quite alot of time with Duane 
Alexander over at NICHD and some of his colleagues. We have a 
common interest in reading research, and have tried in a number 
of ways to partner with them in mounting new efforts. I have 
worked with a lot of them on peer review issues, and they have 
been very helpful, as we thought about how to ratchet up the 
nature and quality of our own research planning activities.
    So I think your suggestion to visit with a broader set of 
folks at NIH is probably a good one, but I have found visiting 
with Duane to be very rewarding.
    Mr. Porter. I don't know whether this would really be a 
good suggestion or not, but I know that Dr. Eisenberg 
doesexactly the same kind of work that you do and while the subject 
matter is different, I would think there would be some commonality of 
approach that might be worth just discussing and maybe if you sat down 
with him and had the discussion, you would find there wasn't any, but 
maybe you would find out there was a good deal and you each would learn 
from each other. I don't know. It is just a suggestion.
    Describe the main ideas of your proposed research 
initiative and why you believe it is better than the existing 
structure and what results you hope to achieve with it.

                    PROPOSED NEW RESEARCH AUTHORITY

    Dr. McGuire. The main idea of what is being proposed this 
year, Mr. Chairman, is to zero in on a relatively limited 
number of specific problems that the vast majority of people, I 
think, would agree we need to make real progress on. So, for 
instance, through the interagency education research 
initiative, one of the things for which we would propose an 
increase, the idea is to go directly after improvements in the 
teaching of reading, math, and science. It is one of those 
areas in which I think we are poised to take advantage of 15 to 
20 years of good basic research on how people learn to read, 
for instance. What is at issue here is mounting a focused 
research effort that is concerned directly with questions about 
what good teaching looks like, what good curriculum looks like, 
what good assessment strategies would involve and what will it 
take, most importantly, to do these things in many schools to 
help the vast majority of children. It isn't in opposition to 
our existing structure in terms of the way research is funded, 
necessarily, but it is in addition to lots of good basic work 
that we support and that other agencies do as well. The idea 
here is to worry specifically about what it will take to bring 
that knowledge productively to many schools.
    Mr. Porter. Your budget proposal is built around proposed 
new legislation which would create a new national institute for 
education research. I understand this proposed legislation has 
not yet been transmitted to Congress and has been under review 
by OMB for about 5 months. In the last 2 years, we waived a 
funding allocation provision of the Research Institute's 
authorization law in order to fund several projects. This year 
you are requesting a complete waiver of the Research 
Institute's authorization. I am concerned that this expansion 
of the waiver would not be appropriate while the OERI 
reauthorization is pending in the authorizing committee. When 
will the department submit its reauthorization proposal to the 
Congress?
    Dr. McGuire. We went to work early this last year to 
develop very specific ideas, Mr. Porter, about reauthorization. 
Midway through the year, we had some very encouraging signs 
from members that we might be able to actually work with the 
staff, in a bipartisan way, on writing a bill. In fact, the 
signal I got was to bring language to the table in bill form so 
that we could start the conversation. We took the time, went 
through the effort to have that language in bill form cleared 
by OMB back in mid August and sent it up to the Hill at that 
time. We met briefly with staff in September to go over any 
questions that they might have about that language, met with 
them again in early January to see whether or not the interest 
in continuing to work through those issues still existed. So I 
would characterize our position a little differently. It's true 
we haven't sent up a bill, we haven't looked for a sponsor to 
introduce a bill formally, but I think you could take the 
language we sent up as a formal position by the Administration 
clearly stating our views about reauthorization.
    And what we have done in our proposal among other things, 
is suggest authorization of a single institute. None of what we 
do under the five research institutes that we currently have, 
and the other things that we do under our current OERI 
authority would be precluded under this new language.
    Mr. Porter. So there is nothing pending in OMB at the 
present time?
    Dr. McGuire. That is correct.
    Mr. Porter. You have the language that you suggest for the 
legislation and you have had ongoing discussions or had some 
discussions with the authorizing committee?
    Dr. McGuire. Yes, sir.
    Mr. Porter. Thank you. The chair recognizes the father of 
Jessica. Congratulations, Jesse. That is just wonderful. This 
is your first child?
    Mr. Jackson. Yes, sir, it is.
    Mr. Porter. We didn't expect you here today. We thought you 
would probably be back home, but delighted to see you and 
congratulate you.
    Mr. Jackson. The only way I can get away from crying, sir, 
is to come to your committee.
    Mr. Porter. One is inclined to say get used to it.

                             DIGITAL DIVIDE

    Mr. Jackson. Let me thank you, Mr. Chairman, very much for 
your very kind remarks. I also want to join my chairman in his 
praise and welcome Dr. McGuire back to our committee.
    I would like to talk further regarding two areas of today's 
hearing that are of particular importance to many people 
throughout my congressional district, and it is going to center 
around community technology centers and adult English as a 
second language, ESL services. My first question is concerning 
digital divide. Last summer the Department of Commerce reported 
that digital divide, that is, the gap between those individuals 
who have access to cutting edge information technology and 
those who do not has been growing. The report indicated that 
over the last year, the gap between high and low income 
Americans has grown 29 percent. The gap between whites and 
Hispanics and African Americans is also growing. I was pleased 
to hear that the department funded four community technology 
centers in Chicago, including one in the second congressional 
district with fiscal '99 funds.
    I'm wondering if you could tell us more about the 
administration's plans for this program for fiscal year 2001 
and how can community technology centers help close our 
Nation's digital divide.
    Dr. McGuire. Mr. Jackson, I appreciate the question. It 
happens that that particular program is not located in my 
office. I would be happy, though, to visit with Trish McNeil, 
whose office that program is in to make sure you get an answer 
to that question. We are, certainly at OERI, concerned about 
that same issue. Through our National Center for Education 
Statistics, we are trying to make sure we know something about 
that divide, the distribution of technology and how it sorts 
out, and through our technology innovation grants, we are 
concerned about its more thoughtful and effective use. I would 
be happy to say more about those things if you are interested 
but that particular program is--it is located in a different--
--
    Mr. Jackson. Let me say, Mr. Chairman, that I justrealized 
that my questions are written for Ms. McNeil, so I want to submit them 
for the record.
    And I want to thank you for bringing that to my attention.
    Thank you very much, Mr. Chairman. I have no questions.
    Mr. Porter. Thank you, Mr. Jackson.
    Mrs. Northup.

                CURRICULUM MATERIALS FOR EARLY CHILDHOOD

    Mrs. Northup. Thank you. I want to welcome you, Dr. 
McGuire, and thank you for what you have brought to OERI. I 
know that you know and Mr. Chairman, you may remember that I 
was critical of OERI early when I got here for the lack of 
coordination between what went on at NICHD and other research 
that was done and the ability of OERI to coordinate it to sort 
of be a link between schools and the NICHD. There is so much in 
this area to be done. The more impressed I become with the 
research that we have done on how children learn, what the best 
approaches are, the more appalled I become at the fact that so 
many of our schools and teachers don't know these things. And I 
do believe that OERI is doing a very positive, or making a very 
positive effort in trying to help make that link and help get 
that information and help it be applied. There is so much more 
that needs to be done.
    In fact, I have to tell you, if I could line up the people 
in this room that come to me and say how do we make this link, 
and the fact that it is not being done and how discouraged they 
are by what is going on in our schools that fail to reflect 
what we know works, it is just very discouraging. Let me ask 
you a few questions related to these issues. Let me start by 
saying that yesterday we had somebody that testified here from 
Family the National Center for Family Literacy. Her agency is 
under contract, with the Head Start Program to help Head Start 
teachers become better teachers of literacy, both to children 
and to get their families engaged. She says that the NICHD 
information that they have is so wonderful and reflects what 
they believe would profoundly improve teaching but that there 
is additional linkage that needs to be made.
    In other words, NICHD says this is what we know. We know 
this is how kids learn. We know this is how their brains 
process this material. We know that this is when children tend 
to be behind, this is the sort of reason why. But then the 
materials to actually apply that and put it in the classroom 
don't exist. So when they go into the Head Start programs and 
begin to say these are the connecting links that have sort of 
failed, these children are behind a year or two because of 
these links, they don't have the materials to actually begin to 
help those children get through them. I know, for example, the 
D.C. program that Dr. Motes coordinates here, and what a 
profound effect it has had in D.C., there are some people 
developing these materials. What are you all doing to help 
either contract--I realize it may not be your responsibility, 
but then whose responsibility is it to develop the materials 
and to test whether or not those materials actually are 
effective and to get those into the Head Start programs in the 
early grades?
    Dr. McGuire. I appreciate your question. I think the 
problem is very aptly described and it goes to a lot of what I 
have been trying to argue here over the last year that you 
don't just run directly from the laboratory to the classroom, 
and there are any number of steps that would mediate the 
effective and thoughtful use of this knowledge base that we now 
have. It is not our place at OERI to develop curriculum 
materials and the like, though I think there is a lot we can do 
to foster and encourage the development of much stronger 
materials in this area. One of the tasks that we have to take 
on is to do a much better job, an effective job, of organizing 
what we know in ways that people can take more successful 
strategic advantage of it. I spent a lot of time in the last 
year and a half, about as long as I have been here, making sure 
that we begin to organize that knowledge base and summarize it.
    So here's a product that does that with respect to 
preventing reading disabilities in young children. Here's one 
that does it with respect to language minorities. Here's one 
that does that with respect to a large knowledge base from 
cognitive science about how people learn.
    [The information follows:]

    [Editor's note.--Three documents displayed by Dr. McGuire 
were:]
    Preventing Reading Difficulties in Young Children, 
Catherine E. Snow, M. Susan Burns, and Pet Griffin, editors, 
National Academy Press, Washington, DC, 1998;
    Improving Schooling for Language-Minority Children: A 
Research Agenda, Diane August and Kenji Hakuta, editors, 
National Academy Press, Washington, DC, 1997; and;
    How People Learn: Brain, Mind Experience, and School, John 
D. Bransford, Ann L, Brown, and Rodney R. Cocking, editors, 
National Academy Press, Washington, DC, 1999.]

    I didn't find that the easiest read, and you wouldn't 
either, so we triedto go further than that to have some of 
those questions very carefully elaborated from the vantage point of 
classroom teachers, administrators, policymakers and the like, so that 
we could be exceedingly clear about the kinds of steps that would 
foster that transmission of knowledge to practice. And I hope among 
other things that the research initiatives that we now propose, often 
in partnership with some of these other agencies, are really about 
going after these kinds of things.

                 RESEARCH FINDINGS IN TEACHER TRAINING

    Mrs. Northup. Well, I intend to speak to the chairman, at 
some point about making sure that we fund some sort of 
connecting link between research and actual application. I have 
some ideas on that and I will follow up on that. But let me ask 
a few more questions about the concerns.
    Specifically what is going on in our universities and 
colleges? The concern that I have is that you have many of our 
universities and colleges that are teaching people how to be 
teachers, and they are not using the research at all, that it 
hasn't been picked up, I guess, by the certifying institutions, 
whether it is teacher certification, the national teacher 
certification or the State teacher certification to require 
these universities to change their programs to reflect this. 
And it is amazing. You not only get complaints from the 
superintendent of the schools who complain widely but you get 
concerns by everybody from the learning disabilities coalition 
to Head Start groups and so forth. You also get concerns by the 
teachers who are in our schools who say that when they have in-
service trainings and they are conducted by the universities, 
the universities come out and give them information that they 
are trying to upgrade their skills and they are getting 
information from professors that don't know what the latest 
research is. Any suggestions about how we go about making those 
changes?
    Dr. McGuire. I certainly would agree that if we really hope 
to help the vast majority of teachers and prospective teachers 
to take advantage of the things we are starting to know about 
how kids learn to read, that we can't ignore our teacher 
preparation programs. I think that is absolutely true. We are 
aware of that at the Department. As I think I might have said 
to you last year, we probably have to elevate the importance of 
the problem above the School of Education or College of 
Education to the president's office and get that kind of 
attention on it.
    I was very pleased when in September, the Secretary sought 
to convene college presidents to have a conversation about this 
very issue. In terms of the kinds of things OERI can do to 
really strengthen that connection, I have been a real stickler 
about our being much more deliberate and focused in the way we 
plan the work that we do. We are setting up a handful of study 
groups, particularly in reading and mathematics, and I think if 
we did a better job of organizing the knowledge base so that we 
can say clearly what it is--if we can identify specific 
recommendations for the kinds of changes in teacher education 
programs that are needed, and there are some in here--and if as 
we plan new work, we involve those people up front in our 
discussions about the work we propose to do as well as how we 
think about our dissemination activities--all of those things 
improve the odds that some of these ideas will stick.
    Mrs. Northup. Mr. Chairman, are we going to get another 
round?
    Mr. Porter. Yes.
    Mrs. Northup. Thank you.

                    RESEARCH AND STUDENT ACHIEVEMENT

    Mr. Porter. Let me follow up on this and maybe I am at a 
little different point, but let's see. We used to have a 
program that existed for at least 14 years called the National 
Diffusion Network and OERI's research was diffused presumably 
to all the school districts, at least to the States, and made 
available to them to pick up on as good programs that help kids 
learn. To my way of thinking, to do the research and to 
disseminate it is not enough. You have got to go beyond that 
and see whether somebody picks it up, whether the teachers get 
trained to use it, and most importantly, whether it has an 
effect on the kids' actual achievement in the classroom. So can 
you tell us what outcome-oriented indicators you used to get 
from the research to the end line where it makes a difference 
in kids learning?
    I am not sure I am asking the same thing you are asking, 
but maybe I am.
    Mrs. Northup. It is similar.
    Mr. Porter. I want to know how do we get from the starting 
point to the end point. The end point isn't just to put out 
research. The end point isn't just to disseminate research. The 
end point isn't even to teach teachers how to teach. It is to 
get kids to learn. How do we get there?
    Dr. McGuire. I appreciate the question very much. I would 
argue that part of our frustration with what we did and didn't 
accomplish with things like NDN had to do with assumptions 
about just how linear that problem is, that, in fact, you could 
just do the research, and then as long as you had ways of 
helping people access it, they could just pick it up and they 
know just what to do with it.
    I think we are getting a lot smarter about the things that 
are involved. It is a much more complicated thing--this 
effective knowledge mobilization and use--than simply putting 
the document up on the Web so that a classroom teacher can 
access it. One of the first things I did when I had the 
pleasure of coming to work in Washington was to ask some folk 
to go out to the field and investigate what it is people are 
trying to do right now, what is it they are really struggling 
with? Where do they go for information right now? Are they 
particularly satisfied with what is available to them? Are any 
of the things that we fund and support popping up on their 
screens and could you give me some advice about how we might 
better organize to meet that demand, if you will? And while 
that is a much bigger study than I would argue we really 
conducted, I did get some very useful advice.
    One of the things that I was told was, ``Kent, you should 
trust your instincts and focus on a problem, take some of those 
things that the field says it is interested in, and then try 
and understand fully the dimensions of that problem.'' For 
example, what would it take to help substantially all kids 
learn to read by the time they are in the third or fourth 
grade? And once you do that and you can identify some very 
specific questions, that is when you learn that part of it is a 
question of how much do we really know about how to do that and 
how can we organize a knowledge base in ways that make it 
clearer.
    Part of it is do we understand enough about the 
transmission mechanisms through which that information really 
does travel? So we need to worry about the quality of 
curriculum materials, the quality of professional development 
programs. We need to worry about the nature of 
teacherpreparation programs and the like. We need to have strategies 
that pursue all those lines of inquiry.
    Another thing that we have been charged with doing by the 
Congress, I think because of the same concern, was the 
introduction of this idea of expert panels in which we could 
get people to take a look systematically at what is out there 
now and ask questions like how much of the knowledge base is 
reflected in prevailing materials to give the field more 
guidance about what's there from which to choose.
    Mr. Porter. Dr. McGuire, do you have a GPRA standard for 
outcomes for kids, or is it just teachers or is it neither? Are 
the standards down to the actual learning?
    Dr. McGuire. We want to use student achievement where it is 
appropriate across the range of programs that we support. In 
the research area where I would argue student achievement is a 
distant measure, I am much more particularly interested in the 
short run in good measures, that would give me some indication 
of quality.
    Mr. Porter. In my mind, it is kind of research on the 
effects of research.
    Dr. McGuire. Right.
    Mr. Porter. And if the research is being done, but it is 
never translated into anything meaningful, what is the point of 
doing it, right?
    Dr. McGuire. Yes.
    Mr. Porter. No sense in just sticking it on the shelf or no 
sense in just sticking it in the teacher's mind. It has got to 
be translated into the classroom and to the kids. So you really 
do have to do research on research, where it is heading and you 
really ought to have, it seems to me, outcome-oriented 
standards in your own shop that says your research is doing 
some actual good.
    Dr. McGuire. We are about to mount--we haven't put it 
together just yet--a panel to, in effect, review the quality 
and effects of the research that we support.

                       FIE EARMARKS AND OVERSIGHT

    Mr. Porter. I want to ask you a question about earmarks. 
Probably nobody has ever asked a question about earmarks in the 
history of Congress. There is $100 million worth of earmarks 
under FIE or most of them are under FIE; correct?
    Dr. McGuire. Yes.
    Mr. Porter. In most cases, that involves the transfer of 
funds, but what do you do to see that those funds carry out the 
purpose for which they are intended? In other words, is there 
any oversight on that at all?
    Dr. McGuire. Yes. We do try to make sure that even though 
we are obliged to support those activities, that there has been 
some review of what is being proposed. We make sure that the 
agency actually exists, and we, to the best of our capacity, in 
terms of staff, try to monitor these projects.
    Mr. Porter. Carol Cichowski is wondering if I have lost my 
mind to ask such a question.
    Ms. Cichowski. I think it is a good question.
    Mr. Porter. I think it is a question that is necessary and 
I worry a lot about putting out a direction and then nobody 
monitoring whether the funds actually got to what they were 
intended to accomplish. You do a degree of oversight then?
    Dr. McGuire. Yes, sir.
    Mr. Porter. That is important. I have run out of time.
    Mr. Jackson.
    Mr. Jackson. I would be happy to yield the chairman the 
opportunity for another question. I have two, Mr. Chairman.
    Mr. Porter. Go ahead.

            CONTENT OF INTERNET ADVERTISING AND CLASSROOM TV

    Mr. Jackson. Dr. McGuire, I am wondering what efforts are 
being taken to prevent commercial concerns from targeting 
classroom students with inappropriate advertising via the 
Internet or via other classroom television content including 
Channel 1.
    Dr. McGuire. I wouldn't argue that I am doing very much 
about that. We are trying to make much more strategic use of 
the Internet as a dissemination vehicle. We have one or two 
projects, for example Ready-to-Learn TV, but we are not 
substantially involved, I think, in that issue, Mr. Jackson.
    Mr. Jackson. I know, for example, that the military uses a 
considerable amount of money to support commercial 
advertisement on Channel 1, and so I would imagine that your 
department would be responsible for screening the types of 
content that students in the classrooms would have access to 
via Channel 1, and certainly via potentially inappropriate 
Internet advertising. Does that fall under your jurisdiction, 
Dr. McGuire?
    Dr. McGuire. Again, it is not an issue that I think OERI 
specifically has any purview over, nor have we taken it on as 
an evaluation or a research question to my knowledge. It is 
certainly a legitimate issue.

          PARENTAL INVOLVEMENT AND LOCAL SCHOOL ACCOUNTABILITY

    Mr. Jackson. Dr. McGuire, I support the Administration's 
budget request for parent information resource centers. I 
wonder what research OERI is pursuing to increase direct 
parental involvement in educating their children and also in 
ensuring local school accountability on vital issues including 
high stakes test, teacher quality, and let's say public school 
choice.
    Dr. McGuire. On the matter of high stakes tests and 
assessment, we have been supportive of the Board on Testing and 
Assessments work over at the National Academy of Sciences to 
look deeply into that issue hoping to provide the policy 
community with advice about how to do that right. We also have 
a research center out at UCLA that is, among other things, 
interested in the integrity of these tests, the design of 
assessment generally, and particularly how to develop them in 
ways that make all the necessary accommodations for different 
student populations.
    On the parent involvement matter, we have a center at Johns 
Hopkins University and Howard University that has a long and 
productive history of studying any number of dimensions of the 
parent involvement issue, all the way from how they are 
involved in questions of governance and leadership at the 
school site with implications for how parents have been 
involved in programs like Title I, to more recent issues 
related to how to help parents be much more thoughtful 
advocates for the education of their own children, introducing 
them to the ideas about standards and content and what is going 
on in the different disciplines.
    Mr. Jackson. Thank you, sir.
    Thank you, Mr. Chairman.
    Mr. Porter. Thank you, Mr. Jackson.
    Mrs. Northup.

                   COMPREHENSIVE SCHOOL REFORM PLANS

    Mrs. Northup. Mr. Jackson talked about commercial activity 
that target classrooms. There is a different kind of commercial 
activity that targets classrooms, and that is the different 
consultants that want to sell a comprehensive school reform 
plan to schools for a certain amount of money that we fund here 
in Congress. Last year the American Association of School 
Administrators paid for their own study of those models that 
were put into the plan and they decidedthat essentially only 
two of them showed real change in schools that benefited students in 
terms of what they learned.
    Success for All and Direct Instruction. I wonder what OERI 
does to, if you have come to the same conclusion, looked at 
that study, and what sort of information you pass on to schools 
that are considering what model they might adopt using our 
Federal grant money and how many of them have actually 
purchased one of these, and I guess it begs the question if you 
have somebody that comes to your school and convinces you that 
they have a research-based model but the research we have 
doesn't show that it is successful, how many of them end up 
choosing one of those, and in a sense, wasting their money?
    Dr. McGuire. I would encourage you to next month be sure to 
raise that same question with my colleague, Mike Cohen, who 
runs the Office of Elementary and Secondary Education, inasmuch 
as that is where the program in comprehensive school reform is 
run, and that is the office that seeks to provide guidance and 
advice directly to the field.
    Mrs. Northup. But do they depend on your research and 
information?
    Dr. McGuire. Let me tell you what we are doing. I am very 
interested in this question of evidence behind these models, 
and so we are really happy about the fact that we are in a 
position now to mount a serious research effort to go find them 
and to understand a whole lot more than I think we do today 
about how these models work and the conditions under which they 
give rise to the student achievement effects that we all 
desire. At the same time, there are a couple of other things 
that we are doing in this area. Let me just say, first of all, 
that one of the things that I have been most pleased about in 
how we have gotten into this work, and it does represent a 
departure from our current authority in a way, is that we 
designed our approach to this problem by trying to put the 
research and improvement work together upfront. So we are 
supporting a clearinghouse that at least we will round up the 
available information and help schools have more efficient 
access to it. We have been asked to try to support building the 
capacity of some of these existing development organizations 
that are out there.
    Mrs. Northup. Let me just say, because my time will run 
out, let me just say that there is a lot of money in this and 
the people that sold this idea had also the opportunity to 
benefit. I don't know that it is our responsibility to now 
teach them why their program isn't necessarily as hot as they 
said it was and how to change it as much as it is to give very 
clear and concise information to the schools that are out there 
still making their choices, or that are maybe finding that 
success.
    I mean, what I am afraid of is that in not wanting to lose 
the sales, so to speak, we are going to end up developing their 
program for them and they are still going to make the $50,000 
they make from consulting fees with these schools. That doesn't 
make any sense at all to me.--you know, To me, that is like the 
snake oil salesman that comes in and sells you snake oil. Now 
you find out that it doesn't cure you, so you try to put 
different ingredients in the snake oil. Let's just get to the 
real medicine here and ask you to be very concise and 
aggressive about identifying the programs that work and getting 
that information to the schools. I do think there are more 
schools in all of our districts than ever before that are eager 
for that information and that guidance, and I would ask you to 
be very aggressive about it.
    Dr. McGuire. Point well taken.
    Mrs. Northup. Am I done?
    Mr. Porter. You have got several minutes left.

              INTERAGENCY EDUCATIONAL RESEARCH INITIATIVE

    Mrs. Northup. Let me ask you about the interagency effort 
that you all are making and do you see--it is the National 
Science Foundation, NICHD and you all, right?
    Dr. McGuire. Yes.
    Mrs. Northup. Do you see your agency is going to be the 
responsibility agency to convert what the other two sort of put 
together and get to the classroom, and in light of the fact 
that NICHD is about to release what its national reading panel 
has been working on for two years, something that this 
committee funded and initiated, do you expect to be highly 
involved in getting that information, putting it in usable 
form, and getting it to the classroom?
    Dr. McGuire. I absolutely think that the success for things 
like the IERI depends on a strong and smart leadership role at 
OERI. We are in the best position, it seems to me, to make 
these connections to the field. I am really pretty happy about 
the nature of our involvement in that partnership. It has been 
good for us to be in it, and I think we have brought a lot to 
it. With respect to the Reading Report, again, I met with Duane 
Alexander several weeks ago to be briefed on the report itself 
and the plans for its release. We checked in with them as 
recently as yesterday to see how that was coming along. We look 
forward to seeing the final product and to visiting with them 
about all the right ways of collaborating in its dissemination. 
The thing I know that Duane and I both want is for the report 
itself to be well received.
    Mrs. Northup. And to make a difference. Mr. Chairman, can I 
just ask the indulgence of the committee to follow up one more 
time?
    Mr. Porter. Sure.
    Mrs. Northup. It seems to me that if academic freedom and 
personalities and so forth infiltrates any area is education. 
It is almost like people's different philosophies about how to 
raise a child, and they feel so passionately and so strongly 
because they love children for all the right reasons, but not 
necessarily coming to the right conclusions and so-so many 
studies. My complaint about OERI 3 years ago when I arrived is 
they did studies on a successful school, and maybe said this is 
how all schools should be when those schools were successful 
because of a particular principal, because of a particular 
situation they were in. They weren't replicable, they weren't 
based on sound science and so forth.
    In my experience with the Department of Education, first of 
all, universities don't buy into changing their curriculum 
because it is filled with people that have their own 
philosophies and the Department of Education seemed to have 
that same sort of weakness. I do believe they have bought into 
the national reading panel. I think you are already seeing some 
changes that reflect that, but I just wondered if you worried 
about the level of resistance from the education community 
itself to change? I have no idea what the reading panel's 
conclusions are going to be, but if you see aresistance to 
adjusting and changing because people are so set in their ways.
    Dr. McGuire. Very quickly, I do worry. Change is hard. I 
worry about what the headlines might be from that report, and I 
think that both Reid Lyons and I have a responsibility to be as 
sophisticated and smart about how we characterize and present 
the results of that work, so that the odds go way up that we 
can take constructive advantage of it. For instance, I think it 
matters that we put the research that is being looked at in 
that effort in a proper light and not be critical of others at 
the same time that we speak about what this evidence tells us.
    You are absolutely right, we tend to get into very big 
arguments about small differences here and we need to find a 
way to rise above it.
    Mrs. Northup. Thank you, Mr. Chairman.

                       D.C. SCHOOL REFORM PROJECT

    Mr. Porter. Thank you, Ms. Northup. Picking up on a 
question Ms. Northup asked, one of the projects that have been 
funded for the past 3 years from the FIE is an initiative to 
support system-wide, school-based academic and management 
reforms in the District of Columbia in their public school 
system. Your budget proposes an additional $10 million for the 
program again in FY 2001. Can you tell us the progress, and 
particularly in terms of student achievements and why would you 
need an additional $10 million for this next year? What will 
that be used for?
    Dr. McGuire. The district is doing five or six things with 
the money that they currently have from us. One of the most 
important things in their opinion that they are up to is the 
creation of a new teacher professional development center. They 
are working in that center on training teachers in SAT 
preparation for kids, in how to access the Internet and make 
more effective use of technology instruction. One of the big 
ticket items and things about which they feel most 
enthusiastic, Mr. Chairman, is this idea of a Saturday academy. 
In effect, you could think of it as a strategy to purchase 
additional learning time and to some degree it makes a lot of 
sense when you think about the number of kids in the District 
who might be more than a grade level or two behind.
    If you don't find ways to buy more time to help them catch 
up, they might never catch up, so it is rather remarkable that 
in virtually every one of their approximately 150 schools, that 
they have figured out some way to buy a lot more time and that 
kids are participating is some indication of their desire to 
learn. They do have as well some career awareness activities 
going on, particularly at the middle school level. They are 
working with models like Success for All and they are trying to 
do things that will improve the schools' judgments about which 
of those models really make sense to work with.
    They are spending some money training parents through local 
school restructuring teams. When I asked them specifically 
about student outcomes, what they tell me, Mr. Porter, is this: 
that no, we are not nearly as happy as we want to be about 
moving youngsters from a level of proficiency to advanced; but 
they are very happy, very pleased about the number of children 
that they have moved from basic to proficient. They think that 
is where they need to really focus their attention and where we 
to continue to support them. They are adamant about continuing 
to invest in the extra learning time and in teacher 
professional development, so that teachers use that time well.
    Mr. Porter. Would you provide for the record the data to 
back up the student achievement part of your answer?
    Dr. McGuire. I sure would.
    [The information follows:]



                     GIFTED AND TALENTED EDUCATION

    Mr. Porter. I would like to see that. One of my colleagues 
has expressed concern that the Department's budget request 
eliminates funding for gifted and talented Native American 
students and requests flat funding for the Jacob Javits Gifted 
and Talented Students Education Act. How does the Department 
propose to assist the Nation's gifted and talented students? I 
understand that a proposal is being considered by the 
authorizing committee which would change the Jacob Javits 
Gifted and Talented Program from a competitive grant process to 
a formula grant that would be distributed to all 50 States.
    What is your opinion of the proposal to convert the program 
to a formula grant, and do you believe all 50 States have 
adequate systems in place to operate a high quality program for 
gifted and talented students?
    Dr. McGuire. I am certainly aware of a proposal that would 
move to formula grants at the State level, though I don't 
believe it is something that the Department has proposed. And I 
am not as knowledgeable as I would want to be about what the 
prevailing State capacity is to carry something like that out. 
I would expect that it is uneven, varies from State to State. 
With respect to the Javits program, we have actually proposed 
to increase it by about a million dollars or so. Some of that 
money would go to support some new demonstration programs. Some 
of that money would go to support the R&D center that we 
currently have in that area. In fact, we would increase support 
for that I think somewhat. We remain committed to that work.
    Mr. Porter. What about the Native American students? Why 
are you eliminating the funding for gifted and talented Native 
American students?
    Dr. McGuire. I don't think that is my program. I should 
point out that we are involved with a couple other agencies 
right now in another interagency effort to get clear about the 
research base there and to plan for important new work.
    Mr. Porter. I would ask my staff where would that program 
be if it isn't there?
    Mr. Skelly. The native Hawaiian program, Mr. Porter, is in 
the elementary and secondary area.
    Mr. Porter. The Native American program?
    Mr. Skelly. Right. And we do level fund it at $23 million.
    Mr. Porter. For the gifted?
    Mr. Skelly. Native Hawaiian.
    Mr. Porter. I am talking about the gifted program for 
Native Americans.
    Mr. Skelly. We have programs for Native Americans but we 
don't have one for gifted and talented.
    Mr. Porter. Is there a set aside somewhere?
    Mr. Skelly. Not that I remember.
    Mr. Porter. Why don't you answer that for the record.
    [The information follows:]

        Funding for Gifted and Talented Native American Students

    In the Administration's reauthorization proposal for the 
Elementary and Secondary Education Act (ESEA), authorization 
for a separate Gifted and Talented program in Indian Education 
(currently in ESEA, Title IX, Part A) was not included. The 
Department has never received funding for the program. Under 
the Administration's proposal, this would be an allowable 
activity under Indian Education Grants to Local Educational 
Agencies.

            COLLEGE TEST PREPARATION FOR LOW-INCOME STUDENTS

    Let me ask a couple more questions. You are requesting $10 
million for a new initiative called college test preparation 
for low income students. How would this work? How would the 
funds be distributed, to whom and what performance measures do 
you have to evaluate the program? And is this authorized, I 
guess I would also ask?
    Dr. McGuire. This would be a competitive program to local 
education agencies which would therefore propose exactly how 
they would go about doing it. It strikes me as a fairly 
straightforward program to develop performance measures around. 
At one level it would be pretty straightforward to identify the 
number of kids who were able to take advantage of it and I 
would expect that would be something that we would look for and 
it might be possible with careful evaluation to see what 
happens to the kids who take advantage of those services in 
terms of their access to college. We certainly know for kids 
who can't afford those services now that those programs seem to 
make a difference.
    Mr. Porter. Is this authorized? Would you need authorizing 
language?
    Ms. Cichowski. We are requesting it under the Fund for the 
Improvement of Education, whose authority has expired, along 
with the rest of the Elementary and Secondary Education Act. If 
this program is extended as we hope it would be, it would be 
authorized.

                            AMERICA'S TESTS

    Mr. Porter. Your budget requests funding for a new line 
item this year called America's Tests. This is essentially your 
effort to authorize the voluntary national tests that Congress 
prohibited your undertaking without specific legislative 
authority. Last year you requested $16 million for continued 
development, pilot testing, and implementation of the test. 
This year you are requesting only $5 million. Why the change? 
How much money do you estimate NAGB will expend in fiscal year 
2000 for test development activities?
    Dr. McGuire. Well, the first thing I should say for the 
record is that the request for funding goes along with a 
corresponding request that a test be authorized as part of the 
Elementary and Secondary Education Act reauthorization. We 
wouldn't propose spending this money for something that wasn't 
authorized. I just want to be clear about that. We, in 
conversation with NAGB, indicate that they will spend less 
probably than originally intended on the sort of the 
development work that is underway, Mr. Chairman. I don't have 
the number right on the tip of my tongue, but probably 
substantially less than we had originally anticipated.
    Mr. Porter. You have answered all our questions. We thank 
you for the fine job you are doing and I would be interested if 
there was any good outcome from your discussions with Dr. 
Eisenberg--he is sort of your counterpart over in HHS, and it 
might prove to be interesting or even useful.
    Dr. McGuire. I will be sure to track him down and probably 
be in touch with him.
    Dr. Porter. For him too. I am saying mutually it might be 
very helpful. Thank you, Dr. McGuire.
    Dr. McGuire. Thank you very much.
    Mr. Porter. The subcommittee stands in recess until 2:00 
p.m.
    [Recess.]
    [The following questions were submitted to be answered for 
the record:]



                                         Wednesday, March 15, 2000.

 OFFICE OF POSTSECONDARY EDUCATION AND THE OFFICE OF STUDENT FINANCIAL 
                               ASSISTANCE

                               WITNESSES

A. LEE FRITSCHLER, ASSISTANT SECRETARY FOR POST SECONDARY EDUCATION
GREG WOODS, CHIEF OPERATING OFFICER
MAUREEN McLAUGHLIN, DEPUTY ASSISTANT SECRETARY FOR POLICY PLANNING AND 
    INNOVATION
CLAUDIO PRIETO, DEPUTY ASSISTANT SECRETARY FOR HIGHER EDUCATION.
TOM SKELLY, DIRECTOR OF BUDGET SERVICE
    Mr. Porter. The subcommittee will come to order. We 
continue our hearings on the budget for the Department of 
Education with the departmental post secondary education 
program and higher education programs. And we are pleased to 
welcome Dr. Lee Fritschler, the assistant secretary for post 
secondary education. Welcome. It is your first appearance 
before our subcommittee. We are delighted to have you and Greg 
Woods, the chief operating officer, and it is not your first 
appearance before the subcommittee, but we are still delighted 
to have you.
    Mr. Woods. Nice to see you, sir.
    Mr. Porter. Why don't you both proceed with your statements 
and then we will go to questions afterwards.

                       Introduction of Witnesses

    Mr. Fritschler. Thank you very much, Mr. Chairman. I am 
pleased to be here especially because this is my first 
appearance. I have with me Maureen McLaughlin who is the Deputy 
Assistant Secretary for Policy Planning and Innovation, Claudio 
Prieto who is the Deputy Assistant Secretary for Higher 
Education. And of course we have Tom Skelly with us who is our 
Budget Director for the Department.

                  Opening Statement by Mr. Fritschler

    We all understand the importance of post secondary or 
higher education in today's information-based economy and high-
tech global environment. We look at this challenge or these 
challenges or the role for higher education in three ways. We 
find it to be essential for individual success and for society. 
It is essential to our national well-being; and we also think 
education is our best chance in this country of reducing the 
gaps between the haves and the have nots.
    Our fiscal year 2001 budget takes important steps to help 
make college affordable for all Americans and to help 
disadvantaged populations. We remain very firmly committed to 
expanding access to quality post secondary education. I believe 
you will find this budget to be interesting and innovative. We 
are excited about it. We think it provides us with the 
resources we need to do very interesting, worthwhile, and 
essential things for this country. We are committed to dealing 
with and promoting distance education and technology in 
education. We are committed to expanding innovation and quality 
and we are pleased with the opportunities this budget presents 
us for those things. You have my written statement and frankly 
I would prefer to answer questions rather than say any more at 
this moment. So we can proceed on that basis if it is all right 
with you, Mr. Chairman.
    [The statement of Mr. Fritschler follows:]



    Mr. Porter. Mr. Woods.

                     Opening Statement By Mr. Woods

    Mr. Woods. Thank you. Mr. Chairman, thank you very much. 
With your permission, I will make a brief statement and submit 
my complete statement for the record. I am pleased to say I am 
more enthusiastic about this job than I was when I was here 
last time, and the mission we have, I think, is absolutely 
wonderful. We literally helped put America through school. This 
coming year we expect to help about 8.6 million students with 
$54 billion in grants and loans and guaranteed bank loans. And 
SFA is the government's first Performance-Based Organization, 
and we have chosen three performance goals which I would like 
to spell out briefly. The first is to improve the customer 
satisfaction that our organization delivers to make it equal to 
the private sector's financial services industry. That would be 
a score of about 73 as measured by the University of Michigan's 
American Customer Satisfaction Index.
    Second would be to raise employee satisfaction, which goes 
hand in hand with good customer service to among the top five 
in government and the last of our overall objectives is to 
reduce our unit cost by 19 percent. We must reduce that unit 
cost. That is the amount we spend to deliver a loan and grant 
to a recipient; unless we reduce this cost the workload 
increase that we face is going to drive our total costs higher 
and higher. The workload is steadily growing. We have more FFEL 
loans, more direct loans, more grants, more applications, and 
at the same time the workload is growing in complexity. As 
direct loans, for example, go from in-school to in repayment 
status, they become twice as expensive for us to service. So we 
need to cut unit costs by 19 percent if we are going to stay, 
inside our budget.
    The primary tool for doing that is to bring an e-commerce 
strategy to student financial assistance. That strategy cuts 
our costs by making our business processes faster, taking 
errors out, and removing labor from the whole equation.
    At the same time, we greatly improve the quality of the 
services we deliver. In fact, we now build partners and 
customers into our design teams building new products. We have 
already begun the e-commerce work. For example, this year 30 
percent more students than ever before will file with us 
electronically using our on-line application form as a primary 
vehicle. We have made the electronic version easier and faster 
for them to fill out, and it is 60 percent cheaper for us to 
process. And it is practically error free. Applicants can also 
use a PIN number to file with us. They can use the same PIN 
number to go back and make changes on-line later in the 
process. These are just a couple of the new products among 14 
or so that we have introduced during this past year for this 
upcoming academic year.
    We support all this information technology with the same 
technology that big banks like the Bank of America are using to 
integrate the information that is among those stove piped 
legacy systems. Perhaps you remember last year when I laid out 
the hairball picture. That is what we are operating on. We have 
successfully demonstrated that middleware software can link the 
bits and pieces of data in our big systems and deliver the 
whole business seamlessly over the Web to a customer. By the 
end of the year, we will have a portal in place for schools 
that they can configure to use that data and that information 
to fit their canvass. Next year we will have the same kind of 
portals for students and our financial partners. Behind the 
scenes that technology lets us integrate systems and retire 
some of those legacy systems. We expect to retire two of those 
systems this year and more next year.
    Some of our e-commerce work is actually internal, like 
building a new financial support system, a new financial 
management system in our organization. We are deploying the 
first modules of that next year. We will have it complete by 
2001, and that whole thing will position us so that we can have 
clean audited financials, a clean bill of health on our 
financial system.
    Even as we move ahead, from time to time we stumble. We, 
for example, worded a question on this year's FAFSA in 
connection with the new drug legislation in a way that confused 
applicants, and 13 percent of them left it blank. We detected 
the problem in the first couple of weeks and revised our 
approach so that no student lost aid to which they are 
entitled, and at the same time we continue to identify and deny 
aid to those that are ineligible. This confusing question is a 
symptom of the old way of doing business from which we are 
still trying to break free. Our quick action to omit the 
problem and fix it in a manner that protects customers and 
taxpayers I think is a signal of the new kind of culture that 
we are trying to build in SFA.

                Fiscal Year 2001 Budget Request for SFA

    Our total request for FY 2001 is $811.8 million. As I 
mentioned earlier, workloads are going up, but we are pushing 
back, so this budget increase is only a 4 percent increase over 
last year's, a factor that about equals the cost of living 
increase that has been in effect governmentwide.
    Our ability to hold the costs in check depends on our IT 
investments. This year in the projected budget, we expect to 
spend another $58.7 million on new information technology 
products. That is about--that is less than 10 percent of our 
total funding but we need that continued investment in order to 
continue to cut costs and improve service. The kind of service 
that we are trying to deliver here is the service that would 
equal the best in business.
    Thank you for the time. I would gladly answer any questions 
that you might have.
    [The statement of Mr. Woods follows:]



    Mr. Porter. Thank you, Mr. Woods. Mr. Woods, Congress, in 
enacting the higher education amendments of 1998, created a 
performance-based organization in direct response to complaints 
about the numerous problems with the computer systems that are 
responsible for the smooth running of the student financial aid 
system. Since the creation of the PBO, we have seen very few 
improvements in the student aid processing system although you 
have described what you want to accomplish. This year alone, 
3,500,000 printed Free Application for Federal Student Aid 
(FAFSAs), contained errors. The Department incorrectly 
programmed a change to the expected family contribution 
formula, and an awkwardly worded question related to drug 
convictions resulted in at least 36 percent of the applicants 
leaving the question blank which is what you just referred to. 
The PBO was created in order to eliminate these exact type of 
mistakes yet they continue to occur.
    How do you explain that these mistakes occurred and is 
simply buying more technical equipment going to prevent this 
happening in the future?
    Mr. Woods. Certainly it will help.
    Mr. Porter. How did it happen?
    Mr. Woods. The errors that you talk about are absolutely 
unacceptable to us. I can detail each and every one of them. I 
ask that you review all these things against the backdrop of 
the substantial progress that the PBO has made in the last 15 
months. The services we are delivering are faster, they are 
less costly and easier to use. You can see we are faster in the 
FAFSA processing. The basic FAFSA process two years ago took 
about ten days to turn around an application.
    We are now turning them around in under six days. Our loan 
consolidation process is staying within the targets that we 
have set there. We are answering the telephones in 14 seconds 
where the calls used to come in in a matter of minutes. That is 
not in next year's budget. That is a thing that we are already 
doing. You can see how much money we have saved. We have put a 
cap on our operating systems. In our basic budget going 
forward, we show no increases for any of the operating systems 
with the exception of the direct loan program, and we have even 
slowed the cost growth there to below what would have been 
expected.
    And we have a tremendous increase in the number of people 
filing with us electronically. We expect this year we might see 
as many as 4 million electronic filers.
    The services are easy to use, much easier to use. I have a 
dozen new products out there already, not the ones I would fund 
out of the coming year, but products that we have already 
introduced, like the ability to make changes to the FAFSA 
online and the ability for schools to go into theNSLDS database 
and get data they need to do their jobs. We own the mistakes that you 
talk about. There is no doubt that we had problems like the need to 
reprint FAFSAs, and other problems that you have mentioned, but we 
think we are keeping those problems small. Students are getting the aid 
they are supposed to get, and we are starting to building some trust, I 
believe, with the school community. Sometimes they applaud our 
response, particularly in crisis, and I know they know we are listening 
to them. We are not pitching any shutouts yet, but I think we are 
winning the game.
    Mr. Porter. Would you say it would be fair if a year from 
now these same kinds of problems kept showing up, we got very 
critical with you? In other words, do you feel very confident 
that you will be able to clear a lot of this up? Sounds like 
you are.
    Mr. Woods. I am very confident we will clear up more and 
more of these problems. With an operation of this size, there 
will always be issues. I think we will get a much better 
ability to deal with these issues and to eliminate them. I 
talked about a culture change. You can't just write rules for 
the organization to do this. You have to train the Staff. One 
of the things I didn't mention is the creation of something we 
call SFA University, and that is all about culture change. We 
have training in bringing the PBO to the front lines, in how 
people apply the new approach to their jobs.
    We have training in the traditions of this job so people 
can feel the pride they ought to feel in what they are doing, 
and front-to-back training in what this aid process is, those 
things are all going to continue over the course of this year, 
so there are 1,200 people all working in the same direction.
    I can't promise you we will eliminate all errors, but I 
expect we will have a substantial reduction as well as better 
and better services and cost savings that I can specifically 
point out. And on top of that, I will have these independent 
measures. In the performance-based equation in the last 
analysis, we ought to be judged on the basis of whether we are 
satisfying customers. We will survey the people who are the 
customers of our FAFSA process, the students. We will survey 
the schools who are the customers of our origination and 
disbursement process. We will survey the guarantors who are the 
customers of our financial transaction systems and they will 
give us a score. By the time we sit here next year, I will have 
those scores to report and the opinions on whether we are 
improving or not and then we will have a better base for 
judging how this thing is going overall.
    Mr. Porter. Thank you, Mr. Woods. The subcommittee will 
stand in recess for this vote and then we will return.
    [Recess.]

                          Rising College Cost

    Mr. Porter. The subcommittee will come to order. Dr. 
Fritschler, you were president of Dickenson College?
    Mr. Fritschler. Yes, sir.
    Mr. Porter. Let me ask my pet peeve question. We try to put 
more money into student financial assistance, particularly in 
programs for young people that don't have the money to attend 
school, Pell grants and TRIO program, for example. And we find 
very often we aren't buying much access, and sometimes not any 
access for people who are outside the program. In other words, 
we can't expand the program because colleges and universities 
always seem to raise their tuitions and costs to absorb all 
those additional monies. How do we get around this problem, and 
how do we actually get more access instead of just transferring 
money from the Federal Treasury into the Treasury of various 
colleges and universities? And I realize they have costs that 
have to be met, but it seems whatever we do, they absorb.

  Making Efficient use of Federal Grants to Colleges and Universities

    Mr. Fritschler. I appreciate that question. I think there 
are three or four answers to it and I will be brief with each 
one. One is we are trying in the Department to encourage 
colleges and universities to be more efficient in the way they 
operate. We do have grants through FIPSE, actually my former 
place of employment had one and they have combined with four 
schools in the region, four private schools to set up a joint 
administrative structure to handle many of the administrative 
functions that occur or need to occur on those campuses. We are 
going to continue to push that model for other institutions.
    I think basically what happens when more money becomes 
available for higher ed is that the temptation on the part of 
higher education institution managers and faculty is add 
programs, increase the quality of programs, build a new science 
building or build a new library to do all the sorts of things 
that you and I could agree are important. But the problem that 
we face, I think, from the purveyors of financial assistance or 
aid to the system is how do you say enough is enough. How can 
you say you don't need that new library, keep your costs down, 
or you don't need that new science lab, use the old one. The 
best way I know for that kind of a ceiling to be placed is 
through the marketplace. I used to describe myself as being the 
CEO of one of the most competitive companies in a very 
competitive industry, because in higher education, we really do 
compete for everything; a few years ago we competed very hard 
for students.
    Now that is changing a bit. We competed for government 
grants. We competed for foundation grants. We were just very, 
very competitive and whenever we could improve the quality, we 
thought we would be improving our competition. Now I think the 
tide is turning a little bit on this. State institutions are 
improving. They are offering more competition to private 
institutions, I don't know if you saw this morning's Washington 
Post, but there was an article on the front page which, in a 
way, will answer this question big time over the next several 
years. Mr. Saylor, a wealthy dot com entrepreneur over here in 
Virginia, is offering $100 million of his own wealth to set up 
a university which he claims will rival the quality of the Ivy 
League institutions; and the tuition and fees are zero for that 
institution.

  LOWER TUITION COSTS DUE TO IMPROVED TECHNOLOGY AND DISTANCE LEARNING

    Now, I would see this as being perhaps several years in 
coming, but the point is, I think, the technological revolution 
and distance learning will offer the kinds of alternatives 
which we don't have. These changes will be less expensive and 
will force other institutions to look more carefully at what 
they are adding to a program, to use my library example. And I 
think in a few years it is going to be clear that the kind of 
library that campuses need is not going to be a high cost 
building or high cost facility. It is going to be something 
quite different. So I see prices leveling out overall and 
perhaps coming down as we become more accustomed to using 
technology and especially Internet or distance learning more 
successfully.
    Mr. Porter. It is kind of fascinating how quickly the world 
is changing with the technologies that are coming on-line.

                     GEAR UP AND TRIO COORDINATION

    We are generally, on both sides of the aisle on this 
subcommittee, big fans of the TRIO program. How is the GEAR UP 
program complementing the Talent Search program in TRIO? Are 
the same schools eligible for and applying for both programs? 
If so, how are they being coordinated? And what is the 
estimated percentage of students eligible for the GEAR UP 
program who will be served at the President's request level?
    Mr. Fritschler. Let me answer the general question, and I 
will see if someone else at the table has the specific data you 
request. The GEAR UP program is designed quite differently from 
the TRIO program you mentioned. GEAR UP is designed to affect a 
whole school, starting in the 7th grade, to give a grant to a 
State or a partnership or to an institution itself, to change 
the culture of the institution, to work with students; the 
whole 7th grade, for example, and the 8th and 9th grades. It 
prepares them for entry into college or university and changes 
the culture of that institution to the greatest extent 
possible.
    It is only a year old now, but I have been out looking at 
some of these institutions, some of the middle schools and high 
schools where this is occurring, and it is very, very 
impressive. The results are remarkable. The TRIO program, of 
which I also happen to be a big fan, is more targeted on 
specific individuals and it deals with students through the 
summer in some cases, which is extraordinarily useful and 
brings them along. So the programs are similar but I think 
complementary. Claudio Prieto, do you have the data on the 
overlap between the two programs?
    Mr. Prieto. No, sir we don't have that data yet.
    Mr. Fritschler. We will make sure we provide it as soon as 
it comes in. I don't think we have it because GEAR UP is so 
new.

                JAVITS FELLOWSHIP AWARD MISNOTIFICATION

    Mr. Porter. Thank you. We understand that a contractor 
erroneously informed individual applicants selected as 
alternates for the Jacob K. Javits Fellowship Award that they 
were named to be recipients of the award.
    Can you describe in detail your plans for handling this 
situation? When will a decision be made with respect to 
providing funds to these students who received the erroneous 
award letters, and when will the Department notify the students 
of this decision and what amount will be necessary to fund the 
erroneously issued awards? Where do you plan to take the money 
from in order to fund the awards? Will the Department's 
contractor reimburse the Department for the actual dollar 
amount of funds needed to fulfill the award letters? Has the 
contract been terminated? Have all other existing contracts 
between the Department and this entity been terminated or will 
they be? Can you give us some insight on this?
    Mr. Fritschler. The Javits situation is embarrassing. We 
are suffering from a mistake. We worked with the contractor to 
award 138 fellowships this year, and through a clerical error 
on their part, they sent acceptance letters to not only to the 
138, but also to 39 who were on the waiting list or the 
alternates list. I suppose one should say it is an 
understandable clerical error, but it is a bad one, that has 
had some consequences. The contractor actually immediately 
recognized the mistake and contacted the 39 alternates by phone 
and later by letter and told them that they had either received 
a letter or would be receiving a letter which was mistaken. 
That is, they had been notified that they had been made the 
award when, in fact, they hadn't. In some instances, about half 
the instances, that phone call reached the awardee before the 
original letter did. So this all happened very, very quickly, 
and we moved as quickly as we could to correct the situation.
    Now, we stepped back and took a look at this and we thought 
we were really morally, ethically and legally obligated to fund 
these 39 people. Let me say, Congressman Porter, that these 
people who apply for the Javits program are absolutely first 
rate. The winners are really very special people and the 
alternates are as fully qualified to be winners, so there is no 
A and B list. There is just one A list with the winners and 
some alternates who could take over should any of the group of 
people originally selected not be able to accept the award.

                      JAVITS CONTRACTOR LIABILITY

    Mr. Porter. Dr. Fritschler, I don't understand why the 
contractor isn't liable.
    Mr. Fritschler. Well, you asked where funds might come 
from. That is certainly one area we are looking at very hard 
and we will have an answer for you on that soon.
    Mr. Porter. We provided a $10 million set aside for the 
purpose of putting the Javits awards on a forward funded 
schedule last year. If you were to tap into those funds that 
would not allow us to put that schedule in place. We would look 
very negatively on using any of that $10 million or funds from 
the Javits fellowships for the next school year to pay for this 
error, and actually we don't see that it is the government's 
error at all. It is the contractor's error. I don't mean to 
second-guess your decision to honor letters that were sent out 
in error, but if you are going to do that, it seems to me the 
contractor is the one that has to pay for it.
    Mr. Fritschler. Sir, there is a provision in the law, a 
sentence in the legislation which says we must fund these 
people. It is, I think, very, very clear.

                         FUNDING JAVITS FELLOWS

    Mr. Porter. Where do you propose to get the money?
    Mr. Fritschler. I agree with you we should have funded them 
whether or not that clause was in the law. We, I think, owed it 
to them after having informed them of the fact that they----
    Mr. Porter. It's a mistake in fact. I don't know why people 
have a right to take advantage of a mistake.
    Mr. Fritschler. It is interesting. That was our first 
reaction, frankly, and then we studied the law more closely and 
came to another conclusion.
    Mr. Porter. It is a terrible grievous mistake, and I 
wouldn't want to be on the other end of it obviously.
    Mr. Fritschler. And one could hypothesize that if the 
contractor had made a mistake and awarded all 922 applicants an 
award, we certainly wouldn't have funded them. We had 39 and we 
will find a way to handle it.
    Mr. Porter. Let us know, please, before you handle it how 
you are going to handle it. I would like to know that.
    Mr. Fritschler. Sure.
    Mr. Porter. Mr. Dickey.

                          TRIO VERSUS GEAR UP

    Mr. Dickey. Dr. Fritschler, I am going to ask you 
somequestions about TRIO. The Chairman did a good job. I just want to 
go a little bit further. Is there any--what I am concerned about is 
that the attack, as I am going to call it, by GEAR UP to the TRIO 
program appropriations-wise, I don't think is called for. And I am 
going to ask you questions to see if we could somehow get around it. Is 
there any reason why that you know of, even though you are just freshly 
on board, that we couldn't expand TRIO to meet the GEAR UP perspectives 
and goals?
    Mr. Fritschler. In theory, no, but I would say that the two 
are quite different types of programs and they serve the 
clientele differently. We, of course, are a fairly small 
operation over here in OPE and we work closely together, so I 
think in an organizational sense, we do operate with one goal 
in mind; with the TRIO program it is to make sure that 
individuals manage their way through secondary education to get 
into postsecondary education, and with GEAR UP, it is to try to 
change institutions so that we have a larger contingent coming 
up prepared for postsecondary education.
    Mr. Dickey. I don't know how you can help people if you 
don't do it individually. You are saying groups. We are not 
going to have a group going to a different college. We are 
going to have individuals going to their specific colleges, and 
some of that group will decide not to go to college at all. 
That's my point. We are still dealing with individuals no 
matter how we approach this.
    Mr. Fritschler. With GEAR UP, we put counselors into the 
schools and we support partnerships between area universities 
and the schools so that students, university and college 
students, can work with the high school students and we take a 
more broad-based approach.

             SERVICE PROVIDED TO TRIO AND GEAR UP STUDENTS

    Mr. Dickey. Why don't you want to do that for the students 
that are in the TRIO program? Why would you discriminate 
against them from the standpoint of saying, look, we are not 
going to give you as much service as we are giving the GEAR UP 
people. Why is that?
    Mr. Fritschler. I think, actually, the TRIO individuals 
probably receive more service than those in GEAR UP on an 
individual basis.
    Mr. Dickey. Then why not give the GEAR UP students the same 
service, whichever one is better than the other? What I am 
saying, we have an overlap here and we also have some 
deficiencies in one of the two programs. I am just saying we 
are trying to help students go to college; isn't that right?
    Mr. Fritschler. Sure.
    Mr. Dickey. After they get in college, we are trying to get 
them in full employment?
    Mr. Fritschler. Right.
    Mr. Dickey. I go home every weekend and I don't have all 
this Washington stuff in me. Maybe you can tell me how this 
Washington stuff works. But GEAR UP is either not giving enough 
counseling or TRIO is not giving enough counseling. One is 
giving more counseling than the other. Now why not allow it to 
happen to both classifications.
    Mr. Fritschler. Let me ask one of my two colleagues who are 
in charge of these programs to fill in the blanks that I have 
left. Claudio Prieto is the Deputy Assistant Secretary.
    Mr. Dickey. I have talked to you. I want to thank you for 
your help in the past.
    Mr. Prieto. The TRIO programs, which are in my office, are 
programs that were enacted under the spirit of Title IV in 
providing individual empowerment to individual students. The 
legislation is crafted in such a form that the TRIO model, as 
it is called in the field, is followed and each individual 
student is pulled out of the classroom. They are brought 
together with other individual students that require assistance 
that meet the requirements and help the students along, usually 
outside the school's sphere.
    GEAR UP, on the other hand, provides assistance through the 
school by way of attaching itself to internal school activities 
like curriculum, guidance within the school; so although the 
end result expected is the same, the GEAR UP focus is the 
entire class of students following the concept first advanced 
by Eugene Lange back about 15 years ago, whereas the TRIO 
program pulls a student out and provides those services 
generally outside the school. Can both models be made 
compatible? I think so.
    Mr. Dickey. Let's stop for a minute. Which is better? Which 
is the better model for accomplishing the goal of getting 
students to want to go to college, to excel at college and then 
be able to be employable after they complete college? Which of 
the two programs is better?
    Mr. Prieto. I think each in their own----
    Mr. Dickey. No. No.
    Mr. Prieto. Because GEAR UP provides service to an entire 
class of seventh graders. As they go up to eighth, ninth, tenth 
grade, they provide service to the entire school, the entire 
class.
    Mr. Dickey. If we do that to TRIO, will we lose the quality 
of the inspiration and the encouragement? If we just make it 
for everybody and not individualize it, if we did that for 
TRIO, would that be harmful?
    Mr. Prieto. I think the starting point of TRIO, of success 
in TRIO, is a minimal level of motivation by the student who 
starts on that road. The program builds on that motivation and 
prepares the student further, but a student who does not wish 
to go on to college would not seek a TRIO program like Upward 
Bound, for instance. Whereas, students in the seventh and 
eighth grade in GEAR UP schools would receive the same kinds of 
services----
    Mr. Dickey. Whether they want it or not?
    Mr. Prieto. Well, we'll----
    Mr. Dickey. Do you ever ask the students, if you take the 
whole class, do you ever say how many of you want to go to 
college or how many of you don't want to go to college?
    Mr. Prieto. Seventh graders are in that situation all over 
the Nation. They receive the services the schools give them. 
The fact of the matter is that the services that GEAR UP 
provides as preparatory to college are, by and large, the same 
kinds of services that would prepare a student for almost 
everything else. After all, there are not a whole lot of 
different jobs open to a person just after high school.
    Mr. Fritschler. I would add to that the GEAR UP schools 
contain students who come from families, all first generation 
potential college students. The idea in GEAR UP is to start at 
that early time to make these students aware that college is 
important and, more important than that, that it is feasible 
for them and the main criticism I get----
    Mr. Dickey. Do you think there is a distinction in what you 
just got through saying?
    Mr. Fritschler. I think so.
    Mr. Dickey. You are trying to get people into college no 
matter what?
    Mr. Fritschler. Sure.
    Mr. Dickey. What you said, you want it to be more feasible 
or more enticing. Both programs are doing it.
    Mr. Fritschler. The main criticism I hear on the road of 
GEAR UP is it starts too late. It has been successful in the 
seventh grade, but people I talk to want to see it pushed down 
into the fourth grade, because it is so powerful they think.

                      OVERLAP OF TRIO AND GEAR UP

    Mr. Dickey. This is the question I have. Mr. Chairman, I 
appreciate your indulgence on this. Under your plan, under your 
overlapping successive plan, spending money when it is not 
needed is going to mean some people are going to be in GEAR UP 
and TRIO at the same time, right?
    Mr. Fritschler. I think that is possible, although I am not 
sure.
    Mr. Dickey. Has anybody ever thought about it?
    Ms. McLaughlin. The size and magnitude of the problem we 
are trying to address here--getting poor and disadvantaged 
students better prepared to finish high school, to go on to 
college and succeed in college--is much, much greater than the 
combination of the TRIO and GEAR UP programs. We are trying a 
variety of approaches which are complementary, and are all 
geared towards providing the additional assistance--academic, 
financial, and mentoring--needed by low-income students whose 
chances of going on to college, unfortunately, are still less 
than similar students who are from higher income backgrounds. 
So we have one approach, a systemic approach using GEAR UP. It 
goes into high poverty middle schools, starts with a cohort----
    Mr. Dickey. High poverty middle schools.
    Ms. McLaughlin. High poverty middle schools. Middle schools 
that have a high percentage of the students are----
    Mr. Dickey. That is targeting the same group as TRIO is 
targeting.
    Ms. McLaughlin. They are very similar populations. TRIO is 
going for first generation college student families and this 
is----
    Mr. Dickey. How many high poverty students are there going 
to be who are not going to be first generation? What statistics 
do you have to say that is how many there are in America?
    Ms. McLaughlin. We have statistics that show how many high 
poverty middle schools there are and how many students are 
enrolled in those schools. The amount of funding we have in 
GEAR UP only allows us to address a small percentage of the 
potentially eligible institutions and students.

                         PROVEN HISTORY OF TRIO

    Mr. Dickey. My point is this. You all have asked for $125 
million increase for GEAR UP and only $80 million for TRIO.
    Ms. McLaughlin. TRIO is a larger program to start.
    Mr. Dickey. I don't care whether it is or not. What I am 
saying to you is TRIO is proven. It takes high poverty students 
and it encourages them and I have seen it. I know what it is 
like. Those students want to go and be better. They come after 
school. They are there on the weekends and in the summer. And 
then they come back and tell those students when they graduate 
from college and they get a job. GEAR UP is doing the same 
thing. We are aiming at the same deal except somehow we have 
got some kind of pride of authorship that is very expensive to 
our government and very destructive to the TRIO program because 
it limits the number of students that we have and you just got 
through saying that, that we don't reach everybody.
    Ms. McLaughlin. We don't----
    Mr. Dickey. We could reach--excuse me. Let me finish the 
question, if you don't mind, and I will listen. You don't 
believe that, do you.
    Ms. McLaughlin. I do.
    Mr. Dickey. If we put more money in TRIO, we wouldn't have 
what you are saying is unfortunately we are not reaching 
everybody.
    Ms. McLaughlin. We are not, through the combination of the 
two programs, reaching everybody.
    Mr. Dickey. Are we going to have a third program to reach 
the rest of them?
    Ms. McLaughlin. No. We are requesting----
    Mr. Dickey. You see, I wasn't listening.
    Ms. McLaughlin. We are requesting increased funding for the 
TRIO programs. We have increased funding for the TRIO programs 
over the past several years. We are requesting another $80 
million for the TRIO program on top of $645 million. We are 
requesting increased funding for the GEAR UP program. Also we 
see that the level of demand and severity of the need for these 
students is quite great. That is why we are trying to do it 
through a combination of two complementary programs. GEAR UP is 
also based on proven models. When we designed the GEAR UP 
program, we looked at a variety of programs around the country 
in many different cities and in rural areas. We looked at what 
components that were successful in those programs and put them 
together into the GEAR UP program.
    So while GEAR UP is new, it, too, is based on proven models 
that work. We would say we have two programs here that are 
geared towards a very, very important problem we are trying to 
address. They are both designed to work and to help low-income 
students.
    Mr. Dickey. You don't really believe what you are saying, 
do you?
    Ms. McLaughlin. I do believe what I am saying.
    Mr. Porter. Would the gentleman yield?
    Mr. Dickey. Yes.

                      SERVING THE TRIO POPULATION

    Mr. Porter. Let me ask a question. Are we serving all of 
the TRIO eligible people that need to be served?
    Mr. Dickey. That is the point.
    Mr. Porter. Why shouldn't we take any new money that is 
available and serve all of those eligible people before we 
start a new program to encourage more people to be eligible 
that otherwise might not be eligible. In other words, if we are 
not completing one program, why are we starting another one to 
create more population that we won't also be able to serve?
    That is what you are trying to say.
    Mr. Dickey. That is exactly it. It is better stated. Thank 
you, Mr. Chairman.
    Ms. McLaughlin. The reason for having another program like 
GEAR UP is that we were able to look at this as an approach 
that was systemic, that went into a school, and rather than 
picking out individual students, looked at an entire class in a 
high poverty middle school. It is based on statistics and data 
that show that all the students in a high poverty school are at 
risk. They are at risk because the school is typically not well 
funded. It is an approach that improves the academiccourse 
offerings, the teacher preparation, the counseling, and mentoring, all 
the kinds of things we see that you need to ensure the people are going 
to be able to go on to college. It is more of a systemic approach. It 
is also a partnership.
    Mr. Dickey. Some of us don't know if we can even pronounce 
it.
    Mr. Fritschler. If I might, Mr. Chairman, I would say that 
we are reaching more students this way by dealing with whole 
schools or whole classes than we could with the same amount of 
money----
    Mr. Dickey. Then put that in TRIO.
    Can I keep going, Mr. Chairman?
    Mr. Porter. I am sure you can.
    Mr. Dickey. Why not put TRIO in that program. If that is 
what is so wonderful, just take the TRIO students. They need 
the help and we are telling TRIO students, we are saying no, we 
can't serve you. We asked for $15 million last year and it was 
8,717 students or something like that that we were saying no to 
when we didn't get that 15 million in. Are you all willing--I 
am convinced you all have heard--somebody else has told you all 
to come here and say this to us and maybe they will believe it, 
but are we going to say to TRIO students, no, you can't do it 
because we are going to take 125 million which would bring 
15,000 into the TRIO program, but we are not going to let those 
15,000 in because we are going to go and do a systemic 
experiment. Now, is that what is going on?
    Mr. Fritschler. We think they are two separate programs. 
One is designed, as we said, to try to improve the whole 
environment, the school, the curriculum, and the counseling to 
bring along more students. The TRIO is targeted at individual 
students. I don't really see a conflict there. They are two 
separate programs, and both of them taken together don't begin 
to fill the need.
    Mr. Porter. What he is saying, I think, is if you are 
bringing all of these students through the GEAR UP program and 
then you are saying but there isn't enough funds for you 
because we can't even take care of all the TRIO students.
    Mr. Fritschler. No, we bring them along right to college. 
They would skip TRIO.
    Mr. Porter. And they get GEAR UP money instead which is the 
same as TRIO money at that level; correct?
    Mr. Fritschler. The GEAR UP money would go to the school, 
the institution or the partnership.
    Mr. Dickey. That would be spent efficiently, won't it?

               TITLE I COORDINATION WITH TRIO AND GEAR UP

    Mr. Miller. Where does Title I fit into this?
    Mr. Porter. I am losing control of the subcommittee here.
    Mr. Miller.
    Mr. Miller. These are Title I schools too?
    Ms. McLaughlin. They frequently are, yes.
    Mr. Miller. The low poverty schools are Title I schools. 
Would it be possible that one would not be?
    Ms. McLaughlin. I don't think so.
    Mr. Miller. Why don't we just put more money into Title I?
    Mr. Fritschler. There was some debate over where GEAR UP 
should be placed. It is a program that is based in elementary 
and secondary schools, but it is designed to bring people into 
higher education so the decision was made in the end that it 
made more sense in the higher education division of the 
Department.
    Ms. McLaughlin. There is a requirement in the GEAR UP 
legislation that you show how you are going to use, combine, 
and leverage the funds from other programs such as Title I.
    Mr. Miller. Title I doesn't work, so you don't really trust 
Title I? There is too much flexibility. Title I is very 
flexible, right?
    Ms. McLaughlin. It is flexible, but it can't do all the 
kinds of things we are talking about doing here in the same 
way.
    Mr. Miller. Explain to me why Title I wouldn't do it? You 
can't tell them what to do in Title I?
    Mr. Fritschler. We have a lot of trouble telling anybody 
what to do. We are working through States and through 
partnerships of schools, with local institutions, churches, and 
other sorts of organizations in GEAR UP. So it doesn't go 
directly into the schools. I mean, it goes through some kind of 
partnership or through the States into the schools. It is an 
attempt to try to improve low income schools, not the only 
attempt the Federal Government makes, but one attempt and this 
one is geared towards trying to bring more people up to speed 
to enter community college, college, or university.
    Ms. McLaughlin. The GEAR UP program is also a competitive 
grant program, in contrast to a formula program. The program 
requires matching funds from each partner participating in the 
program. The GEAR UP partners contribute up to 50 percent of 
the total funds.
    Mr. Miller. What is the cost of running the GEAR UP?
    Ms. McLaughlin. We are requesting $325 million this year.
    Mr. Miller. And the administrative cost overhead is?
    Mr. Dickey. $320 million.

                      PURPOSE OF TRIO AND GEAR UP

    Mr. Porter. If I could ask a question at this point. Is it 
fair to characterize the TRIO program as reaching out to young 
people who otherwise wouldn't see the possibility of going on 
to a higher education, a special fund that will help them do 
that?
    Mr. Fritschler. Yes, it is and TRIO is actually eight 
separate programs.
    Mr. Porter. But the principal thrust is here's the 
resources. If you put your mind to it, we are going to give you 
the money and you can get a higher education. And the thrust of 
GEAR UP is to take people at the youngest possible age and tell 
them that they ought to have a desire, because it is possible 
to get a higher education and we will see you through this 
process with additional funds.
    Mr. Fritschler. I think that is a good way of 
characterizing it.

                        FUNDING TRIO AND GEAR UP

    Mr. Porter. But back to the central question. If we aren't 
holding out enough funds to get all the kids who are already 
motivated to go on to a higher education through the TRIO 
program, why are we setting up a separate program to create 
more desire when we aren't fulfilling the desire that is out 
there already?
    Mr. Fritschler. One thing I don't know and if anyone in the 
room knows, please let us know, I don't know how many people 
move from GEAR UP to TRIO. It is not a requirement of the 
program. Once a student is in the GEAR UP program or their 
school participates in the GEAR UP program, the hope is that 
the school itself will assist the student through the 
admissions process into colleges and universities.
    Mr. Dickey. May I ask a question, Mr. Chairman?
    Mr. Porter. But money being a finite thing, we have to 
decide whether we put more money in this program or moremoney 
in this program and what Mr. Dickey is saying is why aren't we simply 
putting the money where the demand is because there is a lot of 
unfilled demand already.
    Mr. Fritschler. The answer to that, I believe, is we feel 
there is a bigger bang for the buck by spreading it out the way 
we are doing it. It will affect more students this way by using 
some of the funds available to help the school.
    Mr. Dickey. I don't think he is hearing your question, Mr. 
Chairman.
    Mr. Fritschler. I think I heard it.
    Mr. Dickey. If you gave TRIO more money, you would have 
more students affected. Now listen to this. Twice as many are 
likely to enroll and graduate from college as similar students. 
Four times are likely to enroll and graduate from a 4-year 
institution as similar students without precollege intervention 
services. That is a proven dividend from TRIO. What do we have 
in GEAR UP? You know what you are going to tell me? What we 
have heard before. We don't have the experience yet. We had the 
experience with TRIO. It is there. It is in concrete. We have 
people, we have faces of people saying thank you and of 
graduates coming back and saying this is my testimony. What in 
the world is going on? Who are we trying to serve? Is there a 
person who created GEAR UP, a Mr. Gear somewhere? Is there a 
Mr. Gear that you all are listening to? Who is the author of 
GEAR UP?
    Mr. Fritschler. There is no Mr. Gear that I have met. The 
idea is to try to approach this problem, which is a large 
problem from yet another perspective. By putting all of that 
money into TRIO, you would indeed help more of the TRIO 
contingent grow. But the hope is, and I think so far we have 
proved that we reach more students with both programs.
    Mr. Dickey. What do you have against TRIO?
    Mr. Fritschler. I have nothing against TRIO.
    Mr. Dickey. What are the defects? Tell me one defect. All 
three of you all the way down to Thomas, what is wrong with 
TRIO?
    Mr. Fritschler. I haven't been able to find anything wrong 
with TRIO. I think it is terrific, but I love all my children. 
GEAR UP is doing a good job too.
    Mr. Porter. Well, I think you can understand, Dr. 
Fritschler, that it is very likely Mr. Dickey will have an 
amendment on the TRIO program when we come to mark up this 
bill.
    Mr. Dickey. There is a chance, and I don't think you all 
are going to argue with it. I don't think you will.
    Mr. Porter. Mr. Miller is going to take the chair. We are 
going to have another vote shortly we understand. I have one of 
my other subcommittees meeting across the hall with Secretary 
Albright, and I would like to be able to ask her some 
questions. So I asked Mr. Miller to take the chair. So, Dan, 
why don't you ask a few questions now, and then you will have 
the remainder and maybe you could even get Mr. Dickey to ask 
some more questions.
    Mr. Dickey. I am gone. Thank you, Mr. Chairman, for the 
time.
    Mr. Porter. We are neglecting Mr. Woods over here, and we 
need to beat up on you for a little while now. Let's talk about 
student loan volume, and you can tell me whether these are 
accurate statements. Data from the department indicate that the 
loan volume in the direct loan program has declined from 
$11.200 billion in fiscal 1998 to $10.600 billion in fiscal 
1999. The number of schools has declined by about 40 schools or 
3 percent decline. Some of those schools are pretty big such as 
Michigan State, University of Michigan, and Boston University. 
Can you tell us why these declines are being experienced, and 
do you believe the funds provided in the Higher Education Act 
are sufficient to administer the program?
    Mr. Woods. Let me start with the back. I believe the funds 
certainly are sufficient to administer the program. We are 
asking for an increase in this area because the volume in the 
program is, in fact, growing as a result of more students 
entering the program at the front end and then the loans taking 
many years to pay off.
    The Direct Loan community is very concerned about any loss 
of schools from the program. There are gains as well and I 
can't tell you what the net is, but I don't think it is a 
negative 40.
    Mr. Porter. Why are some of the larger schools coming out 
of the program?
    Mr. Woods. The reasons that are fed to us are economic 
ones. Incentive packages being offered, discounts in the 
origination rates at the front end that are offered to students 
through the FFEL program attract schools in that direction. 
That is the most common argument that we hear. There is a very 
healthy service competition that goes on between the direct 
loan program and the FFEL program that I believe has served to 
improve both programs and has been to the benefit of schools 
and to students. The numbers, the shifts that you see so far 
are certainly not earth-shaking, given the total number of 
schools involved. If the 40 was right, and again, I believe 
that number is high, that would be 40 out of some 1,200.
    There are schools coming in the other direction, and I 
think the direct loan program continues to deliver effective 
service growing more effective with this e-commerce strategy 
that we talked about. So I think dollars at the front end 
clearly is the issue that is most frequently raised with us.
    Mr. Porter. My recollection is that the fees for the 
student are at 3 percent according to the Department; is that 
correct, under the direct loan program?
    Mr. Woods. Correct.
    Mr. Porter. Even though the law specifically says 4 
percent?
    Mr. Woods. The fees for the Direct Loan program were 
changed from 4 to 3 percent, yes, sir.
    Mr. Porter. We think that that is a direct violation of the 
law as written. You probably are aware of our feelings about 
that.
    Mr. Woods. I am indeed.
    Mr. Porter. Obviously we haven't resolved that.
    Mr. Bonilla.

                    ADMINISTRATION SUPPORT FOR TRIO

    Mr. Bonilla. Thank you, Mr. Chairman.
    Dr. Fritschler, I want to touch on a subject that my 
colleague, Jay Dickey, has touched on earlier, that is 
involving TRIO. I hate to put it this way, but TRIO versus GEAR 
UP because, as you know, a lot of us are concerned that a 
proven program like TRIO that actually, of course, has five 
divisions within it has proven to be so cost effective and so 
successful and so efficient and everybody loves it, and when 
you compare the increases that are being requested by the 
administration in comparison to the unproven GEAR UP program 
which, as I asked the Secretary the other day, Secretary Riley, 
did anybody ever give any thought to putting a GEARUP-type 
program, to adding that on to TRIO in the first place, and given the 
fact that you had something that was working well, why start up 
something new, which, in essence, one could argue, takes resources away 
from what could have gone to TRIO.
    So pardon me if I am a little redundant in relation to what 
Mr. Dickey has brought up today, but I did want to bring up 
that point. And the question I have specifically that I don't 
think--that I think has not been covered is, are there enough 
program staff within the Department of Education helping to 
monitor and run the TRIO programs, especially when the TRIO 
appropriation is increased, and therefore funded more projects 
which means the number of projects that each staff person has 
to monitor has also increased. Are we taking care of that?
    Mr. Fritschler. I believe we have, sir. Of course we have 
the extra $45 million appropriation for TRIO last year which we 
have allocated. We feel that it is well staffed at the moment.
    Mr. Bonilla. You are sure about that?
    Mr. Fritschler. I am sure.
    Mr. Bonilla. You say you feel. So your numbers are adequate 
or are you not sure about specifically the staff numbers?
    Mr. Fritschler. I think they are adequate, but we look at 
this all the time and if they are not, we will move to change 
it.

                      SERVING THE TRIO POPULATION

    Mr. Bonilla. Maybe Mr. Dickey brought this up as well, that 
this current level of funding only allows approximately 10 
percent of the eligible population to be served for the TRIO 
program. Maybe you expressed this to Mr. Dickey earlier, but--
do you think it is enough for TRIO in relation to what we are 
talking about here today?
    Mr. Fritschler. I think the problem out there is huge, and 
one of the reasons for supporting GEAR UP is that we felt that 
we would reach a larger population through a slightly different 
perspective. GEAR UP deals with an entire school, and we 
thought that would be another way of reaching some of the 
people who would otherwise be in TRIO on an individual basis. I 
do not know what the reasonable level for TRIO would be but I 
can tell you I agree with you that there are more people out 
there than we are serving. There is no question about that.
    Mr. Bonilla. Is it a little bit odd, then, to see the $125 
million budget increase request for GEAR UP versus $80 million 
for the proven program of TRIO? $125 million for an unproven 
program versus a proven program?
    Mr. Fritschler. We have had good success with GEAR UP. We 
felt it started out at a fairly low level, and we can 
accommodate these funds and on a per capita basis, we think we 
will be reaching more students. However, I cannot argue with 
you that we could certainly use more money for TRIO. The 
population that both of these programs serve is very large.
    Mr. Bonilla. Do you feel directly that the GEAR UP program 
has caused TRIO to suffer?
    Mr. Fritschler. No, I don't think so.
    Mr. Bonilla. I didn't expect you to say that, but I know, 
because you think it's a complement in a new area that they--
you can see where I am coming from. I hope you can let us see 
what thought process we are taking on here.
    Mr. Fritschler. I understand.
    Mr. Bonilla. At this time I don't think I have anything 
else, but thank you very much for your time today. Thank you, 
Mr. Chairman.
    Mr. Porter. Thank you, Mr. Bonilla.
    Mrs. Lowey.

                          GEAR UP STARTS EARLY

    Mrs. Lowey. Thank you, Mr. Chairman. I did sneak in because 
I was across the hall. As you know, our other committee and 
Secretary Albright is here. But I wanted to just stop by 
because I understand there was some discussion of GEAR UP and 
TRIO, and I thought perhaps I can make some comments. I think 
someone asked where did GEAR UP come from and why do we have 
GEAR UP. There are many questions about it. I happen to be a 
great fan. One of the reasons is that it was based on a program 
which I introduced many years ago called Link Up for Learning, 
and the idea was to bring the resources of the community to 
bear on our younger children in the classroom.
    And what I think is so important about GEAR UP is not that 
TRIO is not doing the job, but what I found, and when I 
developed Link Up for Learning and GEAR UP is the--I don't know 
if you call it the son or the daughter or the inheritor or 
whatever, was that we really had to get these youngsters early. 
We really had to talk to them early and we had to get them the 
mentoring and the support and the cost for GEAR UP, because it 
is dealing with the whole class, it is about $260 compared to a 
$1,000.
    Again, TRIO is doing very good things, but it is different 
from GEAR UP. In New York, there is a grant going to the New 
York State Department of Education, to St. John's University, 
and in my judgment, I wish we could have even more funds 
because I would like all of our youngsters to benefit. What is 
so exciting about these programs is you are starting early. 
Now, I often think of my grandkids. I have five of them and 
they go to school so ready to learn. They are there and they 
are like sponges, they absorb everything. Not all of our 
youngsters have those opportunities and in this complex society 
of ours, in my judgment, if we find something like GEAR UP that 
is working, targeting these kids, working with them in the 
classroom, I think we should continue to support it.
    So I want to give you every opportunity to share with us 
any other information you have about GEAR UP and the success of 
GEARUP and again, TRIO is doing good work. It is an older 
program and I support it as well.
    Mr. Fritschler. Thank you. I wish you had been here a 
little bit earlier.
    Mrs. Lowey. I understand there was some discussion, so I 
thought maybe I would leave the other hearing and come over 
here.
    Mr. Fritschler. You stated it very well.
    Mrs. Lowey. I am sorry that my colleague has left, but I 
will discuss it with him later.
    Mr. Fritschler. GEAR UP is in its first year, so we don't 
have too much data yet. We have visited GEAR UP sites. We are 
getting very good reactions to it. We have more and more 
communities, more partnerships applying for money. We are 
offering some technical assistance, of course, to help with 
those grants, but we think you are correct, this program does 
reach students who would not otherwise be reached. We will 
reach more of them for less of an expenditure than we might 
have otherwise put forward. We know there are many students in 
this country who don't have the advantages of knowing what 
college and universities are like, whether ornot it is possible 
to get in one or even what it is all about. We need to start very early 
with the students to inform them that they can have access to higher 
education if they do the right things when they are in high school, and 
I suppose even before that.
    So we feel very strongly about the success of the program. 
Maureen has visited more of these sites than I have. Maybe you 
could add some color to this conversation.
    Ms. McLaughlin. The biggest thing that I find when we go to 
visit the sites is the incredible level of enthusiasm among all 
the partners. When I say ``all the partners,'' we are talking 
about principals of middle schools, high schools, business 
leaders, philanthropic leaders in the community, and college 
presidents. The enthusiasm among all of those partners at all 
levels of what we are trying to do here, as you said, start 
early, work with a whole class of students and stay with them 
until they get to the high school level, is really quite 
phenomenal. Thank you.
    Mrs. Lowey. It reminds me of the ``I Have a Dream'' 
program, and Gene Lange happens to be a good friend of mine, 
and I remember when he started it and the whole idea, I think 
these things support each other. You work hard. We are going to 
give you that support, and we are going to give you some role 
models, so when it is time to move on and get that education, 
you will know what it is all about and you will be ready.

           CHILD CARE ACCESS MEANS PARENTS IN SCHOOL PROGRAM

    I am not sure if I used up all my time but as long as the 
bells haven't gone off--in your testimony, Dr. Fritschler, you 
referred to increasing support for child care for disadvantaged 
parents who are in school, and I think this is incredibly 
important, especially as we see more and more adults enrolling 
and are returning to college. Can you expand on how you plan to 
use the $15 million requested by the Administration to add 150 
more institutions? How do you select these new institutions? Is 
it the intention of the program to have child care services 
available on an extended schedule to accommodate the long days 
that students have?
    Mr. Fritschler. On the last point, the answer is yes. The 
schedule would be extended. And as I understand the process, we 
would go through what I would describe as our normal 
competitive grant process and encourage schools which qualify 
for the program to apply. We have developed, I think, a very 
good system of technical assistance for the applicants that 
allows the Department to go out and visit with prospective 
applicants. We help them understand the program. We describe 
the program and then we tell them what we are looking for when 
it comes to an application.
    So it requires a lot of work. You have to go backwards into 
the thing to get it started but once it is off the ground, it 
starts to take on more of a life of its own.

                 PELL GRANTS COVERAGE OF TUITION COSTS

    Mrs. Lowey. One last question. How are we going to deal 
with the fact that Pell grants make it less and less of the 
cost of a public 4-year education?
    Mr. Fritschler. First, let me say that in the last 6 or 7 
years, the Pell grants moved up about $1,000 from $2,300 to 
$3,300 this year. Our 2001 proposal is to move the maximum up 
to $3,500. I think what I see happening out there is the 
introduction of a variety of programs to supplement Pell grants 
or to add to Pell with funds from the States, and even from tax 
credit and tax deduction programs. So I think we have to start 
looking at the financial aid system more closely than we did in 
the past because there are now so many pieces to the system, 
and it is not clear to anyone just exactly how they interact 
and support each other. But I think what is clear, is that it 
is difficult to look at any one of the programs in isolation.
    Mrs. Lowey. Let me just say this. I feel this very 
strongly. My visits to schools, and I visit them very often, 
the kids are up to here with debt. And when you are saying with 
all due respect that we have to figure out how the pieces go to 
together, we sure better figure out how the pieces go together, 
and I know, I visited one school, Mr. Chairman, it was a 
community college. This young woman was crying to me because 
she couldn't find $2,000. She was studying to be a teacher and 
then she is going to figure out how she can go to night school 
to get a master's in computer science when, in my judgment, we 
really want to help her be a teacher.
    So I think we have to figure out together what is going on 
here and ensure that our youngsters don't need to hire 
consultants to figure out how they are going to get all this 
money, because it is not as if they are not working. They are 
working three jobs. They are struggling. They are trying to go 
to school. And I think the system needs a lot of improvement. 
We have to be sure these kids get the help they need so they 
can earn their way in our society and I thank you. And I thank 
you, Mr. Chairman.
    Mr. Porter. Thank you, Mrs. Lowey.

     FUNDING OF THE ADMINISTRATIVE COSTS OF THE DIRECT LOAN PROGRAM

    Mr. Woods, I want to pose one additional question with 
respect to the Direct Loan program. The Department, along with 
the Congress, which was then under the control of the 
Democratic party, decided to fund the administrative costs of 
the direct loan program through a mandatory appropriation. The 
appropriation amounts were fixed in law. The reauthorization of 
the Higher Education Act changed the funding levels but 
retained the permanent appropriation. While there is no request 
for increased funding, it seems clear that the department is 
angling for one, either now or in the not too distant future. 
The department has consistently overestimated the number of 
students in the direct loan program and the demographics of the 
student population was surely known. How then could the amounts 
appropriated in the Higher Education Act be so far off? 
Secondly, do you expect to seek funds, either formally or 
informally, in the year-end negotiations that seem inevitably 
to accompany completion of this bill? Additional funds.
    Mr. Woods. As I indicated in my opening statement, we set 
an objective in this performance-based organization of reducing 
the unit cost of our operations. That means the unit cost of 
delivering a Pell grant, the unit cost of a direct loan, 
administering FFEL loans, handling of FAFSA applications. To 
reduce our overall unit cost per recipient by 19 percent, if we 
are able to do that, if we meet that goal, okay, we would stay 
within the budget caps projected in the President's budget 
projections. In that instance, we would not be requesting more 
money. That is our objective.

                  DEPARTMENT WEB SITES AND THEIR COSTS

    Mr. Porter. Thank you. Mr. Woods. The government seems to 
be developing a whole number of different Web sites, and the 
Department of Education and Office of Student Financial Aid 
seem to be no exception. As I understand it the Department is 
now initiating a new site to compare FFEL lender benefits and 
services. How many Web sites do your two offices support, and 
how much do they cost and are there nosites that provide a 
similar service on the Web today?
    Mr. Woods. I am not aware of the development of a site that 
would compare FFEL services. I will take that as an assignment 
to report back on that. The cost of our Web sites, again, I 
don't have a total on that, but the beauty of the Web, of 
course, is that these solutions are a fraction of the cost of 
the old solutions. To find and deliver the kind of aid that we 
have been delivering in the past via a mainframe-centric 
solution, I would estimate the cost there for a typical 
application to be at least 10-to-1, and maybe a 100-to-1. The 
only reason I can talk to you about staying within the budget 
cap is because the existence of the Worldwide Web and our 
ability to use it to deliver services. We have proliferated Web 
sites around particular projects and activities, and I think 
that is a flaw in our strategy. Our approach going forward is 
very much like you see in the commercial marketplace where 
portals or Web sites that can be configured to an individual 
and their needs are developed to pull all of these pieces 
together in a common look and feel that is easy to use by the 
customers.
    What I have joked with the student aid community is I 
intend to deliver portals to them, configurations to them using 
Web standards, and if they have trouble figuring that out, they 
shouldn't have to get training from the Department. They can 
simply go out the door, grab a student by the collar and bring 
them inside and they will have it explained to them. And I 
think that is where we are headed with this Web strategy.
    So on balance I think it is great. I would be happy to give 
you numbers on the details of it.
    [The infomration follows:]

    The Office of Student Financial Assistance currently has 16 
web sites; an assessment is under way to review the need for 
these sites and possibly combine or eliminate unnecessary or 
redundant sites. For example, easi.ed.gov will be shut down 
soon because its function has been superceded by students.gov, 
which recently won a ``Hammer Award'' from the National 
Partnership for Reinventing Government. Also, certain sites 
such as fafsa.ed.gov, which is used for electronic aid 
applications, and pin.ed.gov, which is used to gain access, are 
paired sites. These sites will utimately be reconfigured so 
users can access information and applications through a single 
portal.
    OSFA obligated $5.3 million in FY 1999 to set up, manage, 
and provide servers for these sites; $786,000 has been 
obligated to date in FY 2000 to support web site functions. 
Some information provided on SFA sites overlaps information 
provided by financial partners and schools. In those cases, SFA 
minimizes duplicative content and provides links to other 
sites. Most SFA sites, however, provide unique electronic 
services and information.
    The Office of Postsecondary Education maintains a web site 
providing a variety of student aid and higher education data, 
either directly or through links to other sites. This site is 
funded under the Department's overall contract for web-based 
services.

    Mr. Porter. Mr. Miller.

                Student Loan Debt Management Counselling

    Mr. Miller [presiding]. Let me ask some questions about the 
financial assistance programs and such. Just some generalized 
questions. I try to meet with financial people at schools just 
to get some ideas about some of the concerns they have and two 
of them--one is that sometimes it is too easy to borrow money 
and they end up building a debt. This is more for community 
college. The community college financial aid officer was 
saying, you know, basically he can't discourage them from 
borrowing money and people graduate from our community college 
with $20,000, $30,000 dollars worth of debt. They enroll and 
get the maximum amount of money and get a new car or something.
    He says he cannot counsel students not to do that. Is that 
a problem? This is what one financial aid officer at a 
community college was telling me. I talked to a university 
financial aid officer and she was saying, in effect, the same 
thing. Is there--because they have got to pay those loans back. 
That is a real burden. Kids go to college and our friends' kids 
and all that, they are stuck with those loans for a long time. 
They don't realize necessarily they have got to pay them back. 
How much of a problem is that?
    Mr. Woods. Let me start again at the back end of that. We 
have got some charts that compare the investments made in 
college education in terms of lifetime earnings with 
investments in mutual funds and Microsoft stock, and the 
college education is still the best bet you can make. It is a 
good investment by students. We don't have any policy nor 
regulation nor practice that would, at least to my knowledge, 
that would require a school to avoid counseling a student not 
to borrow, not to get more money than they need. In fact, I 
know of a number of schools who have been very successful in 
driving down the student loan default rates on their campuses 
by doing exactly that, by counseling the students not just 
about their loan borrowing or their education borrowing, but 
about their whole approach to debt management. There are some 
terrific outreach efforts on the part of servicers in the FFEL 
community as well, and I think there is an appetite in the 
entire community, within the Department, in the FFEL community, 
on college and proprietary school campuses to continue to go 
after this default rate. We have had remarkable success since 
1993 bringing the number down from over 22 to 8.8 percent last 
year, and we are looking at another decline this year.
    Mr. Miller. A 19-year-old kid can go and borrow what 
themaximum amount is. They may or may not know what they really need 
and will take the maximum amount that is available. Is it up to the 
individual school to decide they are going to have any individual 
counseling programs along these lines?
    Mr. Woods. It is indeed. What we are going to do is try to 
encourage some of these best practices across the industry. 
There are services in the FFEL community. There are schools 
that are aggressive in this regard and experts in this field. 
The Secretary is going to bring these people together, in fact, 
in a symposium this fall and try to lay out best practices 
which we can then sponsor among the entire student aid 
community.
    Mr. Miller. If they need the money, it is fine. It is what 
it is there for. But we don't want to burden them so that ten 
years later they are stuck with----
    Mr. Woods. Don't spend too much on beer and pizza.

                   Timing Of Tax Deduction And Credit

    Mr. Miller. That's right. Another question, and this is 
actually outside the jurisdiction of this committee, but it is 
the whole issue of tax deductions and credits. I am a big 
supporter of tax deductions and credits. But with kids in 
school, you write the tuition checks in August or January. You 
can reduce your withholding on a regular basis and such. Is 
that the most effective way to get aid directly to the student? 
As a Republican, I shouldn't be questioning that.
    Mr. Woods. Let me ask my colleague, Dr. Fritschler, to 
handle that question. We have a division of responsibilities 
and this belongs in his bailiwick.
    Mr. Fritschler. I think it is an effective way to deliver 
aid, at least on some scores because it is believe it or not in 
some ways simpler for a family to get the deduction or credit 
at tax filing time than it is to deal with the financial aid 
forms and applications for an institution. I believe, although 
this is all very new, that most colleges and universities favor 
it because it does simplify processes for them. It is also a 
way of bringing money into the families who are participating 
in higher ed in one way or another on a familywide basis. It 
could be a mother, father, sister, brother receiving the 
benefit. You take a total of what your tuition and fees for the 
year, and then you, of course, apply for the deduction when you 
fill out your tax returns.
    But you are quite correct. The timing might not be right 
for it to benefit students. I don't know quite how to get 
around that. I guess most tax refunds arrive early in the 
spring if you file early and late in the spring if you don't. 
And I guess the advice that would have to be given to people is 
to somehow decrease their deduction to spread out the value of 
the tax refund over the year. But I think in many ways it is an 
easier program to administer from both the family's point of 
view and from the institution's point of view.
    Mr. Miller. Mr. Bonilla.

                     Javits Authorizing Legislation

    Mr. Bonilla. Thank you, Dan. Mr. Woods, I have a question 
for you to follow up. Earlier Mr. Porter was talking about 
those Javits fellowships. I believe you told the chairman that 
the department was legally obligated to pay for the 39 
fellowships which were awarded illegally. If you would, please, 
provide us with the exact section of the law which obligates 
the department. Could you do that for us?
    Mr. Woods. The responsibilities here today are Dr. 
Fritschler catches all the lightning in the hearing. It was 
actually he that dealt with it and the TRIO and GEAR UP issues 
before, so he is going to answer this question as well, sir.
    Mr. Fritschler. I have it with me, actually. It is section 
703--(b)(2)(A) of the Higher Education Act, and I have a copy.
    Mr. Bonilla. If you would just leave it with us today, that 
would be good. We just need to determine exactly what the 
obligations are.

                    Defense Recruitment At Colleges

    I only have one more question and it has to do with a 
hearing that I had. I also sit on the Committee that funds the 
defense department and this relates directly to what the 
Education Department works on and not that anyone is at fault 
at the Education Department. It's a huge problem that we 
discovered today. It was bipartisan concern on the subcommittee 
about some schools that exist in this country, they are either 
school districts or high schools that refuse to even allow the 
Marines or any branch of the military to come on and offer--and 
have a recruiting office or communicate with students. And it 
ties into the Education Department because not only do some of 
the branches of our military offer tremendous educational 
opportunities for our young people, but it's something that 
many of us feel, again, in a bipartisan way, that the kids 
ought to at least have a shot to listen. If they don't want it, 
that is fine. They want to do something else, that's fine too.
    But the policies at some of these schools to shut out our 
Defense Department, our recruiters, especially at a time when 
we have tremendous retention problems, we have tremendous 
recruitment problems, we have a lot of quality-of-life issues 
we are trying to deal with right now in the military, it 
really--it just kind of got under our skin frankly, and some of 
us are tossing around the idea of trying to tie an obligation 
to change that policy to these few schools that are out there, 
if they are going to receive any kind of Federal funds at all. 
And how would you feel about that if something like that were 
raised? This may not be under your jurisdiction, but it is 
something that deals directly with education, with minority 
students in many cases, because they are highly represented in 
all four branches of the military.
    They look for these opportunities, and it is a matter of 
national security, patriotism felt very strongly in some of 
these impoverished areas especially, and it does link directly 
to aid that goes through the Department of Education.
    Mr. Fritschler. I agree with you. It is unconscionable. I 
hadn't heard of the problem before. I can't even imagine it. I 
can't understand what kind of rationale they could come up 
with. Many school districts receive funds, impact aid funds 
when there is a military installation nearby. I don't know how 
many of those there are in the country or how they are 
distributed. They are obviously related geographically to where 
military bases are located. That might be one thing to look at 
in terms of trying to change the policy of these schools. 
Beyond that, I don't have much of an idea, but maybe just some 
visibility to this problem would help.
    Mr. Bonilla. Again, it's just something that showed up on 
our radar screen today because we had very good testimony from 
the Commandant General Jones of the Marine Corps, and a lot of 
us kind of put our pencils down and couldn't believe that it 
was occurring, especially at a time when there are educational 
opportunities out there to be had, and also at a time of low 
recruitment and low retention. I just wanted to raise that 
issue.
    Mr. Fritschler. I am glad you did. I hadn't heard of this 
before.
    Mr. Woods. Through our Web sites we have informational Web 
sites for students and schools. We promote the DOD recruitment 
programs which, as you know, fund educational benefits in 
exchange for service. So we have a working relationship with 
DOD that has tried to be supportive in this area. There is a 
lot of other things that can be done, I think, in that regard 
as well.
    Mr. Bonilla. I thank you very much for your time today. 
Thank you.
    Mr. Miller. We stand in recess until 10:00 A.M. Tomorrow. 
Thank you very much.
    [The following questions were submitted to be answered for 
the record:]



                                          Thursday, March 16, 2000.

                           HOWARD UNIVERSITY

                               WITNESSES

H. PATRICK SWYGERT, ESQ., PRESIDENT, HOWARD UNIVERSITY
CLAUDIO PRIETO, DEPUTY ASSISTANT SECRETARY FOR HIGHER EDUCATION 
    PROGRAMS
DR. GEORGIA DUNSTON, ACTING DIRECTOR, HUMAN GENOME PROJECT
    Mr. Cunningham [presiding]. The subcommittee will come to 
order.
    As you know, John Porter, the Chairman, is caught in 
traffic and asked me to come out of my Defense hearing to come 
over here, which is probably a good idea anyway.
    All of your statements will be put into the record. There 
will be a time limit. We would ask you to summarize if you can.
    And with that, Patrick, that is a good Irish name today, 
Patrick Swygert, Esquire, President, Howard University. We have 
talked before concerning a young man with a bus route.
    Mr. Swygert. Yes, sir, and I think we have been responsive.
    Mr. Cunningham. Good. I think he is there now, isn't he?
    Mr. Swygert. Yes, sir.
    And with that, I would recognize the honorable Patrick 
Swygert.

                       Introduction of Witnesses

    Mr. Swygert. Mr. Chairman, Congressman, thank you very 
much. We very much appreciate your making yourself available to 
us this morning. Mr. Chairman, if I may, I would like to 
introduce at this time, seated to my immediate right, to your 
left, Dr. Claudio Prieto, who is Acting Assistant Secretary for 
Post Secondary Education, U.S. Department of Education. I am 
also accompanied this morning by Dr. Antoine Garibaldi, the 
University Provost; Mr. Thomas Elzey, the University Executive 
Vice President; Dr. Floyd Malveaux, Vice President of Health 
Affairs; Mr. Sherman McCoy, who is Chief Executive Officer of 
our hospital; and Dr. Hassan Minor, who is in charge of 
government affairs at the University. Also with us today is Dr. 
Margarita Benitez, Director of Institutional Development and 
Undergraduate Education Service, the Office of Postsecondary 
Education, U.S. Department of Education.

                           Opening Statement

    Mr. Chairman, if I may, I would like to begin my testimony 
with an overview of the University. And in doing so, I would 
like to share with you a number of exhibits, which are found to 
my left and to your right.

                         FACTS 2000 PUBLICATION

    Our first exhibit is captioned ``FACTS 2000,'' this is 
designed to provide the Congress with a snapshot of the 
University in a number of important areas. The committee is 
well aware that Howard University is the only Carnegie Level I 
Research university serving a predominantly African-American 
population. It is also worth noting that our faculty, Mr. 
Chairman, represent a broad cross-section of America, almost 
three-quarters of whom have earned degrees from one of the 88 
Carnegie Level I Research universities.

                        SERVICE 2000 PUBLICATION

    Exhibit 2 is ``Service 2000,'' a compendium of more than 
100 examples of activities and programs that the University has 
dedicated to community and national service. Speaking of 
service, Mr. Chairman, I am absolutely delighted to introduce 
to you this morning an exciting new CD entitled ``American Art 
from Howard University,'' from the Howard University 
collection.

                            AMERICAN ART CD

    This CD, Mr. Chairman, is one of a new series of digital 
projects. The CD can be viewed by theme, by artist, or virtual 
tour. It is annotated with video clips by the Gallery director, 
Dr. Trixobia Hayes Benjamin, and in doing so she enhances the 
intensity of the visual experience. This CD provides the 
University with a unique method of bringing important works of 
art to school children and other interested citizens across the 
Nation. Mr. Chairman, I think of special note, this CD speaks 
to both the legacy of Howard University, its singularly 
important collection, and it also makes it available 
nationwide.

                 SPECIAL REPORTS FOR THE U.S. CONGRESS

    Our third exhibit is ``Special Reports for the United 
States Congress,'' and contains: a status report on The 
Strategic Framework for Action, which is our strategic planning 
operating document for the past several years; the Fiscal Year 
2001 Analytical Abstract; and the University's GPRA Report. 
Copies of Facts 2000, Service 2000, and Special Reports for the 
United States Congress have been provided to the committee.
    Mr. Chairman, the Strategic Framework for Action, which has 
been our operating document for the past several years, calls 
for achievement in four strategic areas: strengtheningacademic 
programs; promoting excellence in teaching and research; increasing 
private support; and enhancing national and community service.
    After 42 months, Mr. Chairman, I am very pleased to report, 
as our testimony indicates, that we have completed the 
overwhelming number of our projects. I will not go through the 
report project-by-project.
    Howard University was created by Congress, as you know, to 
serve a national need. One hundred and thirty-three years 
later, we maintain fidelity to that mission. As the first two 
exhibits in the Analytical Abstract demonstrate, Howard 
students, like our faculty, come from virtually every corner of 
the Nation and each of the 50 States, Mr. Chairman, as the 
illustration indicates.

                             ACCREDITATION

    Howard University is fully accredited by the Middle States 
Association of Colleges and Schools. Exhibit 3 shows the 32 
different agencies that have also accredited schools and 
colleges of the University. Mr. Chairman, in 1999, we were 
reaccredited for a 10-year period by the Middle States 
Association.

                     NATIONAL ACHIEVEMENT SCHOLARS

    Exhibit 4 illustrates the performance of entering freshmen 
relative to all African-American students and to all test-
takers nationally. I think this is a very interesting exhibit, 
Mr. Chairman, because what it demonstrates is that the overall 
test scores, although they slightly declined nationwide, the 
average score for Howard University students was 192 points 
higher than the national average for African-American test-
takers, and higher than the national average for all test-
takers.
    As you may recall, in 1997 Howard University enrolled more 
National Achievement Scholars than any other university in the 
Nation. The National Merit Scholarship Corporation recently 
announced that Howard University enrolled 41 National 
Achievement Scholars this year. The Achievement Program honors 
outstanding high schools, and we are absolutely delighted that 
we continue to recruit such strong and outstanding students.

                        ADVANCED DEGREES AWARDED

    Howard University continues to lead the Nation, Mr. 
Chairman, in producing African-American graduates at all 
levels--undergraduate, graduate, and professional. Exhibit 5 
shows the number of advanced degrees awarded by the University 
last year. And Exhibit 6 shows the number of University 
employees.

                         RESEARCH PRODUCTIVITY

    Exhibit 7 shows that research productivity has again 
increased over the past 2 years. After a dip 2 years ago, we 
are back on the right track.

                               ENDOWMENT

    Exhibit 8 is a portrayal of changes in the endowment of the 
University since 1988. During that period, Mr. Chairman, the 
book value has increased threefold.
    Good morning, Mr. Chairman.
    Mr. Porter. Good morning.
    Mr. Swygert. And good morning, Congressman Jackson.

                                 ALUMNI

    Exhibit 9 demonstrates conclusively that the University 
serves a national constituency. Mr. Chairman, we are now 
looking at Exhibit 9, page 11 of my testimony. Exhibit 9 
demonstrates conclusively that the University serves a national 
constituency whose alumni reside in all of the 50 States. 
Nineteen States have more than 500 Howard alumnae, 13 have more 
than 1,000, and 6 have more than 2,000. In an earlier exhibit, 
Mr. Chairman, we indicated that Howard University currently 
enrolls students from each of the 50 States.

            INTERDISCIPLINARY SCIENCE AND ENGINEERING CENTER

    Exhibit 10 reflects an initiative that we have sought to 
bring to the committee's attention for the past 3 years. It 
speaks to the Interdisciplinary Science and Engineering Center, 
which we hope to receive funding for this year, in an attempt 
to upgrade the University's facilities in the basic sciences, 
as well as provide a robust foundation for substantive research 
in emerging areas. This will be the principal intellectual 
resource for interdisciplinary research activities for the 
entire University, increasing the existing supply of talented 
students of color in the sciences. Three of the overarching 
programmatic areas of activity include biomedicine, 
computational sciences, and engineering.
    Mr. Chairman, during the questions and answers I will be 
happy to return to the Science Center. We have discussed and 
you have given me the opportunity to bring it to your attention 
directly, which I very much appreciate, and I will not speak 
more to it at this time.

                          BIOMEDICAL RESEARCH

    Two major themes of biomedical research will be pursued--
cellular and molecular biology, and genetics of complex 
diseases that disproportionately affect African-Americans. The 
primary activity in cellular and molecular biology is the Human 
Genome Project that involves gene mapping genomic analysis, and 
investigating human DNA.
    As research becomes more sophisticated and centered on 
molecular structure and interactions, the need for mathematical 
modeling and computational analyses becomes more apparent. 
Science can now combine the experimental components with 
theoretical and computational approaches to better understand 
processes and, ultimately, systems. At Howard University we 
stress interaction among mathematicians, scientists, engineers, 
and computer-based scientists who serve as the backbone of 
theoretical and computational sciences.
    Research on metals, ceramics, polymers, semiconductors, and 
combinations of materials called composites unites both science 
and engineering. On the science side, we find the application 
of biology, biochemistry, chemistry, and physics. On the 
engineering side, chemical, electrical, and mechanical 
engineers focus on processing and assessing properties. The 
central objective in all of this is to generate and apply 
relevant knowledge and insight to effectively produce new 
materials that solve important problems and improve our overall 
quality of life.

                       NUMBER OF DEGREES AWARDED

    Howard University, Mr. Chairman, has awarded more than 
90,000 degrees since its founding. For 133 years, it has been a 
major avenue of postsecondary access and opportunity for many 
Americans, and it has taken the underprepared, underfunded, 
high potential student and produced more successful, prominent, 
professional taxpaying citizens than any other university of 
similar size and complexity.
    I want to thank the members of this committee publicly for 
your investment and your faith in Howard University. Your 
support enables the University to provide a comprehensive, 
high-quality curriculum that makes it possible for students 
with ability, who come from families of limited means, to 
become contributing, productive participants in the mainstream 
of American society.
    Mr. Chairman, this concludes my opening statement. As you 
may recall, Mr. Chairman, last year Trustee Jack Kemp 
introduced one of our students, Ms. Carla Peterman, Howard 
University's 1999 Rhodes Scholar. Carla is doing just fine at 
Oxford and she sends her special regards to you and themembers 
of the committee. She visited with us about a month ago and she is 
doing exceptionally well.
    I would like now, if I may, Mr. Chairman, to introduce one 
of Howard University's most distinguished research faculty 
members, Dr. Georgia Dunston. Mr. Chairman, I referenced a 
moment ago our Human Genome Study Project. Dr. Dunston is 
leading that effort and has in short order assembled a cadre of 
scientists who are working with her. She is the Acting Director 
of that project. She has worked very closely with Dr. Francis 
Collins out at NIH, and he, indeed, has been supportive of her. 
He is a dear colleague of hers and, as you may recall from last 
year's testimony by Dr. Collins, he referenced the project and 
the program at Howard University. We thought it would be 
helpful this year to introduce to the committee formally the 
object of our affection and attention, Dr. Georgia Dunston.

                          HUMAN GENOME PROJECT

    Dr. Dunston. Mr. Chairman, Mr. President, I am delighted to 
have this opportunity to make a statement regarding the effort 
at Howard University on the Human Genome Project. The newly 
formed National Human Genome Center at Howard University is 
committed to genetics research on diseases common among 
African-Americans and people of African descent. We are funded 
for research, that has already begun, in diabetes, prostate 
cancer, and breast cancer.
    A current challenge in science that is universally 
recognized is the need to characterize the variation in the 
human genome and determine its correlation with disease in the 
hope of obtaining the knowledge necessary for prevention, 
diagnosis, and treatment. Towards this end, the mission of the 
National Human Genome Center at Howard University is to, first, 
explore the science, and then to teach the knowledge of DNA 
sequence variation and its relationship to disease causality, 
treatment, and prevention.
    I am very pleased that over the course of the past 3 years, 
with the tremendous support of the University administration, 
we have assembled a top-flight team of investigators at Howard 
University that address all of the areas that are currently 
engaged in the Human Genome Project; namely, the actual 
genotyping and analysis of the DNA; the bioinfomatics and 
management of the overwhelming database that is coming forth 
from the progress of the Human Genome Project; the collection 
of materials for the population, which is key and central to 
the Human Genome Project in its current stage.
    We will have a sequence very shortly. The key to 
understanding the biology of that sequence lies in the pattern 
of variation. It is a fact that African people, in general, and 
African-Americans, in particular, have a very unique 
opportunity to contribute to the resolution of the challenges 
of variation because of human history and population history, 
and if the committee desires I can explain why that is so, like 
no other population. And because this is an area that has 
tremendous implications for ethical, legal, and social 
implications, we have a component in our Center to address the 
area of genethics, which is particularly addressing changes 
that are coming about from this project.
    So with those four areas, the population, the molecular 
analysis, the statistical analysis, and the ethical, legal, and 
social implications of the knowledge coming forth, we are 
uniquely prepared by virtue of having all of these resident in 
one setting to address the major challenge of the project to 
date--understanding variation and its broad application to all 
populations. And I am prepared to answer any questions that you 
might have.
    [The statement of Patrick Swygert follows:]



    Mr. Porter [presiding]. President Swygert, and Dr. Dunston 
and Dr. Prieto, first, I apologize for being a little late. 
Secondly, I want to welcome all of you.
    Mr. Swygert. Thank you, sir.
    Mr. Porter. I think I did get the opportunity to hear most 
of your testimony.
    Since Mr. Cunningham was kind enough to open this session, 
I am going to call on him before I call on myself.
    Go ahead if you would like, Mr. Cunningham.
    Mr. Cunningham. Thank you. Usually, when you're hot, you're 
hot, when you're not, you're last down here. [Laughter.]
    So I will take charge of this opportunity, and my colleague 
down there too, Mr. Jackson.
    First of all, I would say this weekend is my daughter's 
birthday, and she scored 1600 on her SATs at Torrey Pines High 
School.
    Mr. Swygert. Congratulations, sir.
    Mr. Cunningham. Thank you. And my oldest is a senior at 
UCSD; she scored 1550. They take after their mom. [Laughter.]

                             CD-ROM PROJECT

    But she wants to go into medicine. But her passion is art. 
Her favorite artist is Frieda, which I would not have chosen, 
being conservative, with her background, but she likes her art. 
And what I would do is implore you, I know under the gift ban I 
cannot accept one of those CDs, but I would be happy to pay, as 
a birthday gift for my daughter this weekend, if I can purchase 
some of those from you because she would love that kind of art. 
She has it all over her room and so forth.
    Mr. Swygert. Well thank you.
    Mr. Porter. I would advise the gentleman that these are 
matters of information that you can accept, as a matter of 
fact.
    Mr. Swygert. Yes, they are exhibits and they are for the 
edification of the committee.
    Mr. Cunningham. I know. I know the Chairman has one. We 
have got the covers, but I would be willing to pay for them 
just as a birthday gift. As a matter of fact, my daughter would 
appreciate it probably if I paid for it more than just got it 
free. [Laughter.]
    It is like going on a date and picking flowers out of the 
garden instead of going down and buying a rose thing.

               UNIVERSITY PARTNERSHIPS WITH OTHER SCHOOLS

    In your test scores that were so high, are you working with 
other colleges? Because I know the great percentages of 
African-Americans that start school and drop out, which is a 
matter of concern, whether it is high school or college, to 
keep those students actively engaged. Similarly, if you lookat 
the total number of students that start college in any ethnic 
background that drop out. Are you working with other schools?
    Mr. Swygert. Yes, sir. We are doing several things. In the 
first instance, locally in the greater Washington metropolitan 
area, under the direction of our new dean of education, Dr. 
Vinetta Jones and some of her colleagues, we are trying to do 
more with the local school districts. That is a great 
challenge, as you know. There are jurisdictional issues, there 
are resource issues. But we are trying to work with the local 
schools to help identify students of potential and to provide 
both mentoring opportunities, visitation opportunities, and as 
much support and encouragement as we can.
    As a research university, to some large extent we are a 
receiving institution of the graduates of other institutions, 
primarily Historically Black Schools Colleges and Universities. 
To that end, we have made, I think, some significant progress 
as a result of a number of major grants that we have received 
over the past several years. The National Science Foundation 
has designated Howard as a center, and one of the things that 
we are doing with that grant is running summer institutes and 
continuing education programs for faculty at those schools and 
colleges. All these activities take place on our campus, 
largely over the summer months. The idea is to identify and 
encourage students interested in the sciences to continue.

                     FUTURE FACULTY FELLOWS PROGRAM

    Thirdly, we are doing something which we think is 
consistent with our national charter. This is now the fourth 
full year of a program at Howard that we are particularly proud 
of. It is called the Future Faculty Fellows Program. The Future 
Faculty Fellows Program seeks to identify graduate students of 
extraordinary talent. In order to encourage those students, we 
give them substantial financial aid packages, encourage those 
graduate students to consider, and indeed to act upon, the 
opportunities presented to become professors themselves.
    One of the challenges, as you know, that we are confronting 
in American higher education is the replenishment of the 
professoriate--the number of faculty in all disciplines. For 
instance, there is a greater need, one might argue, in some of 
the hard sciences as opposed to areas such as social sciences 
and the humanities, although that is subject to argument. The 
point though is that the faculty is graying, and it is graying 
as well at the Historically Black Colleges and Universities.

                DECREASING THE HIGH SCHOOL DROP-OUT RATE

    Mr. Cunningham. Let me interject so that I will have time 
to ask another question. My concern is the reaching out and 
maybe even having students go to high schools, for example, to 
mentor youngsters, like we have law enforcement and those kinds 
of things, to encourage them to stay in and to do things. I was 
a college dean at a national university in San Diego. I know 
that the Western Association of Schools and Colleges gave us 
our accreditation. Do you have articulation agreements with 
schools like Harvard and Yale and MIT for acceptance of your 
credits so that your students can go on to higher education?

               UNIVERSITY PARTNERSHIP PROMOTING EDUCATION

    Mr. Swygert. We have a number of relationships. I will 
speak more directly, if I may, by adding more to the record 
post my testimony.
    Mr. Cunningham. Yes, sir.
    [The information provided:]

            UNIVERSITY PROGRAMS PROMOTING GRADUATE EDUCATION

    The University has a number of successful and ongoing 
relationships with colleges and universities around the nation. 
For example, Howard participates in the National Name Exchange 
program in which the names of recent undergraduate students are 
exchanged with member institutions seeking minority students 
for graduate programs. Participating institutions include: 
Stanford, Harvard, Yale, Cornell, Princeton, the University of 
California at San Diego, the University of Illinois, Duke, the 
California Institute of Technology, the University of Maryland, 
the University of Chicago, Carnegie-Mellon, Brown, the 
University of California-Berkely, the University of California 
at Los Angeles, Columbia, Vanderbilt, Northwestern University, 
the University of Texas at Austin, and the University of 
Pennsylvania.
    The Faculty Internship Program places terminal year 
doctoral students into teaching internships at the University 
of New Hampshire, Hope College (Michigan), and Claremont 
Graduate University. The program is being expanded to include 
Oberlin and Elon Colleges, the University of Nebraska (Lincoln) 
and the University of Wisconsin (Madison). A similar program, 
Preparing Future Faculty, exposes graduate students to faculty 
life at the following institutions: Catholic University, 
Marymount College, Bowie State University, Virginia Polytechnic 
Institute and State University (Northern Virginia Center), 
Walden University in Minneapolis, and Syracuse University.
    In addition, the University recruits students who are 
interested in obtaining doctorates in the fields of science, 
mathematics and engineering through the Minority Graduate 
Education Program. Preference is given to graduates from 
partner institutions such as: Hampton University, Morehouse 
College, Spelman College, Bennett College, Bowie State 
University, Dillard University, Fisk University, Grambling 
State University, Morgan State University, St. Augustine's 
College, the University of Puerto Rico at Mayaguez, and Xavier 
University of Louisiana.

                        ARTICULATION AGREEMENTS

    Mr. Swygert. We do have a number of articulation agreements 
with other institutions. As a doctoral-granting institution 
ourselves, our emphasis historically has been on articulation 
agreements between 4-year institutions and Howard. We graduate, 
as indicated in my earlier testimony, more African-Americans 
receiving degrees in all fields than any other school in the 
Nation. What we want to do is strengthen our articulation and 
build upon what we have in place as well. But, if I may, I 
would like to supplement my remarks.
    Mr. Cunningham. Thank you, Doctor.
    One last little question. Some of us have learned a term, I 
think from the African-American language, you talk the talk and 
you walk the walk.
    Mr. Swygert. Yes, sir.

               AFRICAN-AMERICAN ENTREPRENEUR OPPORTUNITY

    Mr. Cunningham. You know that I had met a young African-
American entrepreneur that had a limousine service and a bus 
service. And when we talk about supporting minorities in jobs, 
to take these young people after they get out of school, it is 
always nice to have them with an equal opportunity to get a job 
and to compete for that job. I was a little disappointed, I was 
glad at the outcome, but I was a little disappointed it took so 
long working with Howard to get a young African-American 
entrepreneur. I never got a dime from him. I never got a free 
ride in his limo. But Isaw that here was a young man that was 
being wronged primarily because here is an African-American school that 
was afraid to hire an African-American who met all the qualifications. 
I would sure like to see the walk the walk in those kinds of endeavors. 
Here was a young man was professional, he worked 22 hours a day, and it 
took almost a year to go through that process. I just did it because 
here was a guy who was being wronged.
    Mr. Swygert. Congressman, we certainly appreciate your 
interest and your observations. We believe things have resolved 
themselves.
    Mr. Cunningham. They have. And I want to thank you, Dr. 
Swygert.
    Mr. Swygert. Thank you.
    Mr. Cunningham. Thank you, Mr. Chairman.
    Mr. Porter. Thank you, Mr. Cunningham.
    Mr. Jackson.
    Mr. Jackson. Thank you, Mr. Chairman, and thank you, 
President Swygert, for being here today. Let me first begin by 
offering an apology to the Chairman and to members of the 
committee as well as our distinguished witnesses for my attire. 
I picked up my little daughter this morning and patted her on 
the back----
    [Laughter.]
    Mr. Jackson. Before I knew it, the suit that I had planned 
on wearing was in route to the cleaners.

            INTERDISCIPLINARY SCIENCE AND ENGINEERING CENTER

    I want to begin by asking President Swygert a couple of 
questions. Howard University has been seeking additional 
funding for an Interdisciplinary Science and Engineering 
Center. I am hoping that you could please explain to the 
committee why you believe this is so important.
    Mr. Swygert. As I indicated, Congressman Jackson, in my 
testimony, we have reached a point where our ability to go 
forward with cross-disciplinary and interdisciplinary research 
is very, very much at risk.
    Secondly, the facilities that we have on campus today are 
aged and aging. The Physics and chemistry buildings, to name 
two buildings, were built in the 1930s. And with all of the 
retrofitting and all of the reconstruction in the world, I am 
really afraid, Mr. Jackson, if we drive one more nail in one 
more wall, we are going to lose some of those buildings. The 
faculty have struggled mightily in those facilities.
    Thirdly, through a history of careful and purposeful 
acquisition, we now have assembled in place the physical space 
that would accommodate such a center with no disruption of 
either private sector enterprise or any residents. We have the 
ground. And we have, I think, intrigued both private sector 
corporate personalities and the Government as well, who have 
become excited about this. We have been talking about it for 4 
years. Three years ago, the Chairman permitted me to speak to 
it. We think we have significantly refined this concept.
    So it has three components: One, to address our ongoing 
needs of the University in terms of new facilities; secondly, 
to give us the opportunity to continue the great start that Dr. 
Dunston and her colleagues have made; and thirdly, a marvelous 
service opportunity for the national community.
    Mr. Jackson. Let me once again welcome Dr. Dunston to our 
committee, and thank you, Dr. Swygert, for bringing Dr. Dunston 
before us. Her work with Dr. Collins in the study of the human 
genome precedes her and she is quite a scholar in her field.

        MINORITY RESEARCH AT NATIONAL INSTITUTES OF HEALTH (NIH)

    That kind of brings me to my next point, and maybe Dr. 
Dunston is the most appropriate person to try and respond to 
this. During a series of hearings at the National Institutes of 
Health, I asked former NIH Director Dr. Harold Varmus and 
Acting Director Kirschstein if they felt that elevating the 
Office of Research on Minority Health to a center would improve 
the coordination of research on illnesses that 
disproportionately affect minorities.
    I am interested, one, in how you feel about that, but I am 
also interested in your view, as a professional researcher and 
as a leader in your field, particularly in the study of the 
human genome, how NIH is fundamentally viewed by minority 
researchers throughout our country.

                           PEER REVIEW SYSTEM

    Dr. Dunston. Addressing first the last question. I would 
want to first separate NIH as an institution from the 
scientific community in terms of minority views of NIH. I 
certainly think it is fair to say that the perception of the 
scientific community as reflected in the peer review system has 
not allowed for the full utilization and development of talents 
at those universities and schools that have not been as 
successful in the peer review system as others.
    So I think the perception that science at, if I might say 
it, Historically Black schools, because of the history of 
science in our society, has compromised to some extent the 
first level in getting into the NIH system, which is the level 
that determines as we call it RO1, or independent investigator 
supported research. And this is a level that has compromised 
the progression into the system. NIH utilizes this system and, 
therefore, this factor of peer perception of research simply 
because of the history and the development of research and of 
science in our society comes into play.

           INCREASING MINORITY SCIENTISTS' INVOLVEMENT AT NIH

    Now with regard to the specific initiative to address the 
question of disease disparities especially among ethnic 
minorities and how we begin to mobilize the national resources 
and talents of the NIH and others to address this. I certainly 
would have to say that any effort that is going to enhance the 
need here would be welcome. We obviously have to look at the 
different strategies and learn from the experiences of the past 
in terms of efforts that have been made to mandate the 
involvement of minorities. Unfortunately, many times these 
efforts get labelled and stigmatized as not quite the quality 
of mainstream science. That has had a negative impact on the 
consideration of both the investigators and the science.
    Mr. Jackson. Let me interrupt if I can, Dr. Dunston, 
because I want to get another question in before the Chairman's 
notorious bell goes off.

           MINORITY RESEARCHERS AND INSTITUTIONS STIGMATIZED

    I do want to pick up on that point that you're making right 
there. When you say the stigma associated with these 
institutions and with minority researchers, could you be a 
little bit more specific for the committee.
    Dr. Dunston. I refer to, again, as I would say, the 
perception of the quality of science and scientists at schools 
that do not have the established track record in the NIH system 
for the award of what is considered the creme de la creme type 
of grant applications; namely, the RO1s. And those awards are 
made through this dual review system that begins with peer 
review. And so the question of peers also has been a subject of 
consideration at NIH.
    So the stigma that I mean is not being in the system 
because of the nature of how science gets reviewed, and not 
having the history, and the work not being recognized 
itselfcomplicates getting in the system. And the idea that minority 
schools are not doing top-of-the-line mainstream research, and the idea 
of many programs to bring the scientists and the science into the 
mainstream sets up the perception that the science and the scientists 
are not in that mainstream. And so when you are reviewing applications, 
and I have had the opportunity to serve on review committees, there is 
almost an unconscious expectation that it is not up to the highest 
level. This is a perception that goes with the science.
    Unfortunately, for an application coming from a minority 
school--just the fact that it is coming from a minority school, 
where the reviewers are less familiar with the scientists, less 
familiar with the institution, where there is no established 
track record--the rigor and the questions and the credibility 
are not the same as for an application that could be the same 
science, in fact, the same scientist, coming from a mainline 
university. There are certain credits given to that application 
that you do not experience.
    For example, just very quickly, an investigator at Howard 
submitted a paper to a mainline journal. It was rejected. That 
person relocated to another university, submitted the same 
paper with no changes in text, and it was accepted. Perceptions 
of the scientists in the science community itself have some 
impact on even progressing through the system.
    Mr. Jackson. Thank you very much for your testimony. It was 
enlightening and helpful.
    Thank you, Mr. Chairman.
    Mr. Porter. We will have a second round, Mr. Jackson.
    Mr. Jackson. Thank you, Mr. Chairman, I look forward to it.
    Mr. Porter. Dr. Dunston, am I correct, this is at kind of 
two levels? The first level is if you are not one of the major 
players, even if you are not a minority institution, you have 
to break into the ranks. And then you are saying, in addition 
to that, being a minority institution sort of leaves you 
outside that elite group that gets a better look. Is that a 
fair depiction of it?
    Mr. Dunston. I think that is fair.

            ADEQUACY OF PRESIDENT'S FISCAL YEAR 2001 REQUEST

    Mr. Porter. Okay. Now I have to ask Dr. Swygert all the 
tough questions here. The first tough question is, do you 
believe the President's request for Howard University is 
adequate?
    Mr. Swygert. Mr. Chairman, we appreciate the President's 
budget mark, but we had requested $242,000,000, and the 
President is slightly shy of that with $224,000,000. But we do 
appreciate the support reflected in the President's budget.
    Mr. Porter. They have the digits in the wrong order here.
    Mr. Swygert. Yes, sir.
    Mr. Porter. That was your request to OMB, $242,000,000?
    Mr. Swygert. Yes, sir.
    Mr. Porter. And are there any new initiatives you were 
considering undertaking with the $242,000,000 that are not 
going to be able to be accomplished if it is $224,000,000?
    Mr. Swygert. There will be initiatives that will be very 
difficult to make real, Mr. Chairman. We have our ongoing 
issues, of course, of continuing the wiring of our campus to 
make it a modern campus, as modern as determined by this 
millennium, as an example, Mr. Chairman. We propose to wire all 
of our residence halls. As you know, Mr. Chairman, 3 years ago 
we distributed computing resources to all of our faculty. Those 
computing resources are now a generation old for the most part. 
We have, of course, investments in laboratories as well that 
are desperately needed. And then we have the usual costs of 
personnel administration. But it will be a very difficult 
fiscal year 2001, Mr. Chairman, very difficult.

                     UNIVERSITY PERFORMANCE TARGETS

    Mr. Porter. My understanding of the rate of increase is at 
2.1 percent, which in my judgment is under the rate of 
inflation. I am not sure why OMB or the White House chose to do 
that. But if we look at your performance targets, my 
understanding is that you are exceeding them in almost every 
area. Your average SAT scores are up, your attrition rate is 
down, your graduation rates are up, the funds from private 
sources and endowment are up. I think you should be 
congratulated and rewarded on your accomplishments, very 
frankly.
    Mr. Swygert. Mr. Chairman, thank you very much. As you 
know, Mr. Chairman, I made a number of commitments to you and 
the members of the committee when first we met 5 years ago. I 
have tried to maintain fidelity to those commitments.

                 GOVERNMENT PERFORMANCE AND RESULTS ACT

    One of the reasons we so look forward to our annual hearing 
before the committee is to give you an opportunity to see our 
report card. And the GPRA report I think speaks to the success 
that we have enjoyed. But it has been hard fought and it is 
fragile, Mr. Chairman. Without continued support, and we hope 
closer to our request to OMB, it is going to be difficult to 
sustain it.
    Mr. Porter. What you are going to have to do, because you 
have been so successful, is to reform your performance targets 
to higher levels now because you have done so well in exceeding 
the ones that you set.
    Mr. Swygert. We are negotiating with the Department of 
Education, Mr. Chairman, on a new set of targets.

                             ALUMNI GIVING

    Mr. Porter. Let's talk a minute about alumni giving. One of 
the performance indicators that you did not meet this year was 
the participation rate of alumni who contribute to the school 
that you hoped would increase and targeted for increase. It 
looks like it is down from 11.4 to 9.4 percent between 1998 and 
1999.
    This economy has been good. Why is that rate falling in a 
time of rising economy, do you know?
    Mr. Swygert. We are very disappointed with that result, Mr. 
Chairman. As you indicated, that is one of the very few areas 
in which we have not been as successful in reaching the target 
that we set for ourselves. We believe there are two factors 
involved in that decline. The first is a matter of execution. 
As you know, we have been the beneficiary of some 
extraordinarily positive developments at the University, a 
Rhodes Scholar and so many other things.
    Solicitation without execution, however, simply does not 
work. On the execution side, the computer systems, the staffing 
of those systems, the solicitation, the actual solicitation and 
recordkeeping itself was not where we wanted it to be. We have 
increased by almost threefold the number of staff devoted to 
fund raising and alumni relations. We have a director in each 
of our schools and colleges. And I am prepared to assure the 
committee today that we will be closer to the mark this time 
next year than we are today.
    Mr. Porter. This is a whole new structure for you that you 
are pursuing.
    Mr. Swygert. Yes, sir.
    Mr. Porter. I like the way you do things. You take a 
problem on frontally and, if it is not performing the way it 
should, you make the changes to make it do better.
    Mr. Swygert. Thank you, sir.

       DISEASES THAT DISPROPORTIONATELY AFFECT AFRICAN-AMERICANS

    Mr. Porter. Dr. Dunston, you mentioned I think, and I want 
to be accurate in this, that there were significant differences 
in the African-American population to susceptibility to certain 
diseases and, if we asked, you would tell us why. Would you 
like to tell us why?
    Dr. Dunston. I think the statistics are very clear that 
there are clear differences in the prevalence or incidence of a 
number of common diseases--hypertension, diabetes--in African-
Americans. There are those, of course, that realize that 
environmental factors are certainly a factor here. These are 
what we call complex diseases, they involve genetics and 
environmental factors and their interaction. The focus of the 
Genome Center is to identify the contribution that biology is 
making in this disparity that we see. It is an important part 
and it needs to be clearly defined.

                AFRICAN POPULATION AND THE HUMAN GENOME

    African-Americans, as a population, are unique at the 
genetic level because of our history in this country and our 
relationship to the African continent. I can very shortly say 
it is very clear that African populations are the oldest human 
populations, and that very age itself means that the genome, 
which is the living legacy of the biological history of 
humankind, the genome is the oldest. A characteristic of age is 
variation, because what the genome has is variation over time. 
So in terms of variation, a number of renowned investigators 
have documented that African populations are the oldest and 
this is borne out by greater variation at the genome level.
    African-Americans, because of their history in this 
country, have a 26 percent admixture with European populations 
and admixture with Native Americans. We can look at European 
populations as a young population from human history 
perspective, and African populations as an old population. And 
the very admixture of the old with the new actually produces a 
resource for population study where variation is truly the 
instrument through which we discern the patterns that makes the 
population unique. This is recognized by scientists and there 
are any number of investigators that are constantly wanting to 
collaborate because of the uniqueness of the resource for the 
very level of analysis that the Genome Project has now reached.
    There is no other population that brings together in one 
unit the variation that is characteristic of African-Americans 
to be used as a tool to answer the very questions that are now 
on the table. Variation represents the eyes through which we 
see the patterns. It was variation that allowed us to map the 
genome, and it will be variation that will allow us to find 
those hundred thousand genes for the common diseases.
    So it is the combination of the presence of the disease in 
the population and the unique attribute of the genome of the 
population by virtue of its history that come together and make 
it truly the most comprehensive population for answering the 
questions that are on the table.
    Mr. Porter. Dr. Dunston, I am glad you are working on this 
because there is so much hope to find the key to the diseases 
and why they cannot be solved as easily with some populations 
as with others. I think the Genome Project is going to, with 
your work and the work of others, is going to eventually unlock 
those keys; we are going to find those answers and we are going 
to give people hope that have not had hope before.
    Mr. Swygert. Mr. Chairman, if I may.
    Mr. Porter. President Swygert?

                    HOWARD UNIVERSITY CANCER CENTER

    Mr. Swygert. Mr. Chairman, I cannot speak with the 
eloquence and the passion of Dr. Dunston to the Human Genome 
Project, but I can speak to, and I would like to put on the 
record, to the University's deep appreciation for your many, 
many, many years of support of the Cancer Center at the 
University and to let you know that there, too, though the 
thrust is a multipurpose thrust, both the research and also the 
clinical aspects of our Cancer Center, we want to thank you so 
much for what you and the committee have done to sustain that 
Cancer Center over time. I just wanted to add that to the 
record.
    Mr. Porter. Well, you are very generous and kind to say 
that. We need to give you the resources you need to do your job 
and to continue to do it better, and that is our job.
    Mr. Jackson?

                    FUNDING FOR UNIVERSITY RESEARCH

    Mr. Jackson. Thank you, Mr. Chairman. And let me associate 
myself with your remarks on the resource question. I have asked 
the gentleman to my right to redisplay, now that the Chairman 
is present, and I missed it as well, Mr. Chairman, Exhibit 7, 
which shows the total value of Howard University and their 
research productivity and resources that I guess have been 
either appropriated or raised over time for research 
productivity. And while we see an increase in the productivity 
of the researchers at Howard University, we also note that 
there is a significant decline in the amount of money available 
for the purposes of advancing that research.
    NIH's budget, for example, has increased from 
$11,300,000,000 in 1995 to $17,800,000,000 in 2000, an increase 
of $6,500,000,000, or 57 percent. Now I do recognize that the 
money, based on this chart that we are looking at, for research 
purposes is not a full appropriation or representative of an 
appropriation from this committee but is a compilation of 
various grants that you have received for the purposes of 
research.
    I want to ask, Dr. Swygert, and hopefully you can give me a 
very brief answer because I have a number of questions I would 
like to continue to ask Dr. Dunston, have you experienced a 57-
percent increase in awards from the traditional expected amount 
of research awards that you receive in any of your research 
institutes from the NIH?
    Mr. Swygert. No, sir.
    Mr. Jackson. Are you saying that the committee's efforts to 
increase, and it is our goal to double the budget of the 
National Institutes of Health, that the committee's efforts to 
double the budget at the National Institutes of Health are not 
necessarily manifesting themselves in a doubling of awards in 
light of the brilliance and eloquence that we have heard from 
Dr. Dunston today?
    Mr. Swygert. Well, to the extent, Mr. Jackson, that it 
reflects itself in awards to the University, no.
    Mr. Jackson. Thank you.

                   UNIVERSITY'S RELATIONSHIP WITH NIH

    Let me then ask Dr. Dunston a number of questions. Can you 
comment on your relationship with the National Institutes of 
Health's Institute on the Human Genome, what relationship you 
have with representatives of that organization.
    Dr. Dunston. We have two major collaborations. One, an 
international collaboration, the Africa-America Diabetes 
Mellitus Project, and second, the African-American hereditary 
prostate cancer study which is a national project.

                     VARIATIONS OF THE HUMAN GENOME

    Mr. Jackson. Let me ask in furtherance of my own inquiry,in 
light of what I felt was very eloquent testimony about the variations 
of the Human Genome and how those variations are determined in aged 
populations, particularly those who have been here much longer than 
other populations, and from those variations, that is comparisons 
between Africans and Europeans and others, you are able to begin the 
mapping and sequencing process, it would appear to me then that the 
aged population would be the center of the Human Genome study from 
which all other variations are determined. Is that safe to say? Or is 
that reasonable within scientific certainty to say?
    Mr. Swygert. To the extent that anything is certain within 
scientific inquiry.
    Dr. Dunston. It certainly is an important part of the 
puzzle.
    Mr. Jackson. I would imagine then that the study of the 
Human Genome at the National Institutes of Health would not see 
the issue of health disparities as a subset of their study, but 
should see the study of African-Americans, in light of the 
variations and the research that you have presented before this 
committee, as central to mapping and sequencing of the Human 
Genome. Is that safe to say?
    Dr. Dunston. It is certainly safe to say that the National 
Human Genome Research Institute recognizes the importance of 
variation in the genome as a key factor in completing the 
project, as reflected in the recent formation of groups to look 
at variation and use this as a tool for sequencing.

                   AFRICAN-AMERICAN RESEARCH BARRIERS

    Mr. Jackson. How many African-American researchers, and I 
would imagine, I have no idea, who study the Human Genome, I 
would imagine this is not a very large population of people. Is 
that safe to say, Dr. Dunston?
    Dr. Dunston. There are a number of people that probably 
work in laboratories and so they would certainly consider 
themselves working on these aspects. But in terms of leadership 
position, not----
    Mr. Jackson. Generally, would you then tend to agree that 
they would probably share your view of the RO1, I think you 
referred to it, and the peer review process at NIH as 
fundamentally challenging for their efforts in advancing the 
science and study of the Human Genome? I can try and rephrase 
it.
    Dr. Dunston. Please. I am not quite sure----
    Mr. Jackson. Earlier you said in your testimony that you 
had a researcher at Howard University who submitted a paper, he 
then went to another university and submitted the exact same 
paper and that paper was accepted. I assume then that that 
researcher and similarly situated researchers have had, I would 
imagine, these perception problems. That is, if they submit 
their paper by way of another channel, another vehicle, they 
indeed might get heard.

                    FUNDING FOR UNIVERSITY RESEARCH

    I guess my question for you is--and by the way, this is 
totally unrelated to Howard, but in the final analysis it is 
related to Howard because I have been trying to increase your 
research money. But I have to go through these questions in 
order to get the end result; that is, more research dollars for 
Howard University and similarly situated researchers.
    I guess I am asking, do researchers who happen to be 
minority, would you say that the comments you have made about 
this peer review process and the perception that minority 
universities do not get the grants, and that their papers being 
submitted by other universities could also be a factor in 
discouraging them from even conducting basic research at 
universities like Howard and other universities around the 
country?
    Dr. Dunston. Let me just say that I think that because we 
all kind of come through the same system, we all have respect 
for science and the quality of science, thus the effort of the 
review process. And I would say it is not so much the minority 
status as it is unfamiliarity of those who sit in the review 
process with investigators. That would be true whether it was a 
minority or not.
    But I want to say just for the record that the team of 
investigators that we have brought together now at Howard 
University to address this problem is top-flight across any 
review system. We have now, just as recently as yesterday, put 
forth our application that is pure science.
    Mr. Jackson. I appreciate that. If I can, Mr. Chairman, 
this will just be quick. The Chairman has been very indulgent 
in light of my inquiry across the entire National Institutes of 
Health.
    I am really offended to even ask you this question. Some of 
my colleagues who are not present today, every time I raised 
these kinds of questions, often associated the questions that I 
was raising with promoting substandard research. You are making 
it absolutely clear that substandard research is not the issue 
here.
    Dr. Dunston. Right.
    Mr. Jackson. We are talking about pure science.
    Dr. Dunston. Right. Right.
    Mr. Jackson. Okay. I thank you, Mr. Chairman.
    Mr. Porter. Thank you, Mr. Jackson.
    Howard receives grants from the NIH, correct?
    Dr. Dunston. Yes.
    Mr. Porter. And those have been peer reviewed as good 
science, right?
    Dr. Dunston. Yes.

                        MAPPING THE HUMAN GENOME

    Mr. Porter. Exactly. Also, am I correct, Dr. Dunston, and 
we are off the subject a little bit, although it is an 
important subject that the gentleman from Illinois has raised 
repeatedly, and I respect that, my understanding of what the 
Human Genome Research Institute is doing right now in mapping 
the Human Genome is they are dealing with the DNA of one 
individual. Is that wrong?
    Dr. Dunston. Yes.
    Mr. Porter. I thought they were doing one individual--how 
do you otherwise make the map if you do not deal with a single 
bit of DNA?
    Dr. Dunston. I can say that the process that is being used 
has called for volunteers who are participating in the 
establishment of the sequence.
    Mr. Porter. In parts of it?
    Dr. Dunston. And different laboratories are working with 
DNAs collected from different individuals. But it is not going 
to be the sequence from one individual.
    Mr. Porter. But what we are trying to do is to find what a 
so-called normal human being would be, and then find the places 
where there are discrepancies or differences that might lead to 
disease?
    Dr. Dunston. A representative sequence. And there are 
places along the map where variation is used to zip that 
information together. Populations will vary in the frequency of 
that sequence at given points.
    Mr. Porter. Right.
    Dr. Dunston. And if you are using that point to try to 
find, say, a gene, what specific sequence an individual would 
have can influence how informative a given sequence will be. 
All populations would have the same map, but it is positions 
along the map that are used to define where you are that will 
vary among populations.
    Mr. Porter. Are you going to have a difference between 
males and females, for example, on the genetic map? One place 
at least, right?
    Dr. Dunston. Yes. Major chromosome, yes.
    Mr. Swygert. Mr. Chairman, if I may, with your indulgence 
and the committee's indulgence, I wonder if I could ask Dr. 
Dunston to take just a minute, 60 seconds, and share with the 
committee, which we will supplement in the record if we may, 
the work that she is doing with African-based populations, 
which I think may speak to the issue.

                         HUMAN GENOME VARIATION

    Dr. Dunston. We can take advantage of the fact that 
actually the diseases occur frequently in population just to 
enrich the chances of seeing the variation that you are trying 
to identify. And we are using the variation in African-
Americans to help find and locate genes of interest.
    We are collaborating with the Genome Institute in this 
regard as it relates to prostate cancer. Black men have the 
highest incidence of prostate cancer in the world. We can use 
this fact to enrich for whatever it is at the gene level that 
is involved here, and that is the search that we are engaged 
in.
    Mr. Porter. You may find a letter out of sequence and then 
you may find environmental factors that may lead to that defect 
being triggered and causing the disease in black men. Correct?
    Dr. Dunston. Right. But let me hasten to say for the record 
that the genome does not parallel what we call the phenotype, 
what you see. There are no genetics that are aligned with 
Blacks, whites, Asians, what have you. We are moving now from 
trying to define populations based on what we see, which we 
know now is less than 1 percent of the genetic information.
    At the genome level, we are looking for those patterns that 
correlate with disease. So it is just the fact that a given 
disease occurs in a high frequency that gives you an enrichment 
for what you are looking for. But that same sequence could be 
found in any other group with that disease once you locate it.
    Mr. Porter. Right.
    Dr. Dunston. So it is enriching for what the genetics can 
tell us about what we see at the phenotype level.
    Mr. Porter. Thank you, Dr. Dunston.

                           STUDENT RETENTION

    I have got to ask Dr. Swygert some of the tough questions 
about Howard generally. Student retention has been a problem in 
the past. Can you tell us what you have done here to improve 
student retention? And another problem, Dr. Swygert, has been 
advanced degrees. We for several years have been concerned that 
the graduation rates for African-Americans for advanced degrees 
has been declining, particularly in the field of engineering. 
Can you tell us about what is happening there?
    Mr. Swygert. Yes, sir. Thank you, Mr. Chairman. In terms of 
retention, we have instituted a number of strategies which are 
already beginning to pay off. Several years ago, we initiated 
the mid-term status reporting system to identify all 
undergraduate students who were not performing at satisfactory 
levels and to provide them with immediate academic support to 
improve their performance. Now prior to the institution of this 
system, the mid-term status report was given only to students 
who had grades of D or F at the mid-point of the semester. Now 
all students are given a mid-term assessment of their 
performance. We think this has been very helpful. We have 
instituted this strategy as a best practice following some 
support we received from the Pew Charitable Trust to develop 
and enhance retention.

                    ADVANCED DEGREE GRADUATION RATES

    As to the retention and graduation of masters and doctoral 
level students, we have used our own resources, Mr. Chairman, 
supplemented by a grant from the Lily Foundation, to support 
two programs. One program in particular, Mr. Chairman, the 
Frederick Douglas Scholars Program, is a program where we have 
sought to recruit the best and brightest students, primarily 
from the Historically Black Colleges and Universities, to bring 
them to Howard for their Ph.Ds., their doctoral level work. 
This is the first full year of the Frederick Douglas Scholars 
Program, next year will be our second cohort. We are very, very 
excited about this program.
    I earlier referred to the Future Faculty Fellows Program. 
This is a program where we are largely using our own monies, 
with some support from outside foundations, to recruit at the 
doctoral level again African-Americans who are interested in 
joining the professoriate, which, as you know, is one of the 
great challenges we are facing right now in all of higher 
education. We have had some good success there. This is the 
fourth cohort, Mr. Chairman, of that program. I would like to 
supplement both of those comments, if I may, in the record.

                 MINORITY ENGINEERING GRADUATION RATES

    As to engineering, in engineering, Mr. Chairman, we are 
observing a national phenomenon and Howard is certainly a part 
of it. If you look broadly, you will discern that in 
engineering, whether it is chemical, mechanical, or electrical, 
there would appear to be nationally either a flattening out of 
minority participation or a decline, which is very distressing. 
One explanation is that some portion ofthis engineering 
population has segued into computational sciences. I would like, again, 
Mr. Chairman, to supplement my response because I want to drill a 
little deeper in, one, our own numbers, and secondly, drill a little 
deeper into some of the national statistics that are available to us.
    [The information provided:]

                 Minority Engineering Graduation Rates

    According to the National Action Council for Minorities in 
Engineering, freshman enrollment of minorities in engineering 
programs has dropped 8.2 percent from its peak in 1997-98. 
African American enrollment is down nearly 10 percent, a 
decline due primarily to the fact that only 6 percent of 
African-American high school students graduate with the 
necessary prerequisites in mathematics and science courses 
required for admission to engineering programs. This is a 
matter of great concern because the size of our undergraduate 
pool determines the extent of our graduate enrollment and 
subsequent degree production. The Council also attributes this 
decline to the persistent lack of adequate financial resources 
that African American students and their families need to 
complete their studies.
    It is interesting to note that production of engineering 
graduates remains concentrated in just 10 percent of 
engineering institutions. Indeed, six out of the top ten 
institutions graduating minority engineers in 1996-97 were 
Historically Black Colleges and Universities or members of the 
Hispanic Association of Colleges and Universities.
    Howard University is committed to a reversal of these 
trends. Already we have significantly increased our activities 
at the local high school level, and boosted the number and 
amounts of scholarship awards and financial aid services to our 
graduate students. We are conducting studies and analyses to 
track graduate degree completion trends; and we are 
strengthening collaborative efforts with private scientific and 
engineering enterprises.

    Mr. Porter. Mr. Jackson, do you have further questions?
    Mr. Jackson. I have no further questions.
    I want to thank Dr. Swygert for being here.
    Mr. Swygert. Thank you, sir.
    Mr. Jackson. As usual, he brings a very impressive 
professor or a very impressive student from Howard University, 
and I want to congratulate you on the outstanding work that you 
are all doing. Hopefully, Dr. Dunston, you might be willing to 
serve as a resource on some other issues that are very 
important before this committee.
    Thank you very much, Mr. Chairman.
    Mr. Porter. Thank you, Mr. Jackson.

                       FACULTY SALARY COMPRESSION

    Can you tell us about the faculty salary compression 
initiative? What is salary compression?
    Mr. Swygert. Mr. Chairman, thank you so much for raising 
that question. Mr. Chairman, faculty compression refers to that 
phenomenon that one sees, and we see it on our campus, indeed, 
where faculty, largely as a function of when they were hired, 
find themselves in a salary setting that is severely out of 
place, relative both to new hires and with peers at other 
institutions. I will give you an example.
    If you were hired 10 years ago at Howard University in 
virtually any discipline, the market, if you will, was very 
different than it is today. What we find today in discreet 
disciplines, engineering being one of them, Mr. Chairman, and 
also computer sciences, is that full-time faculty recruitment 
at the university level is a great challenge, and it is a very 
expensive proposition. You find when you recruit new faculty, 
oftentimes, there is a disconnect between the new faculty 
salary and the salary of faculty who have been in grade and in 
rank for a number of years. But for when they were hired, their 
salaries have been compressed, if you will, relative to both 
peers in many instances and, secondly, relative to new hires. 
It has a terrible effect on morale.
    Two years ago, the committee was very, very generous and we 
so deeply appreciate the committee providing us with the 
resources that enabled us to make across-the-board salary 
adjustments at the assistant, associate, and the full professor 
ranks relative to our peers. We define our peers for these 
purposes as Georgetown, University of Maryland, College Park, 
and Vanderbilt because of their size, because they are in the 
northeastern part of the United States and relatively have the 
same cost of living issues and indices, and also because they 
are all universities, and we are a university with pretty much 
the same array of complexities and programs.
    We have made some terrific progress. I suspect if Dr. 
Dunston spoke to this as a member of the faculty, she might 
think we have made some progress, the ``terrific part'' she 
might have some issues with. But we remain sensitive and I 
think we are moving in the right direction.
    Mr. Porter. This is really a salary decompression 
initiative, in other words.
    Mr. Swygert. Yes, sir, exactly right.
    Mr. Porter. Dr. Dunston has such a reputation and her work 
is so important, we had better give you enough resources to 
keep her happy. Well, maybe what we should do is send her to 
see President Clinton. [Laughter.]
    Mr. Swygert. That is not a bad idea.

                    NIH SUPPORT OF HOWARD UNIVERSITY

    Mr. Chairman, as you may recall, I am sure you do, two 
years ago I introduced Dr. Dunston to you by name and we talked 
about some of the conversations we were having at NIH, Mr. 
Jackson, with Dr. Collins. And I think the record should 
reflect that Dr. Collins has been a great champion of ours and 
has been very supportive and I know is a very close 
professional colleague of Dr. Dunston. I do think the record 
should reflect that Dr. Collins has been a champion of Howard 
University.

                     FUNDING THE HUMAN GENOME TEAM

    Dr. Dunston. Mr. Chairman, if I might just make a quick 
statement about the team again and mention names. I just want 
to say, it is so critical, our success at this point in 
bringing this team together is going to depend on Howard's 
capacity to provide the resources that we need in order 
to,through science, move to the next level. The kind of resources the 
President has discussed are absolutely essential to maintain the 
science that we have brought together in terms of the people. I 
certainly hope that the committee will----
    Mr. Jackson. Mr. Chairman, if I could just interject.
    Mr. Porter. Yes, Mr. Jackson?
    Mr. Jackson. I am sorry, Mr. Chairman.
    I just want to make this point about the team that you have 
put together and this resource question. If consistent with the 
paper that was published but could not get a grant from one of 
our institutes but could get a grant at another institute, is 
there pressure amongst researchers if, in fact, they are unable 
to get these grants to break up the team?
    Dr. Dunston. Let me correct the statement. I did not say 
that he did not get support from the Institute. I said a paper. 
This was to a journal. This was a mainline journal.
    Mr. Porter. A refereed journal.
    Dr. Dunston. A refereed journal. It was not with regard to 
a grant application.
    Mr. Jackson. Okay. I am sorry.
    Dr. Dunston. I know, I am confident that, as I say, this 
team, the science will stand that process that I told you 
about. But we have to have it matched with resources at Howard 
to allow these investigators that we have brought from top-line 
universities and who have come because of the opportunity to 
study this population.
    Mr. Jackson. But at the same time, Dr. Dunston, if the 
grants do not come and the awards do not come, there is a 
tremendous amount of pressure on whether or not the team can 
stay together, is that a factor? I would imagine that if you 
can get the grants or awards elsewhere, you would tend to go 
file your paper at some other university.
    Dr. Dunston. I just want to make it clear that the grants 
will come because the science is tight.
    Mr. Jackson. Okay. Thank you very much, Dr. Dunston.

            INCREASING MINORITY ADVANCED DEGREES IN SCIENCE

    Mr. Porter. Let me add one other thing that we have talked 
about repeatedly, and that is the need to attract minorities to 
advanced degrees in science so that they can be inspired to be 
a part of this team into the future. I think the very fact that 
Dr. Dunston has such a brilliant reputation is going to attract 
young people to science careers and that will increase the 
chances that minorities will have the grants. That is another 
part of this equation, it is the other part that you need to 
have. We need to have more young people getting the degrees 
that prepare them for the careers in science that you are 
pursing.
    Mr. Swygert. Congressman, I think you touch upon a 
terribly, terribly important and oftentimes overlooked point. 
If you do not have the population of first class researchers, 
then, you will pardon my expression, everything is academic, 
because you simply will not have the community that is 
investigating or likely to investigate, or, competent to submit 
to peer review, as described.
    If I may, Congressman Jackson, your point, as well, is 
well-taken. If you cannot show success, then it is very 
difficult to encourage young scientists to participate.
    Mr. Jackson. I want to make my position very clear also, 
Dr. Swygert, that this committee appropriates $18,000,000,000 a 
year to the largest research institution in the history of the 
planet and less than 1 percent of 1 percent, according to a 
number of studies, have gone to minority researchers. So there 
is a significant amount of concern as to whether or not the 
incentive to even enter research is available, and whether or 
not the peer review process that Dr. Dunston has witnessed is 
helping good science or whether it is discouraging good 
scientists from going into science because if, in fact, they 
choose to do passionate research on a number of subject matters 
that are very important to us, if in fact they are discouraged 
from doing it because they cannot get a grant because they are 
at Howard University or North Carolina A&T, where I graduated, 
and somehow they have got to go to Stanford or they have got to 
go to Harvard in order to get the grant, I would imagine that 
would significantly discourage them from doing the outstanding 
work that you are doing at Howard.
    Mr. Swygert. Precisely.
    Mr. Jackson. So I thank you very much for your testimony.
    Mr. Porter. President Swygert, Dr. Dunston, Dr. Prieto, 
thank you. It has been a very good hearing I think. You are 
making great progress. We hope to do our very best--we do not 
know what we are going to have to work with yet, but we hope to 
do our very best to provide you the resources that you need.
    Mr. Swygert. Again, Mr. Chairman, thank you so much for not 
simply your support, but indeed your leadership and inspiration 
over these many years. Thank you.
    Mr. Porter. Thank you, Dr. Swygert.
    The subcommittee will stand in recess for this vote.
                                          Thursday, March 16, 2000.

                          GALLAUDET UNIVERSITY

                               WITNESSES

I. KING JORDAN, PRESIDENT, GALLAUDET UNIVERSITY
JUDITH E. HEUMANN, ASSISTANT SECRETARY, SPECIAL EDUCATION AND 
    REHABILITATIVE SERVICES, U.S. DEPARTMENT OF EDUCATION
CAROL A. CICHOWSKI, DIRECTOR, DIVISION OF SPECIAL EDUCATION, 
    REHABILITATION, AND RESEARCH ANALYSIS, BUDGET SERVICE
RAMON F. RODRIGUEZ, LIAISON OFFICER, OFFICE OF SPECIAL INSTITUTIONS, 
    OFFICE OF SPECIAL EDUCATION AND REHABILITATIVE SERVICES
    Mr. Porter. The subcommittee will come to order.
    We continue our hearings on the budget for the Department 
of Education with the Special Institutions for the Disabled. We 
are pleased to welcome Dr. I. King Jordan, the President of 
Gallaudet University, and Judith E. Heumann, the Assistant 
Secretary for the Office of Special Education and 
Rehabilitative Services.
    You have been very, very patient and we apologize for the 
votes. This is saying we are standing in recess, thank 
goodness, so we will not be interrupted with another vote.
    Dr. Jordan, why don't you proceed right away with your 
statement, and then we will have time for some questions I 
hope.

                   Opening Statement--I. King Jordan

    Dr. Jordan. Good morning, Mr. Chairman, and thank you very 
much. I am pleased once again to appear before you to represent 
Gallaudet University. I personally have to tell you I am very 
saddened to know this is the last time that I will sit and 
testify before you. You have been a very good friend of the 
University and of deaf people. Next year, it is going to be a 
very different hearing for me. We will miss your support and 
your friendship. And on behalf of Gallaudet University, I wish 
you the very best as you go back to the private sector.
    The University and the U.S. Congress have worked together 
for over 136 years, and I think this is an excellent example of 
a good private-public partnership. Congress was very wise in 
1864 when they established Gallaudet as a private institution 
governed by its own board. For 136 continuous years, Congress 
has been very generous, and Gallaudet will continue to work 
very hard to earn that support and generosity from the 
Congress.
    It is good for me to follow Howard University as I testify 
this morning. I enjoyed sitting and watching and recognizing 
that Howard University and Gallaudet University are the two 
national universities for special populations. In the early 
1860s, Congress established the Land Grant Act that established 
colleges in States around the country, and shortly after that 
established Gallaudet and then Howard University as two special 
institutions. They recognized at the time that the States would 
not serve the needs of these special populations. Now, as we 
enter the 21st century, I am happy to know that Congress still 
recognizes that these special populations deserve continued 
support.
    I am always grateful to have the opportunity to share with 
you the achievements of individuals who are deaf that are made 
possible by Gallaudet University and the education they receive 
there. Let me talk briefly about the progress we are making in 
our ongoing strategic planning process at Gallaudet.

                 GOVERNMENT PERFORMANCE AND RESULTS ACT

    The Government Performance and Results Act (GPRA) has been 
a very big help in that progress. Our internal strategic 
planning process is very closely aligned with GPRA. We have 
initiated new data collection efforts and upgraded existing 
efforts to help with our tracking, reporting of, and planning 
for student achievements. As an aside, much more is possible 
now in tracking and following student achievement because of 
our integrated information management system. That system was 
supported by a special appropriation by this committee, and I 
am grateful for that.
    Gallaudet's strategic plan helps us focus on three main 
objectives: student academic and career achievement, setting 
the standard for best practices, and a sustainable resource 
base.

                         ADVANCES IN TECHNOLOGY

    We recognize that we must increase the number of students 
who graduate from Gallaudet. We know very well the value of a 
Gallaudet diploma, so we are working on several different 
fronts to achieve that. One approach obviously has been working 
with technology in educating deaf students. No single 
development has leveled the playing field for deaf people like 
advances in technology. When you are sitting reading text on a 
computer or entering text on a keyboard, it really does not 
matter if you can hear or not. Therefore, students really do 
have equal opportunity when they have access to technology.
    We must assure that we use technology to the fullest 
possible advantage. Students must use it to learn. Students 
must be skilled in its use. And students must be involved in 
the development of new technologies. Last year, Gallaudet 
invested about $4,000,000 in technology. With our plans to move 
toward a new high-tech student academic center, we will make 
even larger investments in the future. The key word here is 
``investments.'' What we spend to stay ahead of the curve in 
technology will pay big dividends in the lives of our graduates 
and in the lives of deaf people.

                          STUDENT INTERNSHIPS

    We know our graduates are very successful after they leave 
Gallaudet. About half of them receive advanced degrees. Most 
are employed as professionals. And unemployment is almost 
nonexistent among our graduates. One aspect of our programs 
that helps our alumni achieve career success is internships. 
Most of our undergraduates and nearly all of our graduate 
students participate in internships. We have a wide range of 
internship opportunities locally, around the Nation, and 
actually around the world. Students work at NIH, USDA, the U.S. 
Forestry Service, Fish and Wildlife, the Pentagon, the 
University of Michigan, Duke, Lawrence Livermore Labs, Fannie 
Mae, Sallie Mae, Arthur Anderson, and on and on. We have about 
150 different sites where students do internships.
    I asked permission this morning to bring some of the 
students who are currently participating in internships 
tointroduce them to you and to the committee. So I would like for the 
student interns who are here this morning to please stand up, and I 
will give information about you.
    First, David Barglow has a double major in physics and 
computer science. He will graduate in December of this year. He 
has done internships at the Naval Research Lab, Duke 
University, and is currently at NOAA.
    Brent Shiver is a senior majoring in computer science. He 
will graduate in May. He is currently doing a research 
internship in Alexandria, Virginia with the Army Research 
Institute.
    Ann Lynn Smith graduated from Gallaudet and is currently a 
graduate student in secondary education with a concentration in 
English. She did a very successful internship at PBS in 
Alexandria, Virginia.
    Also here this morning is Katherine Breen, a government 
major who will graduate in May. Kate works on the Hill. She is 
interning in the office of Congresswoman Cynthia McKinney. So 
we are very happy to see her here this morning, too.
    Thank you.
    Twelve years ago, when I first became president, I said 
deaf people can do anything except hear. That became kind of a 
slogan that has followed me. I would like to amend that. 
Instead of saying that deaf people can do anything, now I want 
to show that deaf people are doing anything. These are fine 
examples of that.

     LEADERSHIP IN SETTING STANDARDS FOR BEST EDUCATIONAL PRACTICE

    Regarding our second objective, setting a standard for best 
practice, Gallaudet takes very seriously our leadership role. 
Deaf children and adults now have higher expectations for 
themselves. Backed by the Americans with Disabilities Act, 
there are more opportunities for deaf people in the workplace. 
Gallaudet finds itself in a very nice position--right between 
those higher expectations and additional opportunities, and we 
know that we have the responsibility to help our students 
prepare in such a way that they can capitalize on those new 
opportunities out there.

              LAURENT CLERC NATIONAL DEAF EDUCATION CENTER

    We have completely restructured our programs at the pre-
college level to be more responsive to the needs of deaf 
children all over the Nation. This year we changed our name 
from Pre-College National Mission Programs (PCNMP) to the 
Laurent Clerc National Deaf Education Center. The people 
outside Gallaudet really got confused about the former name. 
They thought maybe MSSD was a prep school, or that National 
Mission had to do with missionary or church-related activities. 
Now, we are using the Clerc Center as our name and people are 
excited about that, because Laurent Clerc was the first deaf 
teacher of deaf children in the United States, beginning in 
1817.
    The Clerc Center is made up of the Kendall Demonstration 
Elementary School (KDES) and Model Secondary School for the 
Deaf (MSSD), and related research, demonstration, and outreach 
programs. The focus continues to be on three primary areas: 
literacy, family, and transition. One important new 
programmatic goal will be working with children who have 
cochlear implants. The Clerc Center is expanding its work 
around the Nation and is currently collaborating with more than 
50 programs in States all over the United States.

                           GRADUATE PROGRAMS

    Also setting a standard are programs and projects in our 
graduate school and research division. We have been preparing 
professionals at the graduate level for more than 100 years. 
Nearly all of the graduates of our graduate programs are 
working in fields directly related to their preparation at 
Gallaudet. For the graduate programs, we can show that almost 
no one who seeks work is unemployed.

                         FUNDRAISING ACTIVITIES

    Obviously, for us to achieve those two program goals, we 
must have a sustainable resource base. One big help in this 
regard has been the Federal Endowment Grant program. Since this 
program began in 1988, the University has matched more than 
$13,000,000 in Federal funds. At the end of fiscal year 1999, 
the total fund was valued at more than $42,000,000. We have 
already matched $1,000,000 for fiscal year 2000, and right now 
we are studying the feasibility of matching an additional 
$1,000,000 this year.
    Another big success in the last couple of years has been 
our ongoing capital campaign, the first capital campaign ever 
at Gallaudet. It is a five-year campaign with the goal of 
raising $30,000,000. We are currently in our fourth year and we 
have raised more than $22,000,000. So we are doing very well. A 
successful campaign will provide much needed program support 
and will allow us to construct that new high-tech student 
academic center.

            FUNDING FOR FACILITY MAINTENANCE AND IMPROVEMENT

    Finally, related to resources, I want to give special 
thanks to the Department for including $2,500,000 in the 
Administration budget to continually update and renew our 
facilities. We have worked to develop a comprehensive capital 
improvement plan, a deferred maintenance plan, a long-term 
technology plan, and the capital campaign. With the support of 
the Department and the Committee, it will be possible to 
implement all of those plans.

                             BUDGET REQUEST

    The specific budget request is for a total of $87,650,000, 
an increase in operating funds of $1,670,000 over last year. 
And also, as I said, it includes that $2,500,000 for 
facilities. I firmly believe that your continued support will 
assure a strong future for Gallaudet, which is good for deaf 
citizens and, thus, good for the Federal Government and the 
United States.
    Thank you again for the opportunity to appear before you. I 
will be happy to respond to your questions, sir.
    [The information follows:]



                  Opening Statement--Judith E. Heumann

    Mr. Porter. Ms. Heumann, do you have a statement also? You 
can summarize it if you would like.
    Ms. Heumann. Yes, I do. Let me begin by thanking you on 
behalf of OSERS for the work that you have done with us over 
the years. We really feel that it has been a wonderful 
experience learning from you, and hope you have learned from 
us.
    In addition, I would like to reiterate a number of points 
that Dr. Jordan made. One is that we have had a good working 
relationship with Gallaudet, which we believe has been very 
helpful as we have moved forward with the GPRA indicators. We 
believe that the University is looking seriously at what it 
needs to do in order to continue to improve results for 
children and adults at the elementary, secondary, and 
university level.
    I also have a written statement that I would like to submit 
for the record.
    [The information follows:]



                             BUDGET REQUEST

    Mr. Porter. Thank you both.
    Dr. Jordan, I have been privileged to be here on this 
subcommittee the entire twelve years that you have been 
president of Gallaudet. I think that the University is very 
fortunate to have you at the helm. You have provided the kind 
of progressive leadership and total commitment to your work, 
and the University has I think benefited hugely because they 
have you as its president.
    We appreciate this fine working relationship we have had 
and this friendship we have enjoyed. We want to do our best to 
provide you the resources you need to do your job even better. 
We appreciate your bringing the four students here. It gives us 
tangible evidence of the progress that is being made, because 
the bottom line for every single Federal program is how does it 
help people do better in their lives. And, obviously, your 
graduates are doing very well, indeed.
    Having said that, I am a little dismayed, as I was with 
Howard University, to see what the Administration has done in 
terms of your budget. Our computation is it is a 1.9 percent 
increase. I do not know whether to address this question to you 
or perhaps to the Assistant Secretary.
    Dr. Jordan. I would be happy to answer it first. 
[Laughter.]
    Mr. Porter. All right. It seems to us extremely modest in 
view of the progress you have been making.
    Dr. Jordan. Before I respond, I have to respond to your 
very kind and gracious comments about me and my presidency at 
Gallaudet. I very much appreciate what you have said. I also 
very much appreciate the opportunity to have worked directly 
with you. I recall during the first hearing when you chaired 
the Committee, sir, you asked me ``Why do we need Gallaudet? We 
have the Americans with Disabilities Act where students can 
access higher education anywhere. Why do we need a special 
institution like Gallaudet?'' I hope that during the last 
several years I have convinced you that we have a very real 
need for Gallaudet.
    I also hope to have the opportunity to bring you out there 
to see the campus because, while it is good for you to see four 
students, there is no way you can understand what really goes 
on at Gallaudet without being there and walking in the main 
classroom building while classes are changing and going to the 
cafeteria or the student union and seeing the vitality and the 
vibrancy that are there at Gallaudet.
    Mr. Porter. Dr. Jordan, five years ago I was asking you 
that question not because I didn't know the answer, but because 
we had a lot of new members of our subcommittee who didn't know 
the answer and I wanted you to tell them why Gallaudet, and 
Howard, should be separately funded by the Federal Government. 
And they didn't even know, I suppose I should not say this 
since they are not here, but they didn't even know that these 
were federally chartered institutions. They had no idea. So my 
question gave you the opportunity to tell them why these should 
be matters of interest to them and why the Federal Government 
should be a strong supporter of both institutions.
    Getting back to my question, why is it a 1.9 percent 
increase, Ms. Heumann? That is not even inflation.

                             BUDGET REQUEST

    Ms. Heumann. Mr. Porter, I believe that the $2,500,000 in 
construction funds from fiscal year 2000 that we requested be 
retained and moved into Gallaudet's operating budget is a 
strong show of our support for the institution. Dollars that we 
request for construction typically would not have been 
retrained. I think it is important to recognize that, in 
reality, we are asking for an increase of $4,170,000, or 5 
percent, because these dollars could have been withdrawn.
    Dr. Jordan. Mr. Chairman, if I may, I would second what she 
said about the importance of that $2,500,000. We are certain 
that the $2,500,000 will be dedicated to facilities and to the 
fact that we now have to book depreciation. You see the FASB 
standards have changed so that Gallaudet is required in our 
annual financial report to book depreciation for Gallaudet. 
That is about $6,000,000 every year. This $2,500,000 will help 
us substantially in dealing with that. Therefore, it will not 
be used for regular operations. The $1,670,000 will be used for 
those operations.
    I think the biggest concern I have relates to inflation. 
The CPI recently, last year, for example, was 2.7 percent. The 
CPI in the year 2001 concerns me. I understand that the 
Chairman was part of the group that was caught in the traffic 
this morning because of all the truckers who are driving in to 
D.C. to complain about the cost of fuel. The fuel they use in 
those trucks is the same fuel we use to heat Gallaudet 
University. It has basically doubled in the last year. In the 
year 2001, we will have significant construction and renovation 
costs plus, of course, the utility costs that become part of 
what we do.
    I also am committed to maintaining competitive salaries for 
our faculty, so we will need to address that.
    And finally, I have three key programmatic issues that I 
want and will implement.
    Mr. Porter. Well, let me bottom line this by simply asking 
you the same question I asked President Swygert, and that is, 
what figure did you submit to OMB?
    Dr. Jordan. We asked for an increase of 3 percent instead 
of 1.9 percent.
    Mr. Porter. Do you happen to know what that actual number 
is?
    Dr. Jordan. No, but I can get that information for the 
record.
    Mr. Porter. All right. It was 3 percent.
    [The information follows:]

                        Original Budget Request

    Gallaudet's request to the Department was for a total of 
$89.269 million. This figure included $85.769 million for 
operations, $2.5 million for renovating and improving 
facilities, and $1 million for use as matching funds under the 
Federal Endowment Grant program. The $89,269 million included 
funding for three initiatives: (1) Experiential Learning/
Internships and Accessibility through Interpreting at $475,000; 
(2) Cochlear Implant Programming at the Laurent Clerc National 
Deaf Education Center at $540,000; and (3) Center for the 
Promotion of Accessible Technology at $685,000.

    Dr. Jordan. You understand, of course, that when we submit 
our budget request we do it 16 months in advance of the 
beginning of the fiscal year and, also, therefore, before the 
fiscal year 2000 budget was finalized. So that the increase we 
requested was an increase on a budget that was less than the 
budget we actually received.

         Government Performance and Results Act/Graduation Rate

    Mr. Porter. Yes. And energy prices had not gone up at that 
time.
    I want to also commend you. From the information presented 
in the Department's annual performance plan, it looks like you 
are meeting or exceeding performance targets in many areas. 
Undergraduate and professional studies enrollment is up, 
graduation employment rates are up, most of the student 
retention rates are improving. Will you be working with the 
Department now to revise your performance targets for future 
years because you have met or exceeded the ones that you have 
set for yourself?
    Dr. Jordan. Yes, sir. I also want to thank the Department 
for a very good working relationship. Related to establishing 
and working toward the GPRA goals, there are four areas for 
enrollment that appear in the report--the Kendall School, the 
Model Secondary School for the Deaf, undergraduate enrollment, 
and graduate enrollment. I believe the only area that alarms me 
relates to graduate school. And within the graduate school 
number, there are two separate figures; one is for students who 
study on campus, and one isfor extension students who study in 
our regional centers. The number in extension programs is smaller than 
it was last year, and it is smaller than we want it to be. I note the 
enrollment numbers. I have had meetings with the appropriate people and 
I can assure you that we will address the graduate enrollment.
    Related to the targets for undergraduate enrollment and for 
Kendall and the Model Secondary School for the Deaf, we will be 
working with the Department to review and establish appropriate 
goals.
    Ms. Heumann. Mr. King and I talked about this earlier and 
discussed the mutual goals of the University and the 
Department. We will want to look at what we can do to make 
graduation rates for deaf students comparable to those of their 
hearing colleagues. This is something that we will be aiming 
towards.
    Mr. Porter. Actually, Dr. Jordan, you anticipated my next 
question which was going to be exactly on that subject. Howard 
has the same experience in this area. I wonder whether the good 
economy has a lot to do with this. Sometimes people, when the 
economy is not so good, will choose that time to go on with a 
higher education, but where jobs are plentiful and salaries are 
good, they will move into the working economy and then come 
back and do their advanced degrees later on. Is that part of 
this perhaps?
    Dr. Jordan. I think it is, Mr. Chairman. Every year we do a 
survey of the graduates of that particular year and about every 
ten years we do a more general survey of all people who have 
graduated from Gallaudet. In the survey last year of the people 
who graduated one year ago, there is a small dip in the number 
who go directly to graduate school. More people were going to 
employment than to graduate school and, therefore, it does 
influence and have an impact on the number of people who decide 
to go to graduate school.

                     Construction Projects At MSSD

    Mr. Porter. Last year, Congress provided $2,500,000 for one 
time costs associated with the construction projects for the 
Model Secondary School for the Deaf. I understand this project 
is underway. Can you tell us how these funds are used and when 
the project is scheduled for completion?
    Dr. Jordan. Yes, sir. The project has to do with renovation 
and health issues related to the dormitories of the Model 
Secondary School for the Deaf. An IAQ, or indoor air quality 
study, showed that the air and HVAC system in the dormitories 
was unsafe. So, two years ago we emptied two of the dorms and 
then installed new HVAC systems and renovated those two dorms. 
Last year, we renovated two more dorms and put in new HVAC 
systems.
    One of the dormitories that we renovated last year needed 
substantial structural support. We also razed one dormitory 
that not only had HVAC problems but, because of soil conditions 
where the dorm was located, it had structural problems that 
were significant enough that it would be safer to just tear it 
down. There is one dormitory left, and we are currently 
studying that dormitory to decide whether renovation is the 
appropriate answer or whether we can function without that 
dormitory and should raze it. We have not yet decided what the 
response to that question is.

                           Construction Plan

    Mr. Porter. Do you have a long-term plan for construction 
on the campus? I realize you have to address these things, 
especially older buildings, as problems arise. But do you have 
a long-term construction plan that would address these problems 
in a long-term sense?
    Dr. Jordan. Yes, we do. We have two plans that I mentioned 
earlier; one is a capital improvement plan, one is a deferred 
maintenance plan. We are planning both new buildings, new 
construction, and renovation. We renovate dormitories on a 
regular basis, for example. Students are mean to the 
dormitories in college.
    We have a list and currently that list of projects is about 
$30,000,000. At the top of the list, I would put our new 
student academic center and the Ely Center, or student union 
center, that will be part of that complex. What we will do is 
construct a new high-tech building that I would call a smart 
building. It will include a multimedia auditorium; it will 
include new master classrooms; and it will be linked to a 
renovated student center that will have a student academic 
center, a student activities center, and will combine learning 
that happens in the classroom and in the lab with the kind of 
incidental learning that happens outside the classroom. A cyber 
cafe and things like that will be part of the building.
    The new building is a cornerstone of our capital campaign. 
The renovation of the student center will be part of our 
deferred maintenance plan. We are also looking at renovating 
the arts building and studying the library. We will need to 
renovate Dawes House, which is one of our historic old 
buildings. One of the things that we have to pay attention to 
is our entire telecommunications system and that will need to 
be upgraded in the near future.
    So there is quite a list. I am very proud to say that 
Gallaudet is keeping up with that list. The $2,500,000 included 
in the Administration budget will go a long way to help us with 
that.

                            ENDOWMENT GRANT

    Mr. Porter. Well, you have managed your resources I think 
very, very well. The current market value of the University's 
endowment is $30,000,000 did you say, $32,000,000?
    Dr. Jordan. The endowment?
    Mr. Porter. The endowment fund.
    Dr. Jordan. The entire endowment market value is about 
$133,000,000.
    Mr. Porter. All right, $133,000,000. And what happens to 
the income on the endowment, Doctor?
    Dr. Jordan. The income is used for various purposes. Some 
of it goes to support general operations, some of it is 
targeted to specific scholarships, and some of it is targeted 
to a specific program. The board of trustees has established a 
very prudent and conservative pay-out policy. We spend income 
that we earn at a rate equal to 4 percent of the value of the 
principal. That allows the difference between 4 percent and 
whatever the market pays to go back and be reinvested so that, 
long term, the endowment grows and in the future will be even 
bigger and be able to support more programs.
    Mr. Porter. And has the investment of endowment funds 
generally kept pace with the growth of the markets which have 
grown greatly in recent years?
    Dr. Jordan. Yes, sir. The board also established a very 
good investment policy. The investment policy is monitored for 
us by an investment firm. We hire several different money 
managers and every time the board meets they review the 
benchmarks for the performance of those money managers. The 
money managers stay right at the benchmarks for the fund type 
that they manage. If they do not, then we replace those money 
managers. So we are very close to what has been happening in 
the market.
    Mr. Porter. Well, Dr. Jordan, the problem is that you 
anticipate all my questions and answer them before I can ask 
them. You do such a fine job there. We know that Gallaudet and 
its future is in very fine hands. Your management of the 
resources that are provided in all ways is exemplary. 
Obviously, we want to do our part to provide the support that 
the Federal Government should be providing to you to do your 
job even better.
    So thank you very much for appearing today. Thank you, Ms. 
Heumann. We, as I said earlier, value very much our 
relationship with you and with the institution. And thank you 
for the excellent work that you are doing.
    Dr. Jordan. Thank you, Mr. Chairman. As I said, I regret 
more than I can tell you that this will be the last time that I 
testify before you.
    Mr. Porter. Thank you, sir.
    The subcommittee will stand in recess until 2 p.m.
    [The following questions were submitted to be answered for 
the record:]



                                          Thursday, March 16, 2000.

                 SPECIAL INSTITUTIONS FOR THE DISABLED:

    NATIONAL TECHNICAL INSTITUTE FOR THE DEAF

    AMERICAN PRINTING HOUSE FOR THE BLIND

                               WITNESSES

JUDITH E. HEUMANN, ASSISTANT SECRETARY, SPECIAL EDUCATION AND 
    REHABILITATIVE SERVICES
ROBERT R. DAVILA, VICE PRESIDENT, NATIONAL TECHNICAL INSTITUTE FOR THE 
    DEAF, ROCHESTER INSTITUTE OF TECHNOLOGY
WENDELL S. THOMPSON, DIRECTOR, GOVERNMENT AND ADMINISTRATIVE AFFAIRS, 
    NATIONAL TECHNICAL INSTITUTE FOR THE DEAF
TUCK TINSLEY III, PRESIDENT, AMERICAN PRINTING HOUSE FOR THE BLIND
CAROL A. CICHOWSKI, DIRECTOR, DIVISION OF SPECIAL EDUCATION, 
    REHABILITATION, AND RESEARCH ANALYSIS, BUDGET SERVICE
RAMON F. RODRIGUEZ, LIAISON OFFICER, OFFICE OF SPECIAL INSTITUTIONS, 
    OFFICE OF SPECIAL EDUCATION AND REHABILITATIVE SERVICES
    Mr. Porter. The subcommittee will come to order.
    We continue our hearings on the Department of Education and 
Special Institutions for the Disabled, with the National 
Technical Institute for the Deaf and the American Printing 
House for the Blind. And we're pleased to welcome Judith 
Heumann, the Assistant Secretary for the Office of Special 
Education and Rehabilitative Services, Dr. Robert Davila, Vice 
President of the National Technical Institute for the Deaf, and 
Dr. Tuck Tinsley, the President of the American Printing House 
for the Blind.
    And before Ms. Heumann makes her statement, I'd like to 
recognize my colleague, Louise Slaughter, for a special 
introduction.

                  Remarks By Hon. Louise M. Slaughter

    Ms. Slaughter. Thank you.
    Mr. Chairman, before I introduce these constituents, I want 
to take just a second to say that I'm very much aware that this 
is the last time that I will be appearing before you. And as 
I've expressed to you many times and everybody else who will 
listen to me, your loss to the Congress is incalculable. And 
among everybody else, I will miss you very, very much. And 
thank you for the wonderful work that you've done here.
    This afternoon, I'd like to introduce two of my 
constituents from Rochester who represent the National 
Technical Institute for the Deaf, and express my profound 
thanks to the members and staff of this Committee for your past 
support for NTID. These gentlemen represent an institution that 
I know is very special. Dr. Davila is the Vice President and 
Mr. Wendell Thompson the Director for Government and 
Administrative Affairs. And they've been here before, visiting 
this Committee, and I know feel the same way I do about you.
    I'm especially pleased to be introducing Dr. Davila in his 
fourth year in his position. Many of you may remember seeing 
Dr. Davila testify before the Committee in his role as the 
Assistant Secretary for the Office of Special Education and 
Rehabilitative Services from 1989 to 1993, or earlier in the 
1980s as the Vice President of Gallaudet University.
    NTID is very fortunate to have Dr. Davila at its helm 
because of his 40 years in education, as a high school math 
teacher and assistant principal, a K-12 superintendent, a 
college professor and administrator, and a university vice 
president. These experiences have prepared him well for his 
current responsibilities, not to mention his four years at the 
Department of Education.
    Mr. Chairman, NTID uses its Federal money extremely well. 
It has achieved tremendous success in preparing our hearing 
impaired people to enter society and the work place and to 
compete on par with their hearing peers. Collaborative research 
between NTID and the Social Security Administration shows that 
in comparison to students who do not complete a degree, NTID 
graduates over their lifetimes are employed at a much higher 
rate, earn substantially more, pay significantly more in taxes, 
and participate at a much lower rate in the Federal transfer 
program such as SSI and SSDI.
    And of course, their most significant annual achievement is 
the fact that approximately 95 percent of their students find 
employment shortly after graduation. The Rochester community 
takes great pride in that institution, and NTID is a good 
steward of the money that you allocate to this fine 
institution. We appreciate your past support and look forward 
to your support this year.
    And thank you again for your extraordinary kindness.
    Mr. Porter. I thank the gentlelady from New York for her 
special introduction and also for her very generous and kind 
words for me.
    Ms. Slaughter. You're welcome.
    Mr. Porter. Thank you so much, Louise.
    Ms. Heumann, do you want to begin?

                  Opening Statement--Judith E. Heumann

    Ms. Heumann. Sure. It's my pleasure to appear before you on 
behalf of the American Printing House for the Blind (APH) and 
the National Technical Institute for the Deaf (NTID). I'm 
pleased to present the Department's testimony on behalf of the 
President's fiscal year 2001 budget for these institutions.
    I'd like to take a few minutes to summarize the budget 
request and to comment on several key issues. Then 
representatives of the American Printing House for the Blind 
and the National Technical Institute for the Deaf will provide 
specific testimony in support of the budget request for their 
respective programs.

                         Budget Request for APH

    The budget request for the American Printing House for the 
Blind is $10,265,000. This is an increase of $165,000 above the 
fiscal year 2000 appropriation level. The fiscal year 2001 
request also would retain $380,000 that was included in the 
fiscal year 2000 appropriation for initiatives that will be 
completed in 2000, will cost less in 2001, or that APH did not 
request funding for in 2001.
    The combination of the proposed increase and the funds 
retained from 2000 will be used to provide $183,000 for APH to 
help offset the effect of inflation and assist with other 
program costs. Furthermore, $362,000 will be used to increase 
funding for a number of special projects under the Advisory 
Services and Educational and Technical Research activities. 
This includes $189,000 for a major new initiative to develop a 
tactile display that would simulate computer graphics. The 
Department believes that this is a high priority endeavor 
because, without adequate tactile graphic displays, students 
with visual impairments have no comparable means to experience 
the visually graphic educational materials enjoyed by their 
sighted peers.

                        Budget Request for NTID

    The budget request for the National Technical Institute for 
the Deaf is $51,786,000. This is an increase of $3,635,000 over 
the fiscal year 2000 appropriation. The 2001 request also would 
retain $2,651,000 that was included in the fiscal year 2000 
appropriation for the first stage of the dormitory construction 
project. The combination of the increase of $3,635,000 in 
funding above the 2000 level and $2,651,000 retained from 2000 
would be used to provide an increase of $910,000 for operations 
to help offset the effect of inflation and $5,376,000 for the 
second year of the dormitory renovation project.

                        Endowment Grant Program

    As in previous years, our request would provide NTID the 
flexibility to use current year program funds for its endowment 
grant program. The Institute would have the discretion to 
determine whether and how much of the appropriation to use for 
matching purposes. Our request, however, continues to include 
$586,000, which was incorporated into the operations base from 
prior years for endowment purposes.

                           Construction Funds

    The Department is requesting an increase of $2,725,000 for 
NTID construction above the fiscal year 2000 appropriation 
level of $2,651,000, for a total of $5,376,000 in construction 
funds for fiscal year 2001. These funds would be used for the 
second stage of the NTID dormitory renovation project. 
Originally, NTID had requested these funds in two increments. 
However, recent plans submitted by NTID show that it is now 
projecting to spend only $562,500 of the $2,651,000 
appropriated in fiscal year 2000. In addition, the Institute is 
now projecting that the funds will be needed over a 3 year 
period of time: $562,500 in 2000, $8,882,000 in 2001, and 
$2,408,000 in 2002. Pursuant to these changes, the Department's 
request for fiscal year 2001 represents the total of the funds 
needed for fiscal years 2000 and 2001, less the funds already 
provided for fiscal year 2000 and the 15 percent required 
match. The Department strongly believes that NTID should take 
advantage of the 85 percent match to leverage Federal resources 
and expand funding available for this project.

             Government Performance and Results Act (GPRA)

    The Department has also worked closely with NTID and APH to 
monitor and update their annual program performance plans and 
reports to comply with the requirements of GPRA. The integrated 
performance plans and reports that have been submitted to 
Congress for the institutions include the key performance 
measures the Department believes are appropriate for inclusion 
in the GPRA plans. In addition, there are more extensive plans 
that we refer to as master plans for each institution. These 
plans contain other measures not included in the annual 
performance plans submitted to Congress that will be used by 
the institutions to oversee internal operations, and by the 
Department for monitoring purposes.
    We are pleased with the efforts that the institutions have 
made in working with the Department to develop and track these 
measures, which we believe are vitally important to the 
missions of their respective programs.
    In fiscal year 2001, the Department plans to continue to 
work closely with the Special Institutions for Persons with 
Disabilities to ensure that Federal funds are being used 
efficiently and effectively to expand educational opportunities 
and employment opportunities for individuals who are deaf or 
hard of hearing, and individuals who are blind.
    We'll be happy to answer any questions.
    [The information follows:]



    Mr. Porter. Thank you, Ms. Heumann.
    Let the Chair say that I intend to recognize Dr. Davila for 
his statement, then I'm going to recognize the gentlelady from 
Kentucky for any comments she would like to make before 
recognizing Dr. Tinsley.
    Dr. Davila.

                  Opening Statement--Robert R. Davila

    Mr. Davila. Thank you, Mr. Chairman.
    I want to echo what other people have said today about your 
service with this Committee. If you'll recall, you were at 
Gallaudet University during your first year in Congress. I was 
one of your hosts. We had a breakfast meeting with some of your 
constituent students from your district. Now some years later, 
you are leaving. I want to thank you for all the support you 
have given to people who are deaf, people who have 
disabilities, and especially to the institutions with whom I 
have been associated. Thank you very much.

                    Fiscal Year 2001 Budget Request

    Mr. Chairman, I am delighted to testify on behalf of the 
President's fiscal year 2001 request of $51,786,000 for NTID, 
which includes $46,410,000 for operations and $5,376,000 in 
construction funds for the second phase of our three-phase 
dormitory renovation project. I am very pleased that the 
Administration remains committed to funding the $13,500,000 
dormitory project, which is absolutely essential if we are to 
properly house our students.
    RIT is in the process of upgrading all 17 of itsdormitories 
on the campus, including the three buildings that house the NTID 
students. The buildings are between 20 to 30 years old, and in much 
need of renovations and improvements.

                             STRATEGIC PLAN

    As you know, NTID under previous leadership went through a 
comprehensive strategic planning process in 1992. While these 
plans are certainly still relevant today, last year, I reported 
to this Committee that we completed a review of the strategic 
plan, and we will be concentrating on four primary objectives 
over the next few years. They are as follows:
    First, NTID will actively market an enhanced national 
identity that accentuates its comparative advantages as a 
career preparation institution. Two, NTID will continue to 
develop flexible cutting edge career education curricula and 
viable new technical programs. At the Institute, seven 
technical programs have been phased out and four new ones have 
been added. We plan to identify new program areas for the 
future, and streamline the curriculum development process to 
make us more responsive to changes in the workplace.
    Three, NTID will expand its efforts to ensure full access 
for deaf and hard of hearing students on the campus of RIT, to 
assure that students maximize their educational, personal, and 
social potential. We have expanded our interpersonal support 
services and added C-PRINT as an option for classroom 
interpretation. C-PRINT is a real-time captioning system that 
has been developed through research at NTID which is now being 
shared and implemented throughout the country.
    Four, NTID will implement an innovative strategies and 
support system to assure that we retain and graduate students 
who are fully prepared to meet all the requirements of the very 
demanding workplace of the future. We plan to increase our 
training efforts and measure student and alumni satisfaction as 
part of the GPRA mandated performance indicators. We have also 
established a task force to review quality of student life on 
the campus.
    We have established another task force to review issues 
related to students who are at high risk of dropping out. And 
we have established a new comprehensive communication center 
which houses instructional labs for students who need to 
develop sign language competence and better speech and 
language, including audiological testing facilities and a new 
telecommunications lab. We thank the Committee for their 
support that has enabled us to construct these important state-
of-the-art laboratories to help students develop their 
communication skills.

                               ENROLLMENT

    I'd like to review briefly some highlights of the year. The 
entering class in the fall of 1999 was 434 new students, the 
second largest since 1987. The student body has grown to 1,220 
students. This is the second highest in 10 years. Twenty-four 
percent of our students come from minority backgrounds, which 
is triple the percentage it was 10 years ago.

                          FUNDRAISING SUCCESS

    We have just recently successfully completed an $11,500,000 
fund raising campaign. We raised $551,714 in endowment funds 
last year. Of that amount, we were able to match an additional 
$390,984 that we set aside from operating funds. Our endowment 
as of December 31 was nearly $21,000,000, which I think is 
exceptional, because we have not been actively engaged in 
development activities for very long. In the short time that we 
have, about 12 years, we have gained knowledge and expertise 
that helped us accumulate these funds. They are now going 
directly to scholarship support for our students.
    I am also pleased to inform you of our recent $2,500,000 
leadership gift given to us by a couple, Mr. and Mrs. Joseph 
Dyer, from Florida. The funds were given to us for the 
expressed purpose of constructing and establishing an arts 
center. NTID has one of the largest and finest collections of 
artwork by deaf and hard of hearing artists from all over the 
world. We have not had a place to display these outstanding 
works created by these very talented deaf people. Now we will 
have such a place. No Federal funds will be used to provide 
support for this construction. All will be done by private 
funds.

                 GOVERNMENT PERFORMANCE AND RESULTS ACT

    We are using the performance indicators as our management 
tool, and moving ahead with institutional strategies that will 
help us fulfill the goals of the Institute. We have identified 
28 different performance indicators which we will monitor. We 
have chosen five as the highest priority. They include: first, 
retention; second, graduation rates; third, student 
satisfaction; four, alumni satisfaction; and five, diversity. 
And there are already demonstrated gains and/or progress in all 
five indicators.
    We work very closely with the Department to establish our 
annual goals and to make our judgments on progress and 
appropriateness of performance indicators on an annual basis.
    In closing, I would like to make a few remarks about our 
host institution, the Rochester Institute of Technology. RIT is 
a 171 year old institution and is one of America's pioneers and 
leaders in cooperative education. Cooperative education is the 
practice of requiring that students gain paid hands-on work 
experience as part of the requirements for graduation. And 
because of this, we have provided many opportunities for deaf 
students at NTID and RIT to pursue and obtain very valuable 
experience while they are still students. And coupled with 
their instruction and their experiences in the classroom they 
come out very well prepared to hit the ground running, so to 
speak, when they find employment.
    Additionally, RIT, which includes NTID, is recognized by 
U.S. World and News Report as a number one comprehensive 
institution in the northeast for academic reputation. It 
wasalso in the top 15 of Money magazine's best college values. And was 
rated number 21 in the Nation as one of the most wired universities 
throughout the Nation by Yahoo Internet Magazine.
    Mr. Chairman, this completes my brief report. A more 
detailed report has been submitted for the record. I would be 
pleased to answer questions.
    [The information follows:]



    Mr. Porter. Thank you very much, Dr. Davila.
    The gentlelady from Kentucky, Mrs. Northup.

                    Remarks by Hon. Anne M. Northup

    Mrs. Northup. Good afternoon, Mr. Chairman.
    Mr. Chairman, it gives me great pleasure to introduce Tuck 
Tinsley, who is the President of the American Printing House 
for the Blind. Actually, Mr. Tinsley was born in Kentucky, but 
he was educated in Florida, Florida State University, and the 
University of Florida. And he spent the earlier years of his 
career at the Florida School for the Deaf and Blind, originally 
as a mathematics teacher, then an assistant principal, and 
finally as principal before in 1989, he became President of the 
American Printing House for the Blind.
    He has published 17 professional monographs and articles. 
He has a number of professional affiliations, and he was given 
the 1997 distinguished alumni award in business and industry 
that is presented by the Florida State University, and in 1994, 
the William H. English leadership award that is presented by 
the Council of Schools for the Blind.
    He is a friend of mine, and Mr. Chairman, maybe at this 
time it would be appropriate for me to share with the Committee 
that Louisville, Kentucky has more blind per population than 
any other metropolitan area in the country. And I think one of 
the reasons for that is that we have so many resources. We have 
a wonderful school for the blind. We have industries for the 
blind. And we have, of course, the home, the American Printing 
House for the Blind.
    And Tuck Tinsley serves as a very impressive spokesperson 
and leader in that community. So it gives me a great deal of 
pleasure to introduce him to the Committee today.

                  Opening Statement--Tuck Tinsley III

    Dr. Tinsley. Thank you, Representative Northup. We are 
certainly fortunate to have you representing the Commonwealth 
in Congress and to have you as a friend of the visually 
impaired throughout the country. I thank you very much for the 
introduction.
    I'd like to also salute you, Mr. Chairman, and thank you 
for your support of visually impaired students throughout the 
country in the years you've been Chair of this Committee.
    It's a pleasure for me to present the President's fiscal 
year 2001 budget request for the American Printing House for 
the Blind. I would like to submit a full opening statement for 
the record, but briefly highlight the opening statement.
    The Act to Promote the Education of the Blind designates a 
board of ex officio trustees, currently 156 professionals, 
which assures that the funding for the Act is used to produce 
and distribute specially designed educational materials that 
are not otherwise available. Approval of ex officio trustees is 
necessary for the research undertaken to identify methods to 
address students' needs, for the development and subsequent 
field testing of prototype educational aids and materials 
designed to address the students' needs, for the actual 
production of the aids and materials, and for follow-up 
revisions of the aids and materials as necessary.

                     FY 2001 BUDGET REQUEST FOR APH

    By approving the expenditure of appropriated funds only for 
unique educational aids and materials designed for blind 
students, the ex officio trustees ensure that this program does 
not duplicate other programs. The total request for the Act to 
Promote the Education of the Blind for fiscal year 2001 is 
$10,265,000, an increase of $165,000, or 1.6 percent over the 
fiscal year 2000 appropriation.
    The appropriation is divided into three categories: 
educational aids, advisory services, and research and 
development. For educational materials, the request for fiscal 
year 2001 includes $8,302,000 to supply special educational 
materials to an estimated 58,205 legally blind students. This 
is an increase of 2 percent, or $163,000 over the fiscal year 
2000 funding level for educational materials.
    I have placed on the table a number of different type 
books, print braille books, and curricular materials. I also 
have a thermometer, which I would like to show you if I may.
    Boy, did I get lucky that I brought two. [Laughter.]
    Dr. Tinsley. This is a tactile demonstration thermometer 
that has a two-textured, two-color mercury column. It is 
brailled and has large print on a highly visible background for 
low vision students. There are both Celsius and Fahrenheit 
scales, with markings at every 5 degrees. The development of 
this included a need that was identified at the local level and 
the ex officio trustees approving the prototype and the field 
testing. They were involved in the field testing and the 
development of it. Then they approved the aid before 
production, after they saw the results of the field test.

                        ADVISORY SERVICES BUDGET

    In Advisory Services, the fiscal year 2001 request includes 
$185,000, which is a $5,000 increase over the fiscal year 2000 
funding level. The request for Advisory Services also includes 
the continuation of six special projects that we began in the 
current year. These special projects are $125,000 for an Expert 
Data Base Service. This service is an accessible, on-line data 
base of facts, references, and resources that are vital to 
students who are visually impaired and to those who provide the 
educational programs to the students.
    The second continuation would be $95,000 for an Electronic 
File Repository. This repository houses braille textbook files 
from APH and braille producing agencies and supports the 
current national effort to expedite the provision of braille 
and publisher's files to producersof alternative media. We have 
some 360 braille files in the repository now. We have 212 publishers' 
files that we are now waiting for formal permission to enter, although 
we already have verbal permission. The real impetus was the report 
language last year, and I can get into that later. But, let me get 
through the opening statement.
    For the Student Use Initiative for the Louis data base, 
we're requesting $100,000. In the year 2000, we've had 
demonstrations throughout the country for hands-on use by blind 
students, empowering the students to identify, locate, and 
access materials on their own. We've found that parents, 
teachers, and administrators have been very excited about this, 
so we've expanded the scope of this consumer use or ``student 
use'' initiative.
    The fourth initiative is $140,000 for a National 
Instructional Partnership. This program will expand the number 
of State and regional APH product training opportunities. In 
turn, it will increase the expertise of the parents and the 
personnel who serve the visually impaired.
    Fifty thousand dollars is requested for the Collaborative 
Instructional Project with Teacher Training Programs. This 
project, which we've started this year, provides instruction in 
the use of educational materials for visually impaired students 
to the teacher training programs that train the teachers who 
will eventually be working with the students. There are 28 
programs for the visually impaired at universities around the 
country. And the results of this project will benefit the 
university programs, APH, and the students.
    Prior to this, there's been very, very little formalized 
communication or partnership with this important part of the 
field--the teacher training programs. It's interesting how 
little money they have for products. They have a real tough 
time. Some of them are only one person programs.
    The last project in Advisory Services is $115,000 for 
Product Information and Training Materials. The goals of this 
project are to diversify the methods and media we use to 
disseminate APH products and training materials, and to improve 
products and services to meet the evolving needs of blind 
students.

               Educational and Technical Research Budget

    In educational and technical research, the request is 
$515,000, which is a $15,000 increase over the fiscal year 2000 
funding level. We're also requesting funding for six continuing 
initiatives and one new initiative in educational research. The 
first of the six continuing initiatives is $17,000 for Primary 
Grade Storybooks that introduce tactile graphics to K-2 blind 
students. We're in the second year of that three-year program.
    This initiative focuses on two major obstacles for students 
who are blind. Number one, they don't have access to tactile 
materials. Number two, when they do have access, they don't 
have a sequence of training that provides them the instruction 
to really know how to address tactile graphics. For example, 
where's the key, on the top left or bottom left? How do you 
approach a tactile graphic?
    The second continuing initiative would be the continuation 
of the Optical Aids and Curricular Training Kits project. We 
have two kits designed. One kit that we're working on this year 
is for distance vision. The other kit for this next year, 2001, 
would be for near vision. The kit for distance vision has five 
monoculars from, it turns out, four different companies: 
Walters, Speewell, Nikon, and Aschenbach. We are also 
developing a curriculum to work with the kids on using these 
aids.
    The other kit, next year, would be for near vision. It will 
have hand-held magnifiers and stand magnifiers. We found this 
year, in some research with San Francisco State University, 
that when students pick out the size print that they prefer, 
they actually need 1.6 times larger type than they would 
normally select in order to read most efficiently.
    We have a third continuing initiative, it's $77,000 for 
continuation of the development of Textbook File Conversion 
Software. The first of two objectives for this is to create 
software that will convert publishers' files into a consistent 
format. We get publishers' files in any one of 24 or 25 formats 
now. With PDR files that are visual picture files that you 
can't manipulate, you can't really translate them 
appropriately.
    The second objective is to develop software to allow 
visually impaired users to read the books in any one of seven 
formats: refreshable braille, hard copy braille, synthesized 
speech, digitized speech, computer file, hard copy large type, 
and large type on a monitor. Using a consistent format from 
publishers, the software could be use to branch off into any 
one of the accessible forms I just mentioned.
    One hundred and twenty thousand dollars is requested for 
continuation of Braille Literacy for Older Students project. 
The purpose of this project is to introduce older students and 
adults to the grade 2 Braille code. These would be people who 
don't read well or don't read at all. Although we have, at the 
Printing House, five reading programs, they aren't appropriate 
for adults. We're looking at short stories that have adult 
content, are not at a juvenile level, and that take into 
consideration that adults have a longer attention span than 
children and can think of more than one thing at a time. It 
also takes into consideration that adults really lose some of 
the sensitivity in their touch, as far as reading.
    The fifth continuing initiative in research is $110,000 for 
development of Inexpensive Refreshable braille Display. This 
initiative will identify alternative technologies to use to 
create a reliable, inexpensive refreshable braille display. 
This is a display where, right now, you have either 24 or 80 
cells of refreshable, linear braille. This would be like a page 
of braille that, when you read it and get to the end of it, 
would pop up the next page.
    We're in the second year of that project and we have some 
exciting work that we're doing with Livermore Laboratories in 
California. They have come up with a wonderful new technology 
that uses MEM motors, or microelectrical mechanical motors. To 
push up one Braille dot, not a cell, but a single dot, it takes 
six motors. These motors are five millimeters in width.

               Educational and Technical Research Budget

    Anyway, that's really exciting and flows into the new 
initiative, which is $189,000 for the Interactive Tactile 
Display project. The goal of this project is to devise a 25 or 
20 by 20 size cell format that you could use to access tactile 
graphics in textbooks, including all sorts of charts, graphics, 
and so forth. This is not in a dot format. Unlike the dot 
printers now, it uses a format where if it's a line, it will be 
a consistent line. This could use the same technology that 
Livermore has. We've been working with them, and we're working 
to develop a new contract with them now.
    The other continuing initiative that I skipped is the Point 
of Reference Aid. This will be the second year of this two year 
project, which will cost $64,000 in 2001. This is an aid that 
will be very simple; it will have two buttons on it. One will 
allow a person to set a point that they want to recall, a 
direction, and the other one would recall that direction later.
    Say you came in this room, for instance, and talked to Ms. 
Heumann and Dr. Davila and you turned around five or six times. 
Then with the sound system, you can't tell where the Chairman 
is. If at first you pointed to the chairman, and you turned all 
around, and the meeting is called to order, you just move it, 
and it vibrates when it gets to that direction.
    Another example would be if you're going into a gym for a 
big event. You mark the door when you come in, and you do all 
these things. Then when you get ready to leave you don't look 
foolish and start walking toward the restroom. You can walk 
right toward the door.
    We're real excited about this project. Very simple and 
inexpensive, the size of a pen. Put it in your pocket. And 
that's independence. That is so, so important, although it 
sounds insignificant. It's absolutely important.
    I have some tactile graphics, if I may just take one 
second, I wanted to give you a graphic called ``Visualizing 
Myosis.'' This is a page out of a biology book. It has a 
graphic that shows the beginning of myosis and goes all the way 
to the end product of myosis, where you have four haploid 
cells. But without the tactile graphic, the key means nothing. 
This one page takes six pages in braille. But it's essential if 
you're going to get this concept across.
    It is very time consuming to produce this. This is done by 
hand. There aren't any computer programs that do this now. The 
interactive tactile display that we're talking about would 
address this.
    This sample also gives you an example of law the textbooks 
are so visual. It is absolutely ridiculous how much trouble it 
takes to edit a book to make it make sense for blind students. 
Here's an example. This says, ``circle the letters that 
complete the words. Write the correct letters on the lines.''
    The pedagogical intent here is you've got the difference 
between MP and ND endings. So the first one has F-R-I-E blank 
blank. The picture is two boys, one with his arm around the 
other. So you would put N-D for friend. The next picture shows 
water, then the beach, and an arrow pointing at the beach. And 
then the word is S-A blank blank, either MP or ND. And they are 
supposed to sound it out. The pictures are key in knowing 
what's there. And everything in this workbook is visual. The 
more visual it is, the more likely the local control textbook 
selection committee is going to pick it. Many of them don't 
really look at the content of a book as much as flipping 
through it, and ``Oh, man, this looks prettier than that one, 
and look at all the colors, and this will excite the kids.'' 
And that just causes havoc with the blind students and with 
those who try to provide materials to them.
    In providing needed materials for a very low incidence 
population, the Act is structured and administered to maximize 
Federal resources and the service of local needs. Needs are 
identified at the local level. Experts in the field who serve 
as project consultants and evaluators are identified, and 
research is conducted to identify the most effective methods of 
addressing those needs. Subsequently, prototype aids and 
materials are developed and teaching materials from the field 
are evaluated for potential usefulness. Extensive pilot and 
field testing are conducted and the product review and 
revision, if necessary, completed.
    Mr. Chairman and Representative Northup, the American 
Printing House for the Blind continues to be committed to 
meeting the needs of students who are blind through the 
research, development and provision of unique educational 
materials necessary for them to have an equal opportunity to 
benefit from educational programs. The Act to Promote the 
Education of the Blind is a program that works. The key is 
continuous input from direct service providers at the State and 
local levels, with the obvious benefits of grass roots 
involvement.
    Mr. Chairman, I'll be pleased to answer any questions 
regarding the 2001 budget request.
    [The information follows:]



    Mr. Porter. Dr. Tinsley, Dr. Davila and Ms. Heumann, thank 
you all for your statements.
    I have to say to the gentlelady from Kentucky, before she 
came in, I was feeling that Dr. Tinsley was being a little 
neglected. And I knew you'd be here, though.
    [Laughter.]

                   TECHNOLOGY AND HEARING IMPAIRMENT

    Let me thank Dr. Davila and Dr. Tinsley for their kind 
comments about my work. I have to say, that with Representative 
Slaughter and Representative Northup on your respective sides, 
it isn't going to matter whether I'm here or not. They're more 
than able to advocate for you and help with the budget and we 
appreciate the special introductions that both gave to both of 
our very distinguished guests today.
    Let me begin with some comments or questions. Dr. Davila, 
when Dr. King Jordan was here this morning, he said, and I hope 
I'm not stating this erroneously, but basically he said, with 
the importance of computer technology and the training that 
deaf persons can obtain in computer technology, it's irrelevant 
that a person can't hear, that they can learn to work a 
computer as well as anyone.
    I think it's particularly interesting that I read today 
that Steven King's newest novel is now available on computer 
and you just sit there and hit your mouse and page after page 
will roll up and you can read the newest novel instantlywithout 
even buying it. I suspect that it won't be very long before we get 
something that looks like a book, so that we can carry it around, and 
Palm Pilots come to mind immediately.
    But it will probably open like a book and even feel like a 
book, but inside will be a computer screen. And any piece of 
written material that you want will somehow be instantly 
available to you, and you can curl up with your little mini-
computer in the corner and read like anybody else.
    So these technical advantages, and I want to talk to Dr. 
Tinsley about them, too, but they're really changing things a 
lot. Do you see it the same way?
    Dr. Davila. Believe me, I personally truly appreciate the 
developments that have really improved the quality of life for 
people who are deaf and hard of hearing. Because I grew up in a 
time when there was no technology, no access to the human voice 
except through lip reading or sign language. The little device 
I have here, for example, helps me to speak to my wife through 
a TTY. I can send e-mail, send a fax, and can receive the same. 
So I am fully independent with a little piece of technology 
like this.
    I used to dream about this when I was a little boy. And now 
it's an everyday thing. I think all universities and 
technological companies are emphasizing the applications of 
computer technology. I mentioned a new process that we 
developed at NTID, C-PRINT, which is a low cost real-time 
captioning system. It is capable of providing students both 
real-time captioning and a printed transcript and it requires 
far less skills than a court reporter and less expensive 
equipment. With C-PRINT, we use a standard laptop and a 
standard keyboard and special software. Any good typist can be 
trained to efficiently transcribe a lecture so that students 
can view the lecture verbatim.
    We are also going beyond that concept. For example, we are 
attempting to apply automatic speech recognition technology to 
this system. Hopefully some day the teachers will wear 
something around their collar and speak normally, and the deaf 
student will be able to read that teacher's comments on a 
laptop, sitting in the back of the class. We are getting close 
to that now. There are still some bugs in the system, so we may 
be a few years away. But nothing is impossible.
    I agree 100 percent with King that for a person who is 
deaf, access has been bettered through technology. It gets 
better and better every day.

                    TECHNOLOGY AND VISUAL IMPAIRMENT

    Mr. Porter. Thank you, Dr. Davila.
    Dr. Tinsley, it's not quite the same, though, for a person 
who is blind. It's more difficult, because we are still bound 
to a Braille type system, are we not?
    Dr. Tinsley. It is much more difficult. That nice little 
device that Dr. Davila has is so user unfriendly for visually 
impaired people. Gary has a small telephone that has an LED 
dial, and it has all this information in a format that is 
totally useless to him. We're working currently with Lucent 
Technologies to use the telephone for visually impaired 
individuals to access the internet with some new technology 
they have.
    As far as the visually impaired, let me clarify our focus. 
The Library of Congress, NLS, has a web braille site for trade 
books so that books like the Steven King book are available. We 
can read those books because we can use screen readers and read 
those books. However, our focus is on textbooks. And textbooks 
have so much visual content and there's nothing to translate 
the graphics, nothing to translate the math.
    Mr. Porter. Excuse me. When you say a screen reader, does 
that read out loud to you?
    Dr. Tinsley. Yes sir, it will read what's on the screen. So 
you can download Steven King's book and a blind person can read 
that book. That's called a trade book, a recreational reading 
type book.
    The publishers are down to maybe seven major ones, since 
Pearson Educational now owns Scott Foresman, Addison Wesley, 
and Simon and Schuster. Before we were dealing with 40 
different educational publication companies. Now they're really 
down to seven major educational publishing companies. So we're 
really making some progress. However, those publishers came out 
with approximately, now this is the educational side, 3,000 
textbooks in 1999 that were copyrighted. Of those, less than 
100 are available in Braille, with 200 volunteer organizations 
doing the Brailling. To do a good job on an algebra book will 
take a year. It will take a year.
    So with the technology we currently have, you've still got 
to read the textbook, and you've got to look at the educational 
content. So, as far as reading a trade book, screen readers are 
great. But the thing we're focusing on, the educational area, 
is very, very difficult. Thank you for asking.

                        NIDRR TECHNOLOGY REQUEST

    Ms. Heumann. If I may, Mr. Chairman.
    Mr. Porter. Ms. Heumann.
    Ms. Heumann. The panel you have before you is one part of 
our office. The next panel includes other parts of our office 
such as NIDRR. One of the areas that we've been focusing on has 
to do with technology and access for disabled individuals to 
technology. Section 508, which was amended during the 
reauthorization of the Rehabilitation Act, requires the Federal 
Government to procure accessible technology for persons with 
disabilities. This is very important for the disability 
community. It will help ensure that the designers of technology 
recognize that there is a larger population out there than 
they're aware of, one for whom technology needs to be 
accessible.
    I think we are at a stage right now where industry can do 
much more than it could do 10 or 20 years ago. The message we 
want to convey is that technology for disabled individuals in 
some ways is even more important than for non-disabled 
individuals. As King Jordan said earlier, it really is leveling 
the playing field. However, it also can lock people out of the 
ability to become integrated into communities.
    I think government--the Federal Government, State 
governments, the Congress, and State legislatures, really are 
taking up this message and assuring that we are doing what we 
need to do. Our budget under NIDRR is focusing on this 
technology. We have requested $5,000,000 to help provide 
technical assistance to primary and secondary schools and 
institutions of higher education.
    One of the problems is that even when technology is 
available, in many cases those who have responsibility for the 
purchase of it are unaware of what's available and unaware of 
what the statutory requirements are. Most importantly, they 
need to know that it's relatively easy, in many cases, to buy 
technology that's accessible.
    Our budget proposal isintended to help make sure that 
educational institutions are buying appropriate technology. In many 
cases, what we're finding now is that insitutions are not buying 
appropriate technology even though it is available. So, they have to go 
back and retrofit or buy something again. It's really needless to do 
that at this point in time.

                            UNIVERSAL DESIGN

    Mr. Porter. It seems to me overall there's been a lot of 
progress on technologies that help disabled individuals. And 
yet, when you look at the difficulties a person who's blind has 
in getting a scientific education, your example is perfect 
there. I would think that a person who's disabled, who could 
get the scientific education and background would be one that 
would know the right things to develop for persons with similar 
disabilities. And what we need to have is the investment in the 
technologies plus the input from people who need them and in 
the design to get those things that will help them most to cope 
with the problems they face.
    Ms. Heumann. Yes, I agree. In addition, we're trying to 
move in the direction of something we call universal design, 
which means that the accommodations are built into and designed 
as part of the technology. When we get to that point, then many 
of our other problems will disappear. We won't have to worry 
about whether a procurement officer knows about what's 
appropriate to buy or not, because it will be like the new 
televisions. In 1994, Congress required that decoder chips be 
installed in all new televisions. Now, no one has to worry 
about it. You know that if you buy a TV sold in the U.S. after 
1994, it automatically allows for captioning.
    Mr. Porter. Right. Thank you.
    Mrs. Northup.

                        APH WORK WITH PUBLISHERS

    Mrs. Northup. Mr. Chairman, before I ask a question, I 
would just like to point out, if you look at the presentation 
we heard from Tuck Tinsley and the six initiatives on research, 
I bet when you looked at that you thought there were about 
three zeroes missing behind each one of those numbers. And I 
think that when you look at $17,000 for the primary school 
reading books, the sort of amounts we're talking about here and 
what is accomplished is because of, when you go, I hope you'll 
have the opportunity to go to this facility at some point and 
see it. It's very impressive.
    But the readers that read for the recordings are 
volunteers. It's a community based institution that's of course 
beloved in my district. But it also is because, as I pointed 
out, we have a higher percentage of, per person, a higher 
number of blind population.
    You also gain, they're in constant connection of what is 
the next need, what is the next device that would make a 
difference walking in a room, the point of reference, seems so 
small, but it's so clear when it's explained what a difference 
that would make in somebody's life. And that's why this 
facility has meant so much to our country in terms of 
developing and meeting the needs of the blind and the blind 
students.
    Specifically, though, the question I have, I would just 
like you to share with the Committee what the language about 
putting into a convertible format and making that information 
available about all of the textbook companies, that language 
that we put into our bill last year, what a difference that's 
made and what sort of progress has been made.
    Dr. Tinsley. It really has made a difference. The 
Association of American Publishers is working hard to provide 
files and data so that we can work toward this universal 
format. One of the organizations, Harcourt Brace, previously 
was not part of the Association of American Publishers. All the 
other major publishers were. These publishers are going to be 
coming up to us with something they say we'll be very pleased 
with in a couple of weeks. It's interesting that Pearson 
Education rushed to get a contract signed before I was to 
appear before Congress so I could mention that, and I just did. 
[Laughter.]
    Dr. Tinsley. But, it's made a great difference. We're 
planning a meeting in September of all the constituent 
agencies--the National Federation of the Blind, American 
Foundation for the Blind, the American Council of the Blind, 
and the publishers to come together to see where we are and see 
what we can do together. People are really looking to work 
together.
    It's very interesting because, if they don't work together, 
it's a much bigger headache. There are 28 States now that have 
braille bills. The publishers are having to provide different 
formats to all of them. So, the report language has done a 
great deal.
    Mrs. Northup. Mr. Chairman, I would like to introduce also 
Gary Mudd and Nancy Lacewell, who are by the flags there on 
this side, also from Louisville, from the Printing House.
    I have Secretary of Treasury across the hall, so I am going 
to have to leave the hearing, but thank you very much.
    Mr. Porter. Thank you, Mrs. Northup.
    Ms. DeLauro.

                   RELATIONSHIP BETWEEN APA AND RFB&D

    Ms. DeLauro. Thank you very much, Mr. Chairman.
    Let me just ask a quick follow-up question on the issue of 
the blind. What is the relationship with Recordings for the 
Blind? Is there a relationship that you all have with them?
    Dr. Tinsley. There is no formal relationship between the 
American Printing House for the Blind and Recordings for the 
Blind and Dyslexic. We work together and communicate. We have 
our file repository, and all of RFB&D's recordings are listed 
on that. However, RFB&D records textbooks for students. We 
don't record textbooks. There are a number of volunteer 
organizations that do.
    The recordings we do would be, like with this book, a 
supplement, where we're teaching a child a skill. Recording is 
a media you use if you want to hit another learning modality.
    Ms. DeLauro. I do a lot of work with them in my own 
community. They're really spectacular. It's a volunteer 
organization which, really it's amazing with what they've 
accomplished in my State of Connecticut.
    Ms. Heumann. They receive substantial funding from the 
Department of Education.
    Ms. DeLauro. They do? Okay.
    Ms. Heumann. Yes, they have received funding for a number 
of years through competitive grants. They are receiving about 
$7,500,000 right now from the Department.
    Ms. DeLauro. It's worth every penny, what we're doing 
there.
    Ms. Heumann. I think what you are hearing about today are 
major efforts that are being put forward by the Federal 
Government to help, in this case, low incidence populations of 
disabled individuals and level the playing field so they have 
the access they need to become a fully functioning part of the 
general society. There are different methods and technologies 
that different people utilize.
    Dr. Tinsley. I would just like to say that we arevery 
complementary in our relationship, and we make sure that we don't 
duplicate efforts.

                         NTID EMPLOYER OUTREACH

    Ms. DeLauro. Well, that's the point. It doesn't always have 
to be the Federal Government, if you've got these good 
operations. But as long as we know what each other is doing, so 
there's no duplication.
    Let me if I might ask a question of Mr. Davila. In the 
testimony, you talked about outreach efforts where workshops 
and training sessions were offered to just under 500 employer 
representatives and school personnel last year. Can you tell us 
a little bit about who the employers are who participated and 
how in fact do you want to try and expand the effort?
    Dr. Davila. Yes, I will, thank you. I mentioned in my 
opening statement that RIT is one of America's largest 
cooperative universities. Most students are required to have 
one or two quarters of paid work experience as part of their 
graduation requirements. This also includes students who are 
deaf at NTID. And we try to establish co-op placements as close 
to the students' home communities as possible. That means we 
have to survey the entire Nation, because we are a national 
university.
    Although about one-third of our students come from the 
eastern part of the U.S., we have students from every State in 
the Union and 23 other countries. We have a major 
responsibility to establish working relationships and 
partnerships with many different businesses. And so we develop 
training packages that employers can buy and use for their 
staff instruction, or we send our staff people into the field 
to hold workshops or provide on the spot one-on-one 
instruction. We teach employers how to accomodate a person who 
is deaf within the work environment. We do a lot of that to 
assure successful accommodation of our students and graduates.
    The second opportunity is working to develop a more 
positive attitude in understanding the unique needs of deaf 
people. We help open doors and once the door is open, a young 
well-trained person who is deaf or hard of hearing has a better 
chance to gain a footing, and then succeed. This all leads to 
the outstanding record that we have accomplished; 95 percent of 
our graduates find employment after graduation. And 70 percent 
of our graduates are in business and industry.
    Ms. DeLauro. Thank you very much.
    Thank you, Mr. Chairman.

                         BUDGET REQUEST FOR APH

    Mr. Porter. Thank you, Ms. DeLauro.
    By now the staff is saying, why aren't you talking about 
the money. So we'd better talk a little about the money.
    Dr. Tinsley, do you believe the President's budget request 
provides a sufficient level of resources to enable you to 
achieve your performance goals in fiscal year 2001?
    Dr. Tinsley. To achieve our GPRA goals, which are based on 
customer satisfaction and provision of materials, yes, sir, the 
request would address those goals.
    Mr. Porter. All right. And that's despite the fact that it 
appears to us to be a 1.6 increase, when inflation is at 2.6 
percent?
    Mr. Tinsley. Yes, sir. I'm testifying in support of the 
President's budget. [Laughter.]
    Mr. Porter. You know, it's kind of amazing for us to watch 
this. Because those who are part of a department testifying in 
respect to the President's budget always salute and are good 
soldiers. But if you're an independent agency, even if you're a 
small commission with a very small budget, you're independent 
enough to say, no, the President's budget isn't big enough for 
us. So it's very interesting for us to ask these questions.
    Ms. Heumann. We haven't told them what to say.
    Mr. Porter. Oh, no, I know. [Laughter.]
    What did you ask the Department for?
    Dr. Tinsley. Originally, our budget request was for 
$10,140,000, and then we revised it to $10,628,000. The reason 
for that is that two years ago, our budget was $8,660,000. We 
were requested to submit requests at three levels, one current, 
then 3 percent above, and then what we would like. We always 
did that. It was an effort where you have people coming 
together with task forces and identifying things that never got 
funded.
    So this budget request came in before we got the final FY 
2000 funding. We never dreamed that we would have that much or 
such a good reception.
    So next year when we come in, sir, the submission will be 
much, much more realistic to the need.
    Mr. Porter. Yes, I'll be gone, though. [Laughter.]

                             APH GPRA GOALS

    Dr. Tinsley, it appears that you're very likely to meet all 
of your performance targets. And you just said that you thought 
you could meet them again in the coming fiscal year with the 
appropriation that's there. But we congratulate you on your 
meeting the ones with current funding.
    Would you have to revise, then, your targets, or would you 
have to add additional performance indicators that would more 
specifically focus on the results of some of your new 
initiatives, such as the interactive tactile display project? 
Are you looking at this in other ways?
    Dr. Tinsley. Yes, sir. We have been working with the 
Department, and we will have five totally new targets for GPRA. 
They won't be as easy to achieve as these have. One will be a 
special issue evaluation, where we'll identify three special 
issues that we should be addressing and whether or not we're 
addressing them satisfactorily. One will be on impact 
evaluation, the impact of the products.
    We're working with a researcher who will help us get good 
data on whether we're really addressing the needs. It will be 
tough. The stuff we're saying we're working toward, and then 
coming up with things like this interactive tactile display, 
are going to determine whether or not they're satisfied with 
us.
    One will be on consumer evaluation. Another is on the 
design of our advisory services, and one will be on evaluation 
of products. We're looking at a number of indicators for each 
of these five new targets. So, we will have a totally new GPRA 
plan next year.
    Mr. Porter. Just for my edification, when you're talking 
about a screen reader, does the speed at which the human or 
synthesized voice, I assume it's a synthesized voice, is that 
the same speed that a person normally talks or is it faster?
    Dr. Tinsley. It can be synthetic speech, or it can be 
digitized regular speech. But the users, the consumers, listen 
to it much faster than you and I could understand. After a 
while, we possibly could. But the more you listen to it, the 
more you can turn up the speed, and you can control the 
squelch, so it doesn't sound like Donald Duck, and you can 
really fly.
    Mr. Porter. Yes, you can. I was thinking it's 
probablyspeeded up, sounds like the playback on my answering machine 
when I know what the message is. [Laughter.]
    Mr. Porter. Now, is there any comparison between that kind 
of reading, in other words, can you cover the same amount of 
ground by speeding it up that a person can who reads with 
sight?
    Dr. Tinsley. My colleagues at the Printing House read the 
screen much faster than I can read the print.
    Mr. Porter. They can?
    Dr. Tinsley. Yes, sir.
    Mr. Porter. That's wonderful. That's just amazing. Thank 
you.

                      USE OF EXTRA FUNDS FOR NTID

    Dr. Davila, last year Congress appropriated $226,000 above 
the President's request. How are you using this additional 
money?
    Dr. Davila. Actually, we have been averaging about 1 
percent budget increases for six years now. And we have an 
obligation for almost $1,500,000 annually for salary 
adjustments. So any extra funds that we can locate, we 
incorporate them into our basic requirements to meet salary 
responsibilities annually within the Institute.

                        BUDGET REQUEST FOR NTID

    Mr. Porter. The President's requests a 2 percent increase 
in operations, which I assume includes salaries. You've 
expressed a concern about this level and indicated you believe 
a 6 percent increase is needed to implement your strategic 
initiative successfully. Is that correct?
    Dr. Davila. Yes, sir. Our budget request originally was for 
8 percent. This would have been the first significant request 
in over six years. The reason for this is because we've seen a 
good increase in the number of students who are now qualified 
for admission to the other colleges of RIT. Years ago, 10 to 15 
percent of the deaf students were able to do that. Now it's 
over 42 percent.
    These students require greater support. We don't have 
enough interpreters. We are trying to develop technology to 
support the students in the kind of integrated environment. So 
we need to find resources for that purpose.
    Secondly, we have just recently completed the first 
extensive curriculum review in 30 years since the Institute was 
established. So we have a number of new programs that we want 
to implement. So that was the reason for this request. But we 
did not receive it. The Department recommended an operations 
increase of 2 percent. So we will have to look at what it is we 
can do with this, and then be more sure of our priorities.
    Mr. Porter. I wonder if you could submit for the record a 
specific breakdown of how you would spend the funds at the 
higher level.
    Dr. Davila. Yes, sir, we can.
    Mr. Porter. We'd like to see that, if we may.
    [The information follows:]



    We have for both of you a number of additional questions 
that we'd ask that you answer for the record. But we very much 
appreciate both of you coming here to testify this afternoon. 
You're doing a wonderful job at each institution, and we 
obviously want to provide the kind of support that you need to 
make your work successful.
    Thank you so much.
    Dr. Tinsley. Thank you, sir.
    Dr. Davila. Thank you, sir, and goodbye.
    Mr. Porter. The subcommittee will stand briefly in recess.
    [The following questions were submitted to be answered for 
the record:]



                                          Thursday, March 16, 2000.

 SPECIAL EDUCATION AND REHABILITATION SERVICES AND DISABILITY RESEARCH

                               WITNESSES

JUDITH E. HEUMANN, ASSISTANT SECRETARY, SPECIAL EDUCATION AND 
    REHABILITATIVE SERVICES
KENNETH R. WARLICK, DIRECTOR, OFFICE OF SPECIAL EDUCATION PROGRAMS
KATHERINE D. SEELMAN, DIRECTOR, NATIONAL INSTITUTE ON DISABILITY AND 
    REHABILITATION RESEARCH
FREDRIC K. SCHROEDER, COMMISSIONER, REHABILITATION SERVICES 
    ADMINISTRATION
THOMAS P. SKELLY, DIRECTOR, BUDGET SERVICE
CAROL A. CICHOWSKI, DIRECTOR, DIVISION OF SPECIAL EDUCATION, 
    REHABILITATION AND RESEARCH ANALYSIS, BUDGET SERVICE

                       Introduction of Witnesses

    Mr. Porter. The subcommittee will come to order.
    We continue our hearings on the Department of Education's 
budget with the Office of Special Education and Rehabilitative 
Services. And we have had the pleasure of having Assistant 
Secretary Judith Heumann with us for our previous hearings. Now 
this is her own hearing.
    Unfortunately, I have been called into a meeting with the 
Chairman of the Appropriations Committee, Mr. Young of Florida, 
at 4 o'clock sharp down in his office. And so I'm shortchanging 
you, I'm afraid, in terms of time. But we will cover as much 
ground as we possibly can in the time that remains.
    Madam Secretary, if you would introduce the people that you 
brought with you and then proceed.
    Ms. Heumann. This is Ken Warlick, who's our new Director of 
Special Education. He is from Kentucky and is a really great 
addition. He has very strong experience, both in special 
education and in general education programs; and in assessments 
for disabled children, which, as you probably know, is one of 
the very critical issues for us. It's one of the ways we'll be 
able to find out the progress that disabled children are making 
in school. He joined us in January and I'm thrilled he's here.
    Fred Schroeder, who, as you know, is the Commissioner 
forRehabilitation Services Administration and Kate Seelman, who's the 
Director of the National Institute on Disability and Rehabilitation 
Research are to his left. Carol Cichowski and Tom Skelly are to my 
right, who I'm sure you see much of.

                           Opening Statement

    If you want to just go ahead and ask questions and I can 
submit my opening statement for the record. [Laughter.]
    I'm certainly glad to read it, but we probably could get 
into an interesting dialogue with some of the questions.
    Mr. Porter. I think I'm going to make you do a little work 
here.
    Ms. Heumann. Okay. I've practiced.
    Well, again, formally, let me thank you very much for the 
opportunity that we've had to work with you over the last six 
years and to tell you how we have all felt that you have really 
paid great attention to our work and that, in the long run, it 
is benefiting disabled children and adults.
    The President's fiscal year 2001 budget request for the 
Office of Special Education and Rehabilitative Services 
represents a significant national investment aimed at enhancing 
education, employment, technology, and independent living 
opportunities for millions of American youth and adults with 
disabilities.
    Over the past several years, with your help and that of the 
entire Congress, we have accomplished much in the education and 
employment area for disabled people. Together we have 
reauthorized and greatly strengthened the Individuals with 
Disabilities Education Act, as well as the Rehabilitation Act 
as part of the Work Force Investment Act, and the Assistive 
Technology Act. We have made important investments which are 
producing some very positive results.
    The budget before you today focuses much needed resources 
in many of these important areas. The proposed budget of $9.3 
billion for our offices represents an increase of $430 million, 
or 4.8 percent over the fiscal year 2000 budget. Let me please 
briefly discuss each of our major accounts.

                           SPECIAL EDUCATION

    Our request for special education is $6.37 billion, or a 
5.5 percent increase over the current year appropriation. This 
includes a significant increase in funding for the Part B 
Grants to States program, as well as increases for Grants for 
Infants and Families, State Improvement, Research and 
Innovation, Technical Assistance, and Parent Information 
Centers.
    We believe that the requested increase in the formula grant 
program must be closely linked to targeted increases, in the 
national activities programs. An increase in the Part B State 
Grants program alone, we believe strongly, will not be enough. 
The national activities programs funded under Part D are 
absolutely essential to ensure the success of States and school 
districts in meeting the educational needs of disabled 
children.
    For example, through our National Activities programs, we 
are able to turn research into practice in critical areas, such 
as positive behavioral approaches and interventions that lead 
to safer school environments; and to turn research on reading 
into practical training for teachers, which results in children 
learning how to read. We are able to train and support parents 
so they are more involved in the education of their children 
and can become more involved in local education reform 
activities. We are also able to offer teachers and school 
officials greater professional development opportunities in 
critical need areas, as identified by the States.
    Such areas would include inclusive education methods, 
approaches for assuring appropriate accommodations for disabled 
students and their curricula, and how to include disabled 
students in State and local assessments.
    The Administration is requesting $5.28 billion, a $290 
million increase for Special Education Grants to States. At the 
requested level, the States would receive an average of $827 
per child, or 13 percent of the national average per pupil 
expenditure for serving children with disabilities. Although 
money alone will not improve educational results for children 
with disabilities, this increase can assist State and local 
educational agencies in addressing critical issues in improving 
services for children with disabilities.
    For example, the Department of Education consistently finds 
deficiencies when it monitors States' compliance with the IDEA 
in areas such as general supervision, particularly complaint 
resolution and State monitoring systems, and placement of 
students in the least restrictive environments. These are 
persistent deficiencies across the country that require greater 
attention from all of us.
    Today we can help States meet their responsibilities to 
hold school districts accountable for educating disabled 
children. This results in better outcomes.
    Our request also includes an increase of $8.6 million for 
Grants for Infants and Families to help State and local 
agencies provide early intervention services when they can be 
critical to improving the results of children. We are 
requesting an increase of $10 million for State Improvement 
grants. You may remember this is the program we created under 
the IDEA amendments to assist States in partnership with their 
stakeholders, to reform and improve their systems for providing 
educational results for children.
    Currently, 18 States have a State Improvement grant. And we 
expect to fund another 6 or 7 in the current year. Our request 
would fund an additional 15 awards. Frankly, this year we've 
received 22 applications from States, and under the 2000 budget 
that we received, we'll only be able to fund 6 or 7.
    The President's 2001 budget includes a $10 million increase 
for Research and Innovation, to support projects that 
demonstrate how effective interventions and early 
identification can improve results for children with reading 
difficulties or behaviors that lead to significant discipline 
problems as individuals get older. Also based on our monitoring 
efforts and reports, such as the recent National Council on 
Disability report on enforcement of the IDEA, we believe that 
additional technical assistance resources are critically needed 
to help States. The President's 2001 budget includes an $8 
million increase for State Technical Assistance and 
Dissemination awards.

                       Parent Information Centers

    We are asking for a much-needed increase of $7.5 million 
for the Parent Information Centers. You visited with them 
earlier this year.
    As I have traveled the country and met with parents, I've 
become increasingly aware of the need for greater commitment of 
resources in our parent information centers. Parents need 
resources and help. Our parent centers are a critical resource 
for them.
    Mr. Chairman, these special education investments are only 
a part of the Administration's overall efforts to improve 
educational results for all students. As you have heard from 
Secretary Riley last week, there are also anumber of other 
critical educational initiatives in the fiscal year 2001 budget, such 
as continuation of the Class Size Reduction program and school 
construction programs, all of which greatly benefit disabled children.

            Rehabilitation Services and Disability Research

    The Administration is also requesting $2.8 billion, a $91.7 
million increase, for the Rehabilitation Services and 
Disability Research account to increase employment and 
independent living opportunities for individuals with 
disabilities. The request includes funds to expand access to 
independent living centers and funds to support new initiatives 
focusing on information technology. The request includes $2.4 
billion for Vocational Rehabilitation State Grants to assist 
States to improve the employment outcomes of individuals with 
disabilities.
    The Vocational Rehabilitation program has undergone 
significant changes that have presented new challenges to 
States.
    [The information follows:]



    Mr. Porter. Ms. Heumann, I wanted you to get a chance to 
present the statement. Now we have a vote, unfortunately. And I 
don't want Ms. DeLauro to miss her opportunity to ask any 
questions she might want to ask.
    So what I think I'll do, if I may, is interrupt at this 
point and call on Ms. DeLauro so she gets a chance, and I'll go 
vote and come back and try to get in 10 or 15 minutes of 
questions.

                     Funding for special education

    Ms. DeLauro. Thank you very, very much, Mr. Chairman.
    Let me, I have actually three questions. The special ed 
funding is needed in my home State of Connecticut. We have 
about 76,000 children in Connecticut who use special education 
services. The average cost for a special ed pupil is two times 
the amount of a non-special ed pupil. As a result, Connecticut 
needs to come up with close to $1 billion to serve children 
under the special ed program.
    The Administration has a 5.5 percent increase over last 
year's amount. You believe in your testimony that the requested 
increases for programs will assist States in the delivery of 
special education. Let me ask in your opinion if you think this 
is enough, and will individual States get a substantial 
increase at this level?
    Ms. Heumann. Well, I believe that we've seen a substantial 
increase of about 115 percent over the last four to five years. 
We believe that the increase that the Administration is asking 
for, combined with other additional requests of funding for 
Special Education that we have been asking for, plus the 
Administration's overall education budget request, such as our 
request for Class Size Reduction, will in fact substantially 
enable disabled children in States to receive appropriate 
services.
    Ms. DeLauro. Okay, so you think you will have an adequate 
amount.
    Ms. Heumann. I think, you know, the Secretary in his State 
of Education Address a couple of weeks ago talked about the 
importance of continuing to move forward towards the 40 percent 
goal. We obviously concur with that.
    I think at this point right now, as we're looking for 
additional funds in Part B, it's really important that we focus 
on a number of additional issues, which I did try to address in 
the testimony. Many local school districts, superintendents, 
principals, and teachers, are not just asking for additional 
funds. They're also asking for practical information regarding 
how they can most effectively serve disabled children. That's 
why we're also emphasizing things like our State Improvement 
grants, which can provide up to $2 million for a State, of 
which 75 percent of those dollars have to be used for 
professional development for general education as well as 
special education teachers.
    I think there are a number of other programs that we have 
built in increases for here. One thing that I want to say is 
that, over the last couple of years, we have seen substantial 
increases in Part B above the President's request. However, we 
have not seen the same level of increase in what we call our 
National Activities, or the Part D part of the budget. I really 
encourage you to talk to your constituents. I know that when 
you go back to your districts, people are talking to you about 
the need for more money. If you also get into substantive 
discussions with them, as I do, and talk to them about things 
like professional development, and the need to have funds that 
can take research to practice in areas like reading and 
positive behavioral interventions, they will all very eagerly 
talk to you about how they need that too.
    I think many of the people, and I'm not being critical, 
don't understand the account that we work with, and that there 
is a Part B and there is a Part D. When you talk to them about 
the need for discretionary dollars, they will argue for that, 
also.

                            Related Services

    Ms. DeLauro. In terms of the health related services 
provisions for the IDEA reauthorization, have you done any 
calculation of the cost to implement those kinds of health 
related services, the non-instructional----
    Ms. Heumann. Related services?
    Ms. DeLauro. Yes.
    Ms. Heumann. Related services have been a part of the IDEA 
since its inception in 1975. In addition to IDEA funds, I 
believe about $2.5 billion or $2.6 billion is coming in from 
Medicaid to provide dollars for related services, speech 
therapy, occupational therapy, etc.
    What we are trying to do is work with the Health Care 
Financing Administration (HCFA) and with school districts to 
make sure that school districts understand appropriate ways of 
billing for dollars, and that, in fact, they're able to draw 
down the Medicaid dollars, where appropriate. That way children 
can get appropriate related services and it's not so expensive 
for the district.
    Mr. Porter. Would the gentlelady yield on that for just a 
second?
    Ms. DeLauro. I'd be happy to yield.
    Mr. Porter. If you added other services, including 
Medicaid, into the direct grants, State grants, and then saw 
what percentage that is, how far along toward 40 percent would 
that take us, do you know?
    Ms. Heumann. I think, with Medicaid, it would be about 15 
or 16 percent. And quite frankly, I don't have the figure for 
other programs. I think the Medicaid dollars are the largest 
amount of dollars that supplement IDEA funds.
    Mr. Porter. I thank the gentlelady.

                      NATIONAL THEATRE OF THE DEAF

    Ms. DeLauro. What I'm going to do is just submit 
thisquestion to you. It's about the National Theatre of the Deaf in 
Chester, Connecticut. Thirty-three years of support by the Department 
of Education, stunned that in fact that they are not awarded any 
funding in this cycle. It was founded in 1967. Department of Education, 
you know the history behind it, so I won't go into it.
    But I'm going to get this to you, they were told in 1997 
that we wanted to deal in a different way with the awards, 
where there was a specifically targeted award. And in fact that 
they were assured that the grant process would not be a threat 
to their program and services.
    My understanding is that there was one grant awarded for 
$800,000 and it means that this National Theatre of the Deaf, 
which did not receive any money, is going to effectively be 
shut down. So what I don't want to do is, this is a specific 
issue related to my community and district and State, so I will 
submit that for the record, and my hope is that you'll be able 
to get back to me with some explanation of what the story is 
here.
    Ms. Heumann. I can tell you briefly that the grant was 
competed this year, and I did very much review the results of 
the competition, and they did not come in the winner of the 
competition. We'll get you more information on it, but that's 
the bottom line.
    Ms. DeLauro. Please do. This is an effort with a 33 year 
record of success. And it's just really stunning to understand 
why, given this new process, that they are excluded from it.
    I won't take any more of the Committee's time and the 
Chairman's time. Thank you, Mr. Chairman.
    Mr. Porter. Thank you, Ms. DeLauro.

              COLLEGE STUDENTS WITH LEARNING DISABILITIES

    I read recently a survey that found that 1 out of every 11 
college freshmen claims to have a disability. Most students 
reported a learning disability. And these rates have more than 
doubled in just 10 years.
    In 1988, 15 percent of such students said they were 
learning disabled. In 1998, this figure jumped to 41 percent of 
such students. And these are self-reported statistics.
    What do you make out of this? Is there something that we 
don't understand?
    Ms. Heumann. I think there are a number of things going on. 
One is, the success of the IDEA means that there are more 
disabled students who are going into higher education. And if 
you look at the population of about 6.4 million children, about 
50 percent of that population are children with learning 
disabilities. So, the fact that we're seeing an increase in the 
number of students who are identifying themselves as needing 
supports in school because they are learning disabled is not 
necessarily bad.
    In addition, you may find this in your State, as I have 
been visiting university programs around the United States, 
particularly those that have good disabled students programs, 
many of them have programs that are helping to assess students 
who may have learning disabilities. There are a reasonable 
number of adults who were never appropriately identified when 
they were younger who have learning disabilities. In some 
cases, as in the case of college students--four year university 
students--they got by in high school. When they get to college, 
many of them hit up against a wall.
    One of the programs that we fund, HEATH, which is the 
higher education technical assistance program, will also 
address this issue. So there are new students coming in who 
weren't previously identified. I think both of these trends are 
part of the issue.
    One of the things I've been trying to do is also get the 
universities to do more work with the public schools to allow 
them to get a better understanding of the population that they 
are first coming in contact with at college. I believe that 
some of these individuals certainly should have been receiving 
services early on.
    Mr. Warlick. I would also like to add that I think that, 
with the awareness of the Americans With Disabilities Act, 
there is increased attention to individuals with disabilities. 
This has contributed to increased admissions. Many institutions 
of higher education have actively recruited individuals with 
disabilities.
    Also in the previous testimony, we heard a great deal about 
changes in technology. Many of the changes in technology have 
enhanced the ability of individuals who previously would not 
have had opportunities for success in higher education to have 
that success.

                               CONCLUSION

    Mr. Porter. I'm really sorry, I thought we would have at 
least 15 minutes. I'm going to have to go down and vote, and I 
probably could not get back in time to really pursue the 
questions. I think we're going to have to have you answer the 
questions in the record. I'm not concerned about that, per se, 
but I do regret not having more time to discuss these matters 
face to face in some detail.
    You're doing a wonderful job, and we want to keep working 
with you and doing the best we can to provide the resources you 
need. And I do get your message about other parts besides the 
State grants.
    Ms. Heumann. That would include programs such as parent 
training programs.
    Mr. Porter. We'll do our best.
    The Subcommittee will stand in recess until 2:00 p.m. 
Tuesday next.
    [The following questions were submitted to be answered for 
the record:]



                                           Thursday, April 6, 2000.

              OFFICE OF ELEMENTARY AND SECONDARY EDUCATION

      OFFICE OF BILINGUAL EDUCATION AND MINORITY LANGUAGES AFFAIRS

                               WITNESSES

MICHAEL COHEN, ASSISTANT SECRETARY FOR ELEMENTARY AND SECONDARY 
    EDUCATION
ARTHUR LOVE, ACTING DIRECTOR, OFFICE OF BILINGUAL EDUCATION AND 
    MINORITY LANGUAGE AFFAIRS
JUDITH JOHNSON, DEPUTY ASSISTANT SECRETARY FOR ELEMENTARY AND SECONDARY 
    EDUCATION
THOMAS CORWIN, ACTING DEPUTY ASSISTANT SECRETARY FOR ELEMENTARY AND 
    SECONDARY EDUCATION
THOMAS SKELLY, DIRECTOR, BUDGET SERVICE
LONNA JONES, ACTING DIRECTOR, ELEMENTARY, SECONDARY, AND VOCATIONAL 
    ANALYSIS DIVISION, BUDGET SERVICE

                    Opening Statement By Mike Cohen

    Mr. Cohen. Thank you, Mr. Chairman. I am happy to introduce 
my colleagues. I am joined today by Tom Skelly, the 
Department's budget director and Lonna Jones from the Budget 
Service. With me from the Office of Elementary and Secondary 
Education (OESE) is Deputy Assistant Secretary Judith Johnson, 
and my Acting Deputy Assistant Secretary Tom Corwin, and Art 
Love from the Office of Bilingual Education is at the end of 
the table.
    Mr. Chairman, it is an honor to appear before this 
committee today. I would like to summarize my opening statement 
and place the full statement in the record if I might. More 
than a decade has passed since the 1989 Charlottesville 
National Education Summit helped launch the nationwide movement 
to strengthen elementary and secondary education. Since that 
time, virtually every state has set academic standards, and 
State and local school districts are working to align 
assessments, curricula, professional development, and school 
accountability with those standards.
    National, State, and local leaders are working in 
partnership with parents, educators and community leaders in a 
nationwide effort to strengthen our schools. We have clear 
evidence that this standards movement is already having a 
beneficial impact on elementary and secondary schools. 
Nationwide, math and reading scores have been increasing, 
particularly for students in the highest poverty schools. In 
States and school districts where this standards-based 
performance approach has been implemented over sustained 
periods, such as North Carolina, Maryland, Texas and 
Connecticut, and Philadelphia, Memphis and other cities, 
students from impoverished backgrounds have demonstrated 
significant gains. More students are taking and passing 
rigorous advanced placement tests.
    We have made a lot of progress in that area, yet we still 
have a long way to go to close the achievement gap between 
advantaged and disadvantaged students and to raise achievement 
levels overall. Today we are at a critical juncture in this 
national standards movement. In growing numbers of States and 
school districts, these new education standards are beginning 
to really count for schools and students. The promise of the 
standards movement has always been that higher standards will 
be used to lift schools and students up, not merely document 
their weaknesses. We must make the essential investments to 
help the more than 15,000 school districts and 100,000 schools 
in America measure up.
    The fiscal year 2001 budget request for the Office of 
Elementary and Secondary Education is $17.2 billion, an 
increase of $2.8 billion or 19.5 percent over last year's 
budget. This request would fund the first year of activity 
under the reauthorized Elementary and Secondary Education Act 
(ESEA), which both Houses of Congress are now taking up.

                  REQUEST FOR TEACHER QUALITY PROGRAMS

    Let me highlight some of our major requests. First, in the 
area of teacher quality, we need 2.2 million new teachers over 
the next 10 years. We need to do everything that we can to make 
sure that these new teachers are prepared to teach all of their 
students to higher standards. We have requested $1 billion to 
provide high quality professional development, including 
mentoring and other support for new teachers and to help local 
communities recruit and retain high quality teachers. This $1 
billion proposal includes a $690 million Teaching to High 
Standards grant program for States and districts that would 
replace the current Eisenhower Professional Development 
program. This program would provide teachers with sustained 
standards-based professional development and helps States and 
school districts align curricula with State standards. We are 
also requesting funding for new national activities that would 
support the recruitment and retention of teachers, particularly 
in high poverty school districts.

              EXPANDED LEARNING OPPORTUNITIES FOR CHILDREN

    Second, we need to continue investing in programs that 
accelerate change and expand learning opportunities in our 
schools. The Administration is proposing to double funding for 
the 21st Century Community Learning Centers program to $1 
billion. These funds would provide safe, high-quality 
afterschool and other extended learning opportunities for 
nearly 2.5 million children.

                          CLASS SIZE REDUCTION

    The President's budget would also add $450 million to the 
Class Size Reduction program. This would enable local 
communities to hire nearly 49,000 highly qualified teachers and 
give students the clear benefits of smaller classes, such as 
more personal attention, more orderly classes, and a more solid 
foundation in the basic skills. In addition, the Administration 
is requesting a $20 million increase in the successful 
Comprehensive School Reform Demonstration program for a total 
of $240 million. This would provide States with funding to help 
nearly 3,300 schools implement comprehensive school reforms 
based on reliable research and effective practice.

                          SCHOOL MODERNIZATION

    Third, we must address the need to modernize our schools. 
Schools and teachers can't reach for excellence in schools that 
are overcrowded and in disrepair. We are proposing a new school 
renovation grant and loan program carried out under ESEA, and 
supported with $1.3 billion in new funding that we are seeking 
support for from this committee. The program would support 
urgently needed renovation projects in some 5,000 schools 
around the country. It would complement a larger proposal that 
the Administration has already made to subsidize almost $25 
billion in school construction bonds.

               SAFE AND DRUG-FREE SCHOOLS AND COMMUNITIES

    Additionally, students need to be educated in learning 
environments that are safe and drug free. The Administration 
has requested $650 million for the Safe and Drug Free Schools 
and Communities program. This request includes a $40 million 
increase for the Safe Schools, Healthy Students Initiative, a 
partnership between the Department of Education, Justice 
Department and Health and Human Services to help communities 
develop comprehensive, community-wide strategies to create safe 
learning environments in schools and to promote healthy 
childhood development.

                SMALL, SAFE AND SUCCESSFUL HIGH SCHOOLS

    The Administration is also requesting $120 million for the 
Small, Safe and Successful High Schools program. Research 
demonstrates that small high schools, schools with 
approximately 600 students, help increase achievement in post 
secondary enrollment and reduce dropout rates and discipline 
problems. Together with funding already in this year's budget, 
these funds would help create smaller learning environments in 
approximately 700 high schools through such strategies as 
schools within schools, houses or career academies.

                            TITLE I REQUEST

    We must also continue to invest in programs designed to 
close achievement gaps. The OESE budget includes funding to 
help our neediest students. This includes a request for $8.4 
billion in the Title I program to help more than 13 million 
students master the basic skills. To help meet the President's 
long-standing goal of ensuring that all children can read by 
the end of the third grade, the budget also provides $286 
million for the ReadingExcellence program.

 IMPROVED EDUCATIONAL OPPORTUNITIES FOR HISPANICS AND NATIVE AMERICANS

    One key Administration objective is to improve educational 
opportunities for Hispanic Americans. Many of the programs in 
OESE from Title I to the afterschool program provide services 
to large numbers of Hispanic students. In addition, our budget 
requests significant increases in the Migrant Education 
Program, in the High School Equivalency Program (HEP), and in 
the College Assistance Migrant Program (CAMP). We are also 
asking for significant increase in Indian education programs to 
improve educational opportunities for American Indian students.

                       ACCOUNTABILITY FOR RESULTS

    Finally, while we think that it is very important that we 
invest more in our schools, we also must demand more of them. 
Our ESEA reauthorization proposal strengthens accountability 
for results, particularly in Title I. Under current law, by the 
beginning of the next school year, every State must have in 
place challenging standards and aligned assessments in reading 
and math, and must hold schools accountable for helping 
students meet the standard. Already, over 8,000 schools 
nationwide have been identified as needing improvement, yet our 
own evaluation shows that half of those schools report that 
they have received no additional help, no additional resources 
or training, no technical assistance to address the problems 
that they face.
    The President's budget requests $250 million for Title I 
accountability grants, an increase of $116 million over the 
funding level that was provided for this year. These funds will 
be targeted to low-performing schools to help them turn around. 
The investments that I have just described, as well as others 
included in the President's budget, will help States and school 
districts make standards-based performance a reality in every 
school in the country.
    Working together, the Congress and the Administration could 
help eliminate, once and for all, what Secretary Riley has 
often called the tyranny of low expectations.
    Mr. Chairman, thank you for giving me the opportunity to 
appear before this committee. I am prepared to answer any 
questions you and your colleagues might have.
    Mr. Porter. Thank you, Mr. Cohen.
    [The information follows:]



    Mr. Porter. Mr. Love.

                    Opening Statement by Arthur Love

    Mr. Love. Good afternoon, Mr. Chairman, ranking member Obey 
and Mr. Hoyer. I would like to thank you for the opportunity to 
testify this afternoon. I would like to submit my prepared 
remarks for the record. They are more comprehensive than the 
few summary comments I wish to make. I am also available for 
any questions the committee may have.
    Our world is rapidly changing. The computer and Internet 
revolution affect our daily lives, including our schools, in 
ways that we could not imagine or anticipate 10 years ago. To 
keep up with this revolution and to support the booming U.S. 
economy, we must ensure America's children are well educated.
    Because of our thriving economy as well as our record as a 
symbol of freedom everywhere in the world, we attract people, 
families and children from all over the globe. They come into 
our schools and we have the responsibility to educate them. 
Those people whose native language is not English must learn 
English to become fully participating members of our society, 
and must learn content subjects, math, reading, science and 
others at a high performance level. If we do not accomplish 
this, we will lose our international competitive edge. Our 
children, all of our children, are this Nation's future, our 
future.

                          BILINGUAL EDUCATION

    In past years, many complaints have been aired about 
bilingual education programs. I would like to make a few 
general observations. One, the LEP population, limited English 
proficient (LEP) students in our schools is a fact. It is 
growing rapidly and it must be dealt with. This includes many 
languages, as well as Spanish. Two, the Office of Bilingual 
Education and Minority Languages Affairs (OBEMLA) and the 
Department of Education bureaucrats did not create the legal 
obligation to provide appropriate education for LEP students. 
This process began with the United States Supreme Court in Lau 
versus Nichols in 1974, and was further developed in later 
court decisions.
    Three, past failures do not excuse failure to address 
present reality. If, for example, children were wrongfully 
placed in bilingual classes because of their Hispanic surname, 
even though fully English proficient, this mistake does not 
excuse ignoring the very real needs of true LEP students.

                         INSTRUCTIONAL METHODS

    Four, OBEMLA does not mandate instructional methodologies 
States or LEAs make these decisions. California, despite 
Proposition 227, is still a huge Title VII grant applicant and 
these grants are in compliance with both the Title VII 
requirements and Proposition 227 and California State law.
    We have, at this time, because of the juxtaposition of two 
movements, a special opportunity which promises to improve 
education for LEP students. First, Congress and the Government 
Performance and Results Act demand that we address real 
accomplishments by collecting data and meeting targeted goals. 
Second, the standards-based education reform activities focus 
on the concept of measuring real student achievement and 
developing policy based on critical evaluation and assessment 
data, that is research-based and data-driven decisionmaking 
from schools all of the way to Washington.

                        DUAL IMMERSION PROGRAMS

    Finally, the opportunity of uniting many different 
approaches under the Secretary's bold vision of 1,000 new dual 
immersion programs in the next 5 years is truly a revolutionary 
concept. This approach redirects energy to a discussion of what 
is truly the ideal result, every American student knowing at 
least two languages and the corresponding benefit that would 
accrue to our international economy. OBEMLA's contribution to 
this scenario is to be a center for excellence at the Federal 
level for LEP education. Not only do we administer the Title 
VII grant programs, including the foreign language assistance 
program and immigrant education, we also fund the national 
clearinghouse for bilingual education and provide technical 
assistance nationally.
    By the peer review method of selecting our competitive 
grants, we seek to find the best models and practices that can 
then be disseminated to the entire LEP community. TitleVII can 
only support a small percentage of the needs of LEP education, so we 
try to make it a model of the best we can. Our efforts are focused on 
building in accountability systems and on building capacity in the 
community. This way we continue to fund only programs that work, and we 
leave behind something that helps when Federal project funds cease. 
OBEMLA is also trying to reach those communities most affected by, one, 
increased numbers of LEP students and, two, those who have not received 
Title VII funds in the past or in the recent past.

                             STRATEGIC PLAN

    In closing, I would like to observe that LEP students fall 
into the category of special populations in the Department of 
Education. OBEMLA has taken the lead role on this topic this 
year, through objective 2.4 of the Department's Strategic Plan. 
Other examples of special populations are those in special 
education, Indian education and migrant education. The 
underlying theme is that students in these areas have some 
special and additional needs apart from the mainstream 
students.
    The Department of Education's mission statement reads, 
``Our mission is to ensure equal access to education and 
promote educational excellence throughout the Nation.'' To 
ensure equal access is the agenda of the Department. In that 
agenda, the special populations piece is, in our opinion, the 
cutting edge. The challenge is making equal access apply to all 
students. We would like to think that we are the ones who bring 
up issues of inclusion over and over and over so that everyone 
understands that ``all'' means ``all.''
    We need educational success nationwide. We cannot afford to 
have only pockets of excellence. We need equal opportunity for 
all students. This is how we see our mission, and my prepared 
statement lays out how we are prepared to do this important 
work. Thank you for this opportunity to appear before you.
    Mr. Porter. Thank you, Mr. Love.
    [The information follows:]

                        NATIONAL EDUCATION GOALS

    Mr. Porter. Secretary Cohen, you began by talking about the 
Charlottesville conference, and the goals set out for us 8 
years ago by President Bush. We just had the National Education 
Goals Panel before us last week. While this may be a half-full, 
half-empty kind of a look, they assured us that the United 
States had met none of the 8 goals that were set, that no State 
had met all eight of the goals, and that there were many areas 
where the progress was not what we would hope for. Do you agree 
with that statement? And why do you see it so much more 
optimistically than they apparently do?
    Mr. Cohen. Thank you, Mr. Chairman. I actually don't think 
that there is a huge difference between how I see it and how 
the Goals Panel sees it. I don't think that we have made nearly 
enough progress in meeting those goals at the national or at 
the State level. That, in part, suggests the importance of 
setting realistic goals. If there is another summit, we should 
all keep that in mind.
    What I tried to suggest is that we have seen progress where 
people often overlook it. The fact of the matter is if you look 
at the evaluation of Title I, if you look at the National 
Assessment of Educational Progress (NAEP) scores for students 
from high-poverty schools, over the past 4 to 6 years, students 
in the highest-poverty schools, 75 percent poverty or more, 
have made about a year's gain in reading and in math. That is 
not to say that we don't have a lot more to do, but it is to 
say that where we have set high standards and invested the 
resources, where we have focused attention on real reform, we 
have been able to make a difference. It tells me that we need 
to continue moving in the direction in which we are going.
    Mr. Porter. If you look at the last TIMSS test at the other 
end of the scale, we did not do very well in either math or 
science. If you assume that economically a great deal of the 
future of this country lies in those exact areas, in educating 
our children to take the high-tech jobs that we expect this 
economy to produce for them, what are we doing particularly in 
math and science to get ourselves to a competitive level with 
the rest of the world?
    I know that we are fortunate in that many of the best minds 
across the world come to our society. That I think has sort of 
saved us for the deficiencies of our own educational system. We 
need to have people that can do the work that is ahead if we 
are going to keep our competitive edge.
    Mr. Cohen. I agree. I think there are a couple of things 
that we are doing and need to continue to do. They are quite 
diverse kinds of actions.
    First of all, the Third International Mathematics and 
Science Study (TIMSS) data show that in the 12th grade, our 
students rank near the bottom of the world. In fourth grade, 
our students are doing pretty well in math and science. In 
part, what happens in between is a function of several things. 
The analysis of U.S. curricula shows that in math, it is a mile 
wide and an inch deep. It is very repetitive so that students 
essentially take the same material over and over again, never 
quite mastering it, but each year having to do it again. I 
think that is why my son tells me that math is boring all the 
time.
    So we need to address curricula, and for States to raise 
standards is a critical piece of that. There are about 10 
States that are working with Achieve, a private nonprofit 
group, trying to set standards for 8th grade math that are tied 
to the TIMSS findings so they can use that to strengthen 
curricula.
    We also need to invest more in high-quality professional 
development. The analysis that has been done of how other 
countries provide professional development for their teachers 
suggests that we need professional development that is much 
more intensive and collegial and ongoing and much more 
rigorous. We need to provide professional development that 
speaks to the academic and subject matter knowledge of teachers 
in addition to the pedagogical skills. Our proposal in Title I 
of the ESEA, our Teach to High Standards proposal, tries to 
provide resources for that.

                           HIGH SCHOOL REFORM

    There are a couple of other things that are important. At 
the high school level, we have proposed to increase funding for 
AP classes so that more students, particularly disadvantaged 
students, have access to challenging advanced placementcourses. 
That should make a difference.
    Secondly, small high schools are places where students 
achieve at higher rates than those in large and impersonal high 
schools. And so we have an initiative to help larger schools 
create schools within schools and settings that are more 
conducive to achievement.

                      SAFE AND DRUG--FREE SCHOOLS

    Mr. Porter. We require, under the Safe and Drug Free 
Schools Program, a 10 percent investment of funds in education 
partnerships with law enforcement. One of the programs that has 
been invested in very heavily by many school districts is 
Project DARE, and yet we see a recent study showing that the 
long-term effect of DARE is zero or negligible. What are we 
doing to develop programs that might work and to get schools to 
invest in those kinds of programs rather than ones that don't 
work? And is this requirement for 10 percent a good requirement 
in any case?
    Mr. Cohen. I think the requirement is good. I think the 
more we can do to build partnerships between schools and law 
enforcement, the better off we are. The Safe Schools/Healthy 
Schools Initiative that we have in partnership with the Justice 
Department and the Department of Health and Human Services goes 
well beyond that 10 percent figure overall in terms of 
providing funding for those kinds of partnerships.
    With respect to the DARE program and others like that, I am 
aware of the evaluation that questions the effectiveness of 
DARE. I also know that this is a highly controversial topic. 
Many people like the DARE program. It provides information and 
partnerships with law enforcement. It is easy for schools to 
administer. There is not a ton of research about effective 
programs in this area. We have some evidence, and the evidence 
basically suggests that programs that are of sufficient 
duration and sufficient intensity, that provide information, 
that model appropriate behavior for students, and that are 
sustained over time can make a difference.
    Our reauthorization proposal tries very hard to encourage 
school districts to invest in those kinds of models, first, by 
requiring that school districts undergo a ``needs assessment,'' 
identify the problem areas that they have, and use research-
based approaches to address them.
    Secondly, we try to concentrate the Safe and Drug-Free 
Schools funds in sufficient amounts so that school districts 
have enough money to implement effective programs.

                  COMPETITION FOR DISCRETIONARY GRANTS

    Mr. Porter. This is a question for both you and Mr. Love. 
We have a number of competitive grant programs, you referred to 
some of them in your bilingual area in your opening remarks, 
Mr. Love. I find a number of members who will tell me that 
their more rural school districts don't have the expertise to 
apply for competitive grants and find themselves at a very 
severe disadvantage in receiving those kinds of grants, and 
what can we do to give them some help? Do we have any help for 
that kind of situation within the department; and do you find 
this to be factual, that they are not able to compete 
successfully, or not?
    Mr. Cohen. I have several responses, Mr. Chairman, because 
we have heard that concern as well, and on its face it seems 
credible. We have done some analyses, and we would be happy to 
supply it to you, that suggest that many rural school districts 
are more successful on competitive grant programs than you 
might imagine, so we have taken a look at that.
    Secondly, increasingly, we are looking for ways to provide 
assistance to school districts in applying for and in competing 
for competitive programs. Probably the best example is the 21st 
Century Learning Centers program. This year we held at least 
one workshop in every State, and I think probably it totaled 
about 75 workshops. I am not positive about that number 
nationwide, giving assistance, a day-long workshop assisting 
people from school districts all over the State on what works, 
et cetera.
    So we have been trying to do that kind of outreach. We have 
had a partnership with the Mott Foundation that has helped 
considerably. We also know that in the ESEA, both the House and 
the Senate are looking at proposals that would give small rural 
school districts a bit more flexibility in the formula funds 
that they get so that they can combine funds from different 
programs to achieve a sufficient scale to make a difference. We 
are not sure that either of the approaches that we have seen so 
far is the right one, but we are willing to work with the 
Congress to find ways to address that problem.

                BILINGUAL EDUCATION COMPETITIVE PRIORITY

    Mr. Love. I would like to address that question.
    We agree that there is a problem with some school 
districts, particularly school districts that have not 
previously enrolled large numbers of LEP students in their 
districts, being able to compete on an equal basis for grants. 
We have been trying to figure out a strategy to deal with it. 
One of these approaches has been to put a set-aside in our 
reauthorization proposal that dealt specifically with this type 
of district.
    Even though we don't know where that will end up at this 
point in time, we have also been looking at our three Improving 
America's Schools conferences as an opportunity to provide 
technical assistance. We are going to have a session on day 3 
that will aim specifically at new applicants, and we are going 
to work with the National Clearinghouse to try to develop some 
targeted mailings to districts that we can identify as being 
that type of district, to try to encourage these people to come 
where we can discuss the issue of how to write a grant proposal 
that would be competitive with more practiced States and 
applicants.
    Mr. Porter. I understand what the set-aside is, but does 
that mean you have different standards for a smaller or rural 
district than others?
    Mr. Love. In the legislative proposal, we would try to set 
aside some funds. It would be a competitive priority for some 
of these proposals.
    Mr. Porter. Even if they weren't up to standard?
    Mr. Love. They would receive additional points in the 
scoring. We do this for things like enterprise zones right now.
    Mr. Porter. Thank you, Mr. Love.
    Mr. Obey. I would tell the subcommittee we are operating 
under the 8-minute rule, and we have combined the Bilingual and 
Office of Elementary and Secondary Education into a single 
panel for the afternoon.
    Mr. Obey. Thank you, Mr. Chairman.

                        SMALL SCHOOLS INITIATIVE

    I would like to make one point with respect to the Small 
Schools Initiative, which this subcommittee funded last year. 
As the Department develops the program guidance on this 
initiative, I hope it will be clear that the intent in funding 
this program was to give all large high schools enrolling over 
1,000 students a fair shot at benefitting from that funding, 
not just the very largest schools of over 2,500.
    And secondly, I want to make sure that the 
agencyunderstands that this funding is not supposed to be focused--
well, let me put it this way. While it certainly isn't supposed to be 
focused on affluent districts, neither is it supposed to be focused 
exclusively on the poorest inner city schools because as Columbine has 
shown, there are many schools that fall in between that can use help 
but are not necessarily the poorest of the poor. I would hope that the 
agency's guidelines, when they come out, recognize that fact, clearly.
    Mr. Cohen. Point made and clearly understood. We have been 
trying to work closely with your staff in developing the 
guidelines. Whenever we seem to be falling short of 
expectations, she makes sure that we remember what the 
expectations are.
    Mr. Obey. She just left yesterday to have a baby so I am 
trying to remind you instead.
    Mr. Cohen. Thank you.
    Mr. Obey. Secondly, the chairman mentioned the fact that 
the NAEP panel testified that no State has fully achieved all 
of the national educational goals set. We all know that teacher 
expertise is a critical component of quality education. And yet 
a recent survey conducted by Education Week and the Pew 
Charitable Trusts found that States are playing an elaborate 
shell game where they set standards so that those can enter the 
profession at the front end and keep the door cracked open at 
the back.
    Two examples: Texas, nearly 43,000 teachers, 17\1/2\ 
percent of the State teaching force emergency waivers. We have 
all heard what has happened in California, two of the biggest 
States in the union where they have had immense problems.

                              BLOCK GRANTS

    I guess I would simply ask if States are doing this kind of 
manipulating, do you have any belief that they will be able to 
achieve better results if we give them greater flexibility 
using Federal funds as proponents of the Straight A's Act and 
other block grant approaches would have you believe?
    Mr. Cohen. No, I don't have confidence that the solution to 
either ensuring that there are higher-quality, better qualified 
teachers in the classroom or more rapid increase in student 
achievement lies in moving in the path of the Straight A's 
approach that has no clear purpose, no targeting of funds, and 
no accountability.
    In our reauthorization proposal, in contrast, we would 
require that States that now permit teachers who are on 
emergency credentials to be in the classroom, that at least in 
Title I schools, that practice be phased out and phased out 
quickly. We have tightened the provisions in the Class Size 
Reduction program so that no uncertified teachers can be hired 
with those funds, and we have tried in a number of ways in both 
our budget proposal, as I discussed earlier, and in our 
reauthorization proposal, to increase funding for teacher 
professional development to make sure that even where teachers 
are certified, that there is sufficient funding to really 
ensure that they are qualified and fully expert.

       COMPARISON OF ADMINISTRATION SCHOOL CONSTRUCTION PROPOSALS

    Mr. Obey. Three more points. Just very briefly, because my 
time is limited, in addition to the school construction 
proposal that is running through the Ways and Means Committee 
this year, you have an appropriated proposal as well which you 
are requesting. Can you explain how that differs from the Ways 
and Means component and why it is necessary?
    Mr. Cohen. The major difference between the two proposals 
is that the one that we are asking this committee to consider 
would basically provide grants and loans for urgently needed 
repairs. This is not for new construction or major renovation. 
It is for the large number of schools around the country that 
need quickly to replace boilers and heating and air 
conditioning systems, that have terribly leaky roofs. Our 
proposal would either provide no interest loans for those 
programs or, in high need districts, and those with large 
numbers of Native Americans, we would provide grants to pay for 
those needed repairs.

                      COMPREHENSIVE SCHOOL REFORM

    Mr. Obey. On comprehensive school reform, USA Today carried 
a story somewhat critical of the fact that so many of the 
applications that were approved were not for the specific 
models that had been spelled out in this subcommittee's report, 
for instance. I would simply observe before I ask you two 
questions. I would simply observe that if one would review the 
congressional debate on the establishment of this program, you 
would see that quite a bit of concern was expressed that, in 
fact, Department of Education not tie States' hands to only the 
list that we listed in our subcommittee. I would simply say 
that I don't think your agency can be criticized for following 
congressional instructions.
    I would also point out that the authorizing committee 
specifically said last year in its report language the 
committee is aware that some States as well as the U.S. 
Department of Education are attempting to limit comprehensive 
school reform to certain models or approaches. We disagree with 
such limits.
    Having said that, isn't it true that nearly two-thirds of 
the 1,790 schools receiving these awards are using one of 20 
models?
    Mr. Cohen. Yes, it is. About 30 percent of them are also 
using a small number of models that have been identified in the 
AIR study as being highly effective.
    Mr. Obey. 49 percent are using one of the 17 models that 
have been identified in the original legislation, but if that 
is wrong, I would like you to correct it for the record.
    I also point out that the Thomas B. Fordham Foundation, 
which is a well-known conservative think tank in their 
statement of Consumer's Guide to Schoolwide Reform said, the 
proliferation of the models offer a tremendous boom to research 
since it permits virtually every important claim about 
educational effectiveness to be tested in something like a 
laboratory environment and across a significant number of 
schools.
    Having said that, do you believe that States should be more 
selective in the approaches that they are approving? Are you 
satisfied that they are focused enough on funding approaches 
that have been demonstrated through research to be effective, 
or do you think that they need to be somewhat tighter?
    Mr. Cohen. We think States are facing a learning curve. 
They are getting better over time. We have been encouraging 
States, and we recently sent them guidance to encourage schools 
to do a better job of selecting models. We also provided 
information to school districts on how to select models and how 
to select technical assistance providers so they are better 
informed consumers. We are reminding States of their 
responsibility to be sure that the models that they fund are, 
in fact, comprehensive and include all 9 elements that the 
legislation identifies. Ultimately the States are responsible 
not only for administering the program andselecting--enabling 
schools to select models, they are also accountable for results, so 
they need to monitor results that the schools that they fund achieve.

                          NEW AMERICAN SCHOOLS

    Mr. Obey. The New American Schools movement, which, as you 
know, is the business group that originally pushed for this 
initiative, have launched a blue ribbon panel to develop 
voluntary standards for model developers, and they have taken 
that step in part because research and evaluation has shown 
that even proven models can still produce bad results if you 
don't have successful implementation. The jockey is only as 
good as the horse he is riding. Does the Department support 
this effort to hold model developers to a higher standard?
    Mr. Cohen. Yes, we do. We do support the New American 
Schools effort. We are also working with the regional labs to 
develop a companion guide for local school districts that helps 
them understand the questions that they should ask of technical 
assistance providers to make sure that they are going to get 
what they need.
    Mr. Obey. I thank you. I have several other questions for 
the record. Thank you, Mr. Chairman.
    Mr. Porter. Thank you, Mr. Obey.
    Ms. DeLauro.
    Ms. DeLauro. Thank you very much, Mr. Chairman. Thank you 
both very much.
    Mr. Cohen, I want to ask about the Technology Challenge 
Fund. There is a request for $150 million to train all new 
teachers entering the workforce to use technology effectively 
in the classroom. Are there any more details about this fund, 
how it operates? For instance, how would the schools in my 
district go about getting access to the funds?
    Mr. Cohen. Thank you, Congresswoman. Actually that program 
is administered by the Office of Postsecondary Education. I 
would be happy to get you more details, but I probably 
shouldn't make up an answer here.

                    TEACHER PROFESSIONAL DEVELOPMENT

    Ms. DeLauro. Please don't. Let me ask in terms of teacher 
training, I have a wonderful educational asset in my community, 
and that is Dr. Jim Comer, who is quite extraordinary. He has 
been talking about child development and education for a lot of 
years. The Comer school models are around the country. Most 
recently, Dr. Comer has put thought into and is trying to 
develop a concept that is not a new concept to this country, 
but a throwback to something that we did with agriculture 
extension, and bridging the science, if you will, of 
agriculture to the farmer in melding the two, so in fact, we 
could have an increased productivity in our agriculture 
production, et cetera. His notion is education extension 
service, in which we are trying to teach teachers or provide 
training for teachers, that is, other than in a particular 
subject area but rather child development. What teachers should 
know about children and their development and, in fact, how 
that kind of development, in essence, increases their ability 
to learn rather than a specific topic.
    Again, I think that given the scientific information that 
we have today about when children learn and how they learn, 
that this sounds to me like a credible idea, and I am wondering 
if you know about this or of this, what your sense is in terms 
of this notion of the mastering of child development as a--
really, a precondition for teaching or a way in which we can, 
in fact, understand--take the science, meld it with the 
teachers, and do the same kind of things that we did years ago 
with regard to agriculture in this country?
    Mr. Cohen. Thank you. I am not quite sure I know what an 
extension agent is, but I do know that the science is important 
and it is important that teachers understand how children learn 
and develop.
    Ms. DeLauro. These would be centers. For instance, in 
Connecticut, we have the University of Connecticut and the 
Agriculture Extension Service, but they would be centers around 
the country where teachers, current teachers and new teachers 
would actually be trained.
    Mr. Cohen. We would be happy to work with you to take a 
good look at it. I think the funds that we have for teacher 
professional development could certainly help support something 
like that. We have proposed, both in the budget and in our 
Elementary and Secondary Education at reauthorization proposal, 
funding for training preschool teachers, and a lot of what they 
need to be trained in is how young children learn and develop. 
That would be a first cousin of what you are talking about. We 
would be happy to sit down with you and work on that together.
    Ms. DeLauro. If I can get the information that we have to 
you, that would be terrific.
    Thank you.

                          IMMIGRANT EDUCATION

    Let me ask Mr. Love a question about immigrant education. 
As I understand, the $150 million for immigrant education is 
the same funding level as fiscal year 2000.
    Mr. Love. That's correct.
    Ms. DeLauro. How many new immigrant children will come to 
the U.S., and is this amount adequate?
    Mr. Love. We have requested level funding, and one of the 
reasons is that we have data showing that there is a leveling 
of immigrant students who are eligible for funding, so that is 
consistent with the idea of requesting level funding. I will 
include additional information for the record and give you the 
exact numbers.
    [The information follows:]



                            SCHOOL VIOLENCE

    Ms. DeLauro. Let me just ask another question of Mr. Cohen. 
The violence in schools, something that we are all trying to 
deal with and engage students and parents in this effort, what 
have been your efforts in this area?
    Mr. Cohen. We have done a number of things. First, I think 
it is worth keeping in mind that although the press has 
unfortunately been filled in the last several years with 
stories of high-profile shootings, something which properly 
concerns everybody, schools are, for the most part, safe 
places. Students are better off being in school during the 
school day or after the school day than they are in other 
places in the community. The incidence of violent crime, in 
particular, involving youth has been declining, so we think 
that is an important part of the picture.
    Nonetheless, it is important to address issues of safety in 
schools and we have tried to do that in a number of ways. 
First, by strengthening the Safe and Drug-Free Schools program 
and increasing the funding for it, and insisting that the funds 
be used on more proven approaches, often in partnership with 
law enforcement and mental health agencies and the like.
    Secondly, last year Secretary Riley and Attorney General 
Reno put out an early warning guide to help educators begin to 
understand how to recognize the signs of troubled youths and 
respond to them. It is not an easy thing to do becausesome of 
those signs are subtle, and oftentimes the signs are present in large 
numbers of youth who are normal and not particularly troubled.
    We have also done a number of other things. The substantial 
expansion the President has requested in the after-school 
program is an important way of keeping children of all ages 
safe. We also know that smaller learning environments make a 
big difference. I remember when Secretary Riley met last year 
with school safety officers, one of the things that they told 
him, as did police officers, is that small classes make a 
difference, when there is a personal connection between the 
students and the teachers. The same is true of the effort we 
have proposed to expand funding for efforts to make high 
schools smaller. To create more personalized learning 
environments where students are connected to at least one 
caring adult. All of those efforts can make a difference.
    Ms. DeLauro. Thank you.
    Mr. Porter. Ms. Northup.

                   ASSISTANCE WITH GRANT APPLICATIONS

    Mrs. Northup. First of all, I would like to thank you and 
to follow up the Chairman's questions about grants. In another 
life I was a paid grant reviewer, and one of the things that I 
learned about that was in preparing a grant, organizations and 
institutions and schools become better organized, number one, 
focused on what the challenges are that they are trying to 
meet, what the plan is for meeting those challenges, what the 
steps are and who is going to be engaged, and how they measure 
their success. So writing a good grant isn't just a matter of 
what words you put down, but it actually helps you engage other 
people.
    After I was elected, I realized how much Federal money goes 
through a grant process. Quite honestly, there is a lot more 
money out there from nonprofits and from foundations. So Mr. 
Chairman, I sponsor each year in my district a grant-writing 
workshop, and I bring somebody from Education, HHS, HUD and one 
other agency that I change, and the morning is all where the 
opportunities are, and the afternoon is how you write a good 
grant.
    You have sent somebody each time. This year last week we 
had 500 participants, nonprofits, school agencies that 
participated, and it is largely because of the quality of the 
people that you send that are able to impart that information. 
I believe whether or not they win grants from you, and they all 
don't, what they get is good feedback. They get explanations 
for what part of their grant they didn't meet, and quite 
honestly many of them go on to write grants to nonprofit and 
foundations that they do win.
    It is part of that infrastructure, I have never been one to 
bash everything that government does and I think that service 
and that service around this country is one of the best things 
you can do for our schools, and quite honestly, other 
institutions.
    Mr. Cohen. Thank you. Let us know when you want us to send 
someone else.
    Mrs. Northup. We had 500 organizations that participated.
    Mr. Cohen. That is terrific.

                           EDUCATION RESEARCH

    Mrs. Northup. I would like to ask you about--we talked 
about--there was one area where you said there is not a lot of 
research in this area, and then you said but we ask States to 
award grants to research-based programs. I just want to 
advocate for the Department of Education focusing on high 
quality research that gives good direction, I don't think--if 
we evaluate what the Department of Education might be able to 
do for schools around the country, then you can't go in and 
teach every second grade.
    But what you can do is make sure every state does not have 
to research things themselves. And provide that research. And 
the research has to be more than market-based. It has to be 
based on sound science. We really do want the right answer. I 
just wondered if you would comment on any efforts you are 
making in that way.
    Mr. Cohen. First of all, I couldn't agree with you more 
about the importance of the Department playing a large and 
active role in funding and supporting high-quality research. In 
the first 10 years of my career, I worked in what it was then 
called the National Institute of Education, the forerunner of 
the Office of Educational Research and Improvement (OERI), 
where I helped direct a research program called the Effective 
Schools Research, that basically did nothing but keep asking 
the question: Where can we find schools that are succeeding, 
particularly with the most disadvantaged population? Where can 
we find teachers and classrooms that are succeeding with that 
same population? What can we learn from them and how can we 
make sure that other people learn about those research results?
    And we began to talk about the importance of school 
leadership, classroom management practices, and high 
expectations for a focus on results. And I think that is very 
important. One of the number of very important roles for the 
Education Department to play.

                         NATIONAL READING PANEL

    Mrs. Northup. Well, along that line, then if I could follow 
up. Are you aware that the National Reading Panel is expected 
this month to release their report after 2 years of work? I 
realize, I mean, it may be that the Secretary, but it actually 
is going to apply to early childhood and grade school. I 
wondered if you are expecting that, if you are looking forward 
to it. If you are eager to disseminate the information that 
comes from that.
    Mr. Cohen. I am aware that the report will be out shortly. 
I am looking forward to reading it myself. We have begun 
discussions within our office, particularly in the Title I 
program and the Reading Excellence program, to begin to think 
through ways to make sure that we can get those findings and 
information and report them in the most effective ways possible 
to, in particular, Title I schools where we provide the 
greatest support.
    We do have a series of conferences that we run each fall 
called Improving America's Schools. This past year, we had 
three different regional conferences that involved somewhere 
over 600 educators from around the country, and that is one 
very effective vehicle for disseminating results like that 
through long-term intensive workshops that we do that give 
people an opportunity to learn those results. We will usethat 
and other means as well to disseminate that information.
    Mrs. Northup. Was that my alarm going off? Let me follow up 
by saying that Title I is not just where you have the most 
influence, it is also where the most children fail. That is why 
it is funded that way.
    And we--I agree with the Secretary that every child can 
learn and can learn at a high level. If you look at the 
children that are falling behind, they are most often in the 
disadvantaged neighborhoods, disadvantaged communities where 
perhaps their parents were not successful in school and this 
sort of lack of literacy. You know, the parents do not even 
feel comfortable coming to school, much less knowing how to 
intervene.
    I believe that the reading panel was empaneled--it was 
something that the Chairman wrote into our bill. I am very 
eager to see the results of that. And then to see that we 
make--I think transmitting that to the school level is going to 
be more painful than many people suspect. Because people become 
entrenched in what they believe works, whether there is 
evidence to show it does or not. And all of us are going to 
have to look at this with an open mind and be willing to 
implement what the National Reading Panel--what guidelines they 
give us, if any. And I ask you to work closely with us to make 
sure that we fund and direct efforts in the direction where 
they can be the most effective.
    Mr. Cohen. I would be delighted to do that.
    Mr. Porter. Mr. Bonilla.

                MILITARY RECRUITMENT ON SCHOOL CAMPUSES

    Mr. Bonilla. Thank you, Mr. Cohen, as you may know I am 
also on the Defense Appropriations Committee, and I learned 
from the Commandant of the Marine Corps the other day that 
there are many school districts throughout the Nation that do 
not allow military recruiters on their campuses. And this 
troubled me, not only because of the educational opportunities 
that the military offers many young people, especially in poor 
and underserved minority areas, but also this is a time when 
our military is running into real problems with recruitment.
    Were you aware, Mr. Cohen, that some schools bar military 
recruiters on their campuses?
    Mr. Cohen. No, this is the first that I have heard of that.
    Mr. Bonilla. Does this trouble you, Mr. Cohen?
    Mr. Corwin. If I might add something, we became aware of it 
recently because when the reauthorization bill was being 
debated in the Senate committee a couple of weeks ago, Senator 
Kennedy offered an amendment that the committee accepted that 
clarifies that nothing in ESEA prohibits military recruiters. 
And I don't think we have taken an official position, but I 
haven't heard an opposition to that at all.
    Mr. Bonilla. Obviously, Senator Kennedy is aware of this 
and is trying to remedy the situation. That is the reason I 
asked, because we also feel there are a lot of us on the House 
side that feel that this is a problem that needs to be 
addressed.
    Mr. Cohen. We are working on it. Tom is aware of some 
things that I am not aware of. This is probably not the only 
one. But it does seem to me to be a matter that is worth paying 
attention to, and if there is an effort underway to remedy it, 
so much the better. I will look into it.
    Mr. Bonilla. I appreciate it. Does this trouble you?
    Mr. Cohen. Yes. Again, I haven't thought about it a whole 
lot, except in the last 60 seconds. It is not obvious on its 
face why we ought to exclude military recruiters from our 
schools. They are an important institution on our society. We 
depend on them. I do not see why we would do that.
    I grew up in a time when the military was not always that 
popular, but right now it seems to be a bad idea to behave that 
way.

        IMPACT AID FUNDING FOR SCHOOLS WITH MILITARY DEPENDENTS

    Mr. Bonilla. I have another quick question, because our 
time is running out and we have a series of votes. On another 
subject, Impact Aid.
    I am troubled that the Administration has chosen to ignore 
the needs of our military families who have kids in school. 
Instead of supporting these military schools, the 
administration would like to spend billions on creating new 
programs which sound good. Why has the Administration chosen to 
cut Payments for Heavily Impacted Districts by $72 million and 
Basic Support Payments in the Impact Aid Program by $17 
million, Mr. Cohen?
    Mr. Cohen. I am going to let Tom explain some of the 
details on this. This is another thing he is more aware of than 
I am. But, in general, what we have tried to do is target the 
Impact Aid money to the most heavily affected districts. While 
we have cut funding overall, we have increased the per-pupil 
funding by 7 percent for the students that are covered. This is 
an area where we are trying to target the funds to serve 
communities whose students really create the largest Federal 
burden.
    Tom?

          REDUCTION IN PAYMENTS FOR HEAVILY IMPACTED DISTRICTS

    Mr. Corwin. That is basically our answer, particularly on 
Basic Support Payments. The Payments for the Heavily Impacted 
Districts has been a tough one to grapple with over the last 
few years. There is a role for the program if it is constructed 
correctly.
    Basically, our thinking behind Payments for Heavily 
Impacted Districts is that there is a level of education that a 
school district ought to be providing, which you measure by 
comparing a school district to what similar districts in the 
State are providing. There is a level of resources that they 
have, which is the State and local funds and the regular Impact 
Aid payments. If there is a gap there, then you can make an 
argument that you should fill in that gap.
    The way the funds have been appropriated the last several 
years, the math does not work for us at all. Districts that do 
not meet the original statutory qualifications under the 
authorizing statute are getting large payments. We have even 
changed the qualifications to lower them, and where districts 
still do not even meet them, they are lowered again so that 
school districts still get a payment.
    Districts have been paid on the basis of kids that are not 
the federally connected kids. We tried to push reforms through 
in the reauthorization, but this year in the budget, because it 
is harder and harder for us to justify the request, people 
threw up their hands and decided this was not a priority.
    Mr. Bonilla. A lot of us have concerns about that. I may 
have some more questions for the record on this subject. Thank 
you for being here today.
    Mr. Porter. Thank you, Mr. Bonilla. Because of these series 
of votes that will last pretty much the rest of the hour, we 
will recess the hearing. Mr. Cohen thank you very much for your 
testimony. Mr. Love, thank you. We did not get many questions 
for you, we will put a lot of tough onesin the record for you. 
Thank you all very much.
    [The following questions were submitted to be answered for 
the record:]



                                           Tuesday, March 28, 2000.

                     DEPARTMENTAL MANAGEMENT PANEL

                               WITNESSES

FRANK S. HOLLEMAN, DEPUTY SECRETARY, DEPARTMENT OF EDUCATION
JOHN CALLAHAN, ASSISTANT SECRETARY FOR MANAGEMENT AND BUDGET, 
    DEPARTMENT OF HEALTH AND HUMAN SERVICES
PATRICIA LATTIMORE, ASSISTANT SECRETARY FOR ADMINISTRATION AND 
    MANAGEMENT/CHIEF INFORMATION OFFICER, DEPARTMENT OF LABOR
KENNETH P. BOEHNE, CHIEF FINANCIAL OFFICER, RAILROAD RETIREMENT BOARD
WILLIAM A. HALTER, DEPUTY COMMISSIONER, SOCIAL SECURITY ADMINISTRATION

                       Introduction of Witnesses

    Mr. Porter. The subcommittee will come to order.
    We continue our hearings on the appropriations for fiscal 
year 2001 for the Departments of Labor, Health and Human 
Services and Department of Education; and we are pleased to 
welcome this morning a panel of five: Frank S. Holleman, Deputy 
Secretary, Department of Education; Dr. John Callahan, 
Assistant Secretary for Management and Budget at the Department 
of Health and Human Services; Patricia Lattimore, Assistant 
Secretary for Administration and Management, Chief Information 
Officer, Department of Labor; Kenneth P. Boehne, Chief 
Financial Officer of the Railroad Retirement Board; and William 
Halter, Deputy Commissioner, Social Security Administration.
    We welcome all of you this morning, and congratulate each 
of you on achieving an uneventful Y2K situation. After all of 
the time of calling everyone to account for this you obviously 
did an excellent job; and there was, to my knowledge, nothing 
that happened when we reached the year 2000, which was 
wonderful. Let me thank all of you for that.
    Each of you has a short statement, am I correct?
    Mr. Porter. Dr. Callahan, why don't you proceed.

                   Opening Statement of John Callahan

    Mr. Callahan. Thank you very much.
    I am pleased to present the Health and Human Services 
Departmental Management budget today. I will summarize my 
testimony and ask that the full testimony be made part of the 
record.
    We have achieved a number of positive accomplishments. The 
first one is the one that you mentioned, the Y2K challenge. 
Because of the $560,000,000 supplied by this committee, the 
full committee and the Congress over the last two fiscal years, 
1998 and 1999, we did not experience any Y2K failures. We have 
1,174 critical and noncritical computer systems, and they all 
passed the Y2K test. Medicaid and Medicare payments were made 
on time.
    The second major achievement was the issue of securing a 
clean financial opinion for the first time in our history. Six 
operational divisions--CDC, FDA, SAMHSA, HCFA, NIH and HRSA--
have also received clean financial opinions at the operational 
division level, and CDC and FDA have achieved this 
accomplishment for two years in a row. To achieve this clean 
opinion, since 1996 we have cleaned up several major audit 
qualifications for the Department, which affected more than 
$160,000,000,000 in account balances.
    We have also published our fourth annual accountability 
report on time on March 1; and we will make that available 
along with an executive summary. This summarizes the various 
management goals and achievements of the Department for fiscal 
year 1999.
    We submitted our full GPRA report to the subcommittee with 
our FY 2001 budget. Two-thirds of our 750 performance measures 
have record both 1999 goals and 1999 actual performance. Next 
year, with even more information, we expect to have 90 to 95 
percent of our GPRA goals with actual performance measures 
attached.
    With regard to electronic commerce, we make 100 percent of 
our grant payments, 99 percent of our salary disbursements, 93 
percent of our travel reimbursements, 92 percent of our small 
purchases, et cetera, electronically, and we are going to do 
even more on the electronic commerce front in the next few 
years.
    Our Departmental Management budget request is for 
$246,000,000. This is $18,000,000 over last year. Additional 
funds are going to be used for the bipartisan nursing home 
initiative which was contained in last year's omnibus bill, as 
well as additional funds to strengthen the confidentiality and 
security of health information, which is of vital interest to 
the Nation. We also have a $12,000,000 request to support the 
Department's lead role in providing health consequence 
management in the event of terrorist attack.
    One area which a portion of our budget deals with, and 
which Iknow is of great interest to the subcommittee, is the 
issue of antibioterrorism efforts. We fund that this year at 
$265,000,000, [Clerk's note.--Later corrected to $260,000,000.] and we 
are requesting $265,000,000 for next year. This will provide for better 
surveillance, lab capacity and a pharmaceutical stockpile, as well as 
State and local preparedness planning. We are on track with our 
efforts.
    Let me end by noting three challenges that will continue to 
confront us this year and in the years in the future. The first 
is computer security. We need upgrades in our security systems, 
procedures and policies. This is called for by Presidential 
Decision Directive 63, and it will take time and considerable 
resources to achieve these goals. We have seen commercial sites 
hacked and brought down with denial of service attacks. Every 
department in the government has vulnerabilities which have to 
be corrected. We hope that this subcommittee will look at the 
funding arrangements and oversight that you experienced with us 
with regard to Y2K. We feel that same model would help with 
regard to this PDD 63 effort.
    As for the clean financial opinion, now that we have it, we 
have to move to eliminate the material weaknesses that still 
exist in our financial management services. This means lowering 
the Medicare fee-for-service error rate, further modernizing 
and automating financial reporting, insisting on timely 
reconciliation of financial accounts, and being aggressive on 
the debt collection front.
    Lastly, there is the human resource challenge, and that is 
workforce planning. Fourteen percent of our workers can retire 
today; 27 can walk out the door within 5 years. We face major 
challenges in recruiting entry level and senior information 
technology, accounting, human resource, legal and specialized 
scientific personnel. Federal departments raid one another for 
these personnel. We can't continue in that fashion. We need 
more creative programs like the Presidential Management Intern 
Program, more creative use of retention and relocation 
authorities, and development of more competency-based training, 
so that our existing workforce can upgrade their skills and be 
part of the 21st century workforce.
    I have served as the Assistant Secretary for Management and 
Budget for 5 years now. I have been privileged to work with the 
Secretary, Donna Shalala, and with the Deputy Secretary, Kevin 
Thurm, in dealing with the management challenges that we have 
discussed. But, quite frankly, our achievements could not have 
been made without the steadfast assistance, support and 
scrutiny that you personally and your subcommittee have 
provided. You and the subcommittee members and staff deserve a 
great deal of the credit for the management achievements that 
we have made in the past several years.
    This completes my oral testimony, and we would be happy to 
answer any questions.
    Mr. Porter. Thank you for those kind words.
    [The information follows:]



           OVERVIEW OF DEPARTMENT OF EDUCATION BUDGET REQUEST

    Mr. Porter. Frank Holleman, Deputy Secretary, Department of 
Education.
    Mr. Holleman. Thank you, Mr. Porter.
    I would like to provide an overview of our budget request 
for our management activities, review with you some of our 
management initiatives and give you an update of the audit of 
our financial statements.
    First, our Department is requesting a total of 
approximately $1.2 billion in budget authority for management 
activities in fiscal year 2001, an increase of $83 million over 
the fiscal year 2000, or approximately 7 percent. This total 
includes $584 million in discretionary budget authority and 
$770,000,000 [Clerk's note. --Later corrected to $600 million.] 
in the permanent mandatory authority under the Higher Education 
Act for managing the student financial aid programs. The budget 
excludes $170 million for guaranty agency payments.
    A little more than half of the increase reflects the cost 
of management of the student financial aid programs. Other 
increases are for pay raises, rent and other, overhead-related 
expenses, improved financial management and upgraded 
technology. And, similarly, our request includes an increase of 
32 FTE for work on financial management, our web and computer 
management, and management of some elementary and secondary 
programs.

             DEPARTMENT OF EDUCATION MANAGEMENT INITIATIVES

    Second, I would like to review some of the management 
initiatives that have been undertaken this year.
    As you stated at the beginning, we addressed Y2K and came 
through it and leap year without any significant problems.
    We have continued to work to reduce the student loan 
default rate which long plagued the student aid programs. It 
once was over 22 percent and this past year dropped to 8.8 
percent as well.
    We brought student defaulted loan collections up to $3 
billion this past year.
    We have continued our efforts to operate electronically. 
Based on what is happening in the processing of the free 
application for Federal student assistance, we estimate this 
year about 40 percent of all the students in America are going 
to apply electronically. That is an increase of about 1 million 
students and families this year.
    Since 1998 we have issued now, as of a week or so ago, over 
6 million pin numbers which allow students and families to 
monitor the status of their accounts and also to operate 
electronically with our student aid system.
    We have entered into an agreement with the National Student 
Loan Clearinghouse to supplement the data in what we call the 
National Student Loan Data System which will make our data more 
accurate and reduce costs. As you know, NSLDS has helped us to 
prevent as much as a billion dollars in grants and loans going 
to ineligible students.
    At the same time, the demand for education informationover 
the Internet is growing tremendously. Our website has 1,600 
publications and more than 30,000 files. Last month, we had almost 1.7 
million visitors who made 11.2 million visits and viewed 30.1 million 
pages. Over the last 2 years, our website has been cited by teachers as 
among the top three sites they visit.
    As you all know, we have streamlined our procurement 
process. More than 250 of our employees save a tremendous 
amount of time by using government-wide purchase cards for 
routine purchases under $2,500, and we have made active use of 
government-wide contracts to reduce our procurement time and 
costs.
    In addition to seeking information over the web, Americans 
seek education publications in hard copy, and our ED Pubs, 
which is a one-stop source for Department publications, has 
saved over a million dollars in postage since we set it up in 
May 1998. Our customer service ratings match corporations like 
Federal Express and Nordstrom.
    As the committee knows, our GPRA plans have been rated at 
the top of those submitted to Congress. We do this and many, 
many other things with only two-thirds as many employees as 
worked at the Department when it was founded in 1980.

              DEPARTMENT OF EDUCATION FINANCIAL MANAGEMENT

    Now I would like to give you an update on the status of our 
audit.
    As you know, in 1997, the Department received a clean 
opinion on its audit, but in 1998 we experienced a number of 
problems in preparing our financial statements and, as a 
result, received a disclaimer. This past year, for fiscal year 
1999, we made significant progress. First, our audit was 
completed on time. Secondly, we received qualified opinions for 
four of the five statements for the Department as a whole and 
four out of five for student financial assistance. Our staff 
worked hard to improve data, to upgrade the software so it 
could do more automated closings in preparation of statements 
and to automate the tracking of adjustments and put into place 
procedures for adjustments to our records.
    I want to let you know we are working hard to build on that 
foundation to have as good a result as possible this year. Let 
me give you a few examples.
    We have improved our reconciliation process. We are 
reconciling our cash balances monthly with Treasury, and our 
new software has worked very well. We have recently implemented 
it and have what the financial management people refer as a 92 
percent hit rate, which is what we wanted to receive in order 
to do our reconciliations. We are working to apply the same 
software improvements that allowed us to produce four out of 
five statements in an automated way to the fifth one, and we 
are directing staff and resources to improve our data and to 
improve reconciliation among other accounts.
    Finally, I should let you know that this last week, after 
extensive testing, we have selected a new general ledger 
software package and will work hard to put it in place for 
fiscal year 2002. In the interim, we are relying on the changes 
which I have described for the coming year.
    In short, we were encouraged that we made improvements for 
fiscal year 1999, but we are not satisfied. Our goal is a clean 
audit, and we are continuing to make improvements to have a 
clean audit as we did in 1997.
    In closing, if I can echo my colleague on my right, on 
behalf of Secretary Riley and the entire Department, thank you 
for his support during his 8 years at the Department and for 
your help in improving the management at our Department through 
your entire career. Thank you very much.
    Mr. Porter. Thank you, Mr. Holleman.
    [The written statement on Mr. Holleman follows:]



    Mr. Porter. Patricia Lattimore for the DOL.

                           Opening Statement

    Ms. Lattimore. Thank you for the opportunity to meet with 
you today and touch on some of the Department of Labor's 
accomplishments over the past year and outline and address some 
of the management strategies that we feel will allow us to move 
forward. For fiscal year 2001 we are requesting a budget of 
$459,144,000 including several significant increases for our 
Office of Disability Policy, Employment and Training, 
investments in addressing abusive child labor practices around 
the world, as well as a centralized information technology fund 
that we think will provide the necessary tools for operation of 
DOL programs.
    Last year, my testimony focused on the Department's 
management strategies for the year 2000 rollover. We made Y2K 
compliance a top priority at the Department of Labor, and our 
management efforts paid off as we provided uninterrupted 
services to American workers, their families and our own 
employees as we transitioned into the year 2000.
    The management approach that was at the core of Y2K 
conversion success is still at work in the Department of Labor. 
We continue to make great strides in unifying the Department 
around the clear objectives of delivering services of the 
highest quality to meet the needs of America's workers, 
retirees and their families while continuing to improve 
productivity and stewardship over the resources entrusted to 
us.
    Our primary catalyst in this endeavor is the framework we 
established in response to the government's GPRA. The GPRA 
spurred the Department to reexamine its mission deliverables in 
the Nation's rapidly changing economy and labor environment, 
uniting the energies of our agencies and programs around the 
Secretary's three goals to promote a prepared workforce, a 
secure workforce and quality workplaces.
    To clearly focus the Department on managing for maximum 
program results and to monitor our ongoing progress in reaching 
our strategic goals, we introduced and continue to strengthen 
our management processes. The effectiveness of these processes 
is evidenced by DOL having met or exceeded some three-quarters 
of our 48 Departmental goals for fiscal year 1999, including 
most of the goals aimed at improving essential management 
services. Through our successes we have applied the lessons we 
learned to our management approaches for this fiscal year.
    The Department's Annual Performance Plan has improved 
significantly. As we gained experience in more effectively 
planning and managing for results, the 2000 and 2001 plans 
reflect the Department's dedication to improving the outcome 
orientation of our performance goals.
    While we have made substantial process, there is still more 
to be done. The availability of reliable data to assess the 
accomplishments of key performance goals in a timely manner is 
a current focus of the Department and our program partners. 
These improvements, together with refinement of our goals and 
performance measures, will enable us to further enhance the 
linkage between budget requests, program results and costs.
    Two of the strategic goals that guide the Department in 
meeting the needs of our external constituents, a secure 
workforce and quality workplaces, also form the foundation for 
our internal management initiative. Through the Secretary's 
lifelong learning program we have enhanced career opportunities 
and workforce security for all Department of Labor employees. 
As part of this initiative, over 250 web-based courses are now 
available to our employees 24 hours a day, regardless of 
geographic location, to enhance job-based skills and 
technological proficiency. To further prepare the organization 
for the future, we have launched extensive mid and senior 
management level programs. We believe these investments will 
keep the Department's foundation sound and our employees 
thoroughly prepared to meet the challenges posed by the 
changing face of work in America.
    Our human resource strategies, including our employee 
friendly programs, diversity initiatives and safety and health 
programs, are directed towards achieving a high quality 
workplace in DOL, one which will enable us to continue to 
recruit and retain a highly talented and motivated workforce.
    We also have maintained our focus on increasing the 
representation of people with disabilities within the DOL 
employment pool and maximizing their career opportunities and 
contributions. Our Central Office for Assistive Services and 
Technology offers our managers strategies for success for 
persons with disabilities by offering employers and applicants 
a one-stop shop for services and technical support regarding 
access and reasonable accommodation issues.
    Maintaining a safe workplace and workers compensation cost 
avoidance also remain high on our agenda. Through 
implementation of the Secretary's safety and health initiative 
and an aggressive return-to-work effort, we are experiencing 
declining trends in workers compensation costs, as well as, 
accidents and injuries, trends that we will work diligently to 
continue into fiscal year 2000.
    In addition, the Department's leadership in safety and 
health across the Federal sector has been recognized and 
extended by Secretary Herman's role as the chairperson of the 
Federal Worker 2000 Initiative.
    Among our cross-cutting management goals, we are devoting 
particular attention to strengthening financial management and 
establishing a modern information technology infrastructure 
consistent with the principles of the Clinger-Cohen act. I am 
pleased to report, for the third consecutive year, the 
Inspector General issued an unqualified opinion of the fiscal 
year 1999 consolidated financial statements. The Inspector 
General addressed some reportable conditions, but no material 
weaknesses were cited.
    As I mentioned at the outset, the collaborative management 
approach that was at the core of our year 2000 success is still 
at work, bringing a strategic departmental focus to our IT 
investments. For 2001, the Department is seeking $60 million 
for a proposal that will dramatically improve consistency and 
coordination among all Department of Labor agencies. With this 
investment, we will institute IT architecture solutions which 
will improve compatibility of our systems. We also will 
introduce a common suite of office automation tools that will 
allow us to be intraoperable across the Department, and we will 
strategically address an aging infrastructure and the rising 
challenge of computer security.
    Computer security was also highlighted by the Inspector 
General during its annual financial systems audit which 
recommended a number of actions.
    I am pleased to report that we are well positioned to 
respond to all of those recommendations due to the planning, 
guidance and development work that we have done over the past 
year. Implementation of these plans, together with the 
investments included in our budget request, will significantly 
strengthen the security environment for our information 
technology resources. Guided by our strategic goals, the 
Department has established a solid management infrastructure 
with a proven record of success in delivering results to our 
constituents. We will build with confidence on this foundation 
to meet the challenges of the future and continue to improve 
the effectiveness of our programs and services.
    That concludes my statement.
    Mr. Porter. Thank you, Ms. Lattimore.
    [The information follows:]



                  Opening Statement of William Halter

    Mr. Porter. William Halter, Social Security Administration.
    Mr. Halter. Mr. Chairman, we are proud of the management 
results achieved at Social Security. In fiscal year 2001, 
Social Security will pay for $461,000,000,000 to 50 million 
beneficiaries, one of every four Federal budget dollars. On 
average, every workday about 100,000 people visit one of our 
1,300 field offices and over 240,000 people call our 800 
telephone number. Each workday, we process an average of 20,000 
initial claims and hold 2,400 hearings before Administrative 
Law Judges. Each year, we ensure that over 250 million earnings 
items are correctly credited to workers' accounts, and we do 
this while keeping administrative costs at less than 2 percent 
of the overall costs of all programs that we administer.
    In the 2 years that the Syracuse University's Maxwell 
School Government Performance Project has been under way, our 
agency is one of only two Federal agencies to receive an ``A'' 
grade for its management performance. We are also pleased that 
Social Security's Annual Performance Plan for fiscal year 2000 
received one of the highest scores from the General Accounting 
Office.
    Most importantly, our customers also think we are doing a 
good job. As cited in a December 13, 1999 Wall Street Journal 
article, a University of Michigan survey indicatedthat Social 
Security's service was rated by our customers as among the best of all 
Federal agencies and significantly higher than the average private 
sector company.
    We are working to further improve our service. Last 
October, Social Security started sending Social Security 
statements to every American age 25 and over who is currently 
not receiving benefits. The statements provide individual 
estimates of Social Security benefits and a record of the 
worker's earnings. Mr. Chairman, to my knowledge that is the 
largest mass personalized mailing in history.
    A full year in advance, we successfully renovated our 
computer systems to be Y2K compliant and ensured that Social 
Security benefits were paid timely and without interruption.
    As Internet use increases, a growing number of customers 
want to conduct government business electronically. We are 
addressing this growing demand while mindful that the expansion 
of electronic service delivery is always going to be contingent 
upon ensuring security and privacy protections.
    Last year, almost 10 million customers visited Social 
Security's award-winning website, double the number from the 
year before. In addition, four weeks ago, Social Security 
released the first issue of a free electronic newsletter, 
Social Security e-news, designed to keep the public informed 
about the Social Security, Supplemental Security Income, and 
Medicare programs. In the first four weeks, over 36,000 
individuals have subscribed to this newsletter.
    Social Security is committed to improving program 
management while maintaining a policy of zero tolerance for 
fraud and abuse. You will hear from our inspector general later 
this morning about several of our efforts, but I want to take 
this opportunity to thank the Committee for providing 
additional funds, with an adjustment to discretionary spending 
caps, to help with our continuing disability review workloads. 
We are now in our fifth year of a 7-year plan and expect on 
average to realize lifetime program savings of at least $6 for 
every $1 in administrative cost.
    Another area of progress is the Supplemental Security 
Income redetermination process, which focuses on income and 
resource factors affecting eligibility and payment amounts. 
Despite budget limitations, we plan to process more than 2 
million SSI nondisability redeterminations both this year and 
next year. Social Security's investment in high-error profile 
redeterminations produced overpayment reductions of about $7 
for every $1 spent in fiscal year 1999.
    Our successes notwithstanding, Social Security faces many 
difficult challenges. This year, we will implement three 
significant new laws, including the Ticket to Work legislation 
and title VIII that provides special cash benefits to certain 
World War II veterans.
    We appreciate the recent and unanimous congressional action 
repealing the Retirement Earnings Test for beneficiaries aged 
65 to 70. This legislation will allow senior citizens to 
contribute their experience to the workforce without being 
penalized for doing so. With the passage of this legislation, 
Social Security will have one-time costs in this fiscal year to 
make benefit adjustments, respond to inquiries, process 
additional claims, and modify our computer systems.
    We ask for your support of the President's $35,000,000 
fiscal year 2000 supplemental appropriation request to fund 
implementation of this legislation. This will allow Social 
Security to pay out $6,000,000,000 in benefits this year to 
over 800,000 [Clerk's note.--Later change to 900,000.] 
Americans as quickly and efficiently as possible.
    Finally, looking to the future, we will face the challenge 
of increasing workloads of the baby boom generation at the same 
time the retirement wave of our employees will crest. Between 
now and 2020, our retirement workload will increase by more 
than 50 percent, and our disability workload will grow by more 
than 70 percent. Simultaneously, we must provide improved 
service delivery.
    Given the importance of Social Security to millions of 
American families, we recognize our continuing obligations to 
be responsible stewards of the programs we administer while 
managing for results. In light of a growing workload, meeting 
these expectations will depend on continued success in 
harnessing information technology and securing adequate 
funding. But with your continued support, we will meet the 
challenges facing us.
    Mr. Chairman, this is my first hearing before you. I am 
sorry it is likely to be the last. We appreciate at Social 
Security what you have done for us. It is certainly the case 
that our employees are well aware of our commitments, and they 
appreciate all that you have done for us.
    Mr. Porter. Thank you, Mr. Halter.
    [The information follows:]



                     Mr. Boehne's Opening Statement

    Mr. Porter. Mr. Boehne, the Railroad Retirement Board.
    Mr. Boehne. This morning I will comment on our budget 
request, our performance under the GPRA, our achievements with 
the Y2K effort, the agency's vision for the future, and our 
success with our buyout program this year.
    The Board Members will be testifying before the 
Subcommittee tomorrow concerning the Railroad Retirement 
Board's budget request for fiscal year 2001. Our agency is 
requesting an appropriation for administrative expenses of $95 
million. This level of funding will allow us to provide 
appropriate service to our customers in fiscal year 2001 and 
support a broad range of additional technology investments 
needed to ensure excellent customer service in the future.
    The Board administers comprehensive retirement/survivor and 
unemployment/sickness insurance benefit programs for railroad 
workers and their families under the Railroad Retirement and 
Railroad Unemployment Insurance Acts. The Board also has 
administrative responsibilities under the Social Security Act 
for certain benefit payments and Medicare coverage for railroad 
workers. During fiscal year 1999, we paid $8.2 billion in 
railroad retirement and survivor benefits to 748,000 
beneficiaries. We also paid unemployment and sickness insurance 
benefits of $95 million to about 34,000 claimants.

                 GOVERNMENT PERFORMANCE AND RESULTS ACT

    To help ensure our success in carrying out 
theseresponsibilities and to fully comply with the GPRA of 1993, the 
agency developed a Strategic Plan in 1997 covering fiscal years 1997 
through 2002. That plan contains several goals, and they are organized 
around four main themes:
    The first is to provide excellent customer service; second, 
to safeguard our customers' trust funds through prudent 
stewardship; third is to align our resources to effectively and 
efficiently meet our mission; and fourth is to expand our use 
of technology and automation to achieve our mission.
    Agency managers are in the process of developing an updated 
Strategic Plan for fiscal years 2000 through 2005, which will 
be released in September.
    We have also developed annual performance plans that 
include specific measures and indicators. We recently prepared 
our first program performance report covering activities during 
fiscal year 1999. This is presented in the agency's 
Justification of Budget Estimates for Fiscal Year 2001.
    The results from our first full year of using the GPRA 
planning and reporting process are encouraging. We met or 
exceeded planned performance levels for 44 out of 54 reportable 
indicators. Of the remaining 10, we came very close to the 
planned levels that we had anticipated. For example, we planned 
to achieve a 99.7 percent payment accuracy rate for initial 
railroad retirement payments and achieved a payment accuracy 
rate of 99.68 percent. While not quite achieving our goal, this 
was slightly better than fiscal year 1998, when we achieved a 
payment accuracy rate of 99.64 percent. When compared to actual 
results in fiscal year 1998, our fiscal year 1999 performance 
was equal to, or better, in nearly every category.

                     EFFECT OF FUNDING CONSTRAINTS

    As a result of funding constraints in fiscal year 2000, 
however, our program managers are expecting an overall decline 
in performance this year and probably in the years to come. 
Specifically, regarding the agency's strategic goal for 
customer service, performance for most of our objectives shows 
that the agency's Annual Performance Plan is projected to be 
lower in fiscal year 2000 compared to fiscal year 1999.
    Furthermore, despite having significantly reduced our 
staffing and our spending in such areas as travel and training 
during fiscal year 2000, we simply do not have the funds 
necessary to provide for our information technology initiatives 
as planned. These important investments would have strengthened 
our technology infrastructure, helped us to develop new systems 
and allowed us to better fulfill various requirements pursuant 
to Federal mandates.
    Our inability to fund the activities needed or to start and 
continue certain mission-critical automation initiatives, 
combined with the large number of employees leaving the agency, 
is expected to result in lower performance in many customer 
service objectives in fiscal year 2001 as well when compared to 
fiscal year 1999. This, too, is presented in our Annual 
Performance Plan.

                           YEAR 2000 PROJECT

    I would like to comment briefly on our Y2K project. I am 
quite pleased, as are the rest of the people here, to report 
that the agency's highest priority project for the past number 
of years has been quite successful. The Y2K initiative remained 
on track. It shows that we planned the work and worked the 
plan. We concluded the project using 133 staff years over a 5-
year period, and we had estimated that we would use about 142 
staff years when we started the project. The project included 
work on both mainframe and microcomputer systems, with most 
effort centered on the mainframe systems. We performed 
comprehensive future date test scenarios during the past year 
to ensure that our systems would continue to perform 
accurately.

                         VISION FOR THE FUTURE

    Having successfully completed the Y2K project, the major 
challenge we face is to solidify plans to support our vision of 
how the Board should conduct business in the 21st century. We 
envision our customers having a variety of choices when 
contacting the agency, whether in person, by telephone, mail, 
interactive voice response system or the Internet. Our 
customers should know that in almost all cases they will be 
able to conclude their business within the context of that one 
initial contact. With careful planning and investments, we 
believe we can establish a framework for an efficient and 
effective information technology environment that supports our 
vision and our strategic goals well into the future. To make a 
successful transition, however, the agency needs sufficient 
funding in the near term to support an adequate staffing level 
and finance strategic information technology investments. These 
needs will be presented at tomorrow's budget hearing.

                                BUYOUTS

    In closing, I would like to express my appreciation and our 
agency's appreciation, Mr. Chairman, for all of the support 
that you have given the agency's programs and operations. We 
have seen great successes in eliminating backlogs and making 
great progress in debt collection and in the automation area. I 
thank you for your continued support in providing us with 
buyout authority. We fully utilized that buyout authority this 
fiscal year, approving buyouts for 67 employees, including 33 
staff members who separated under early-out retirement 
authority. These buyouts resulted in net savings of more than 
$550,000 this year and as much as $4 million annually in fiscal 
year 2001 and beyond.
    Thank you for the opportunity to appear before you today. I 
will be happy to answer any questions that you have.
    Mr. Porter. Thank you for your statement, Mr. Boehne.
    [The information follows:]



                         Introductory Comments

    Mr. Porter. Let me thank each of our five witnesses for 
their statements.
    I was thinking as all of you testified how much a good 
economy helps us get things done and how much smarter we are 
doing things today than had we did them when I began in 
Congress 20 years ago. We are doing things better both in the 
private sector and in Government, and there is a great deal 
more accountability.
    We are talking, Dr. Callahan, about GPRA standards. We are 
evaluating the results and seeing if the money buys us what we 
want. This is all very positive.
    I also was thinking as I sat here how if there was some 
horrible problem that you all were going to have to answer for 
this morning, the media would be here rolling the cameras and 
reporting on page 1. But you are giving us good reports of what 
is going on in your Departments and Agencies, and there 
probably isn't media here telling the American people the good 
things that are happening. I guess that is the nature of news, 
but it often is a downer for people out there.
    There are 6 billion people on the planet now and still only 
24 hours in the day. There are plenty of bad things that go on. 
You can fill the media time with bad things. Why don't they 
tell the American people all of the good things that are 
happening? It is sort of disappointing, tosay the least.
    I also sat here and thought to myself how much information 
technology is changing everything we do. It is not only 
changing it and making it easier to do it well, but it is also 
driving the economy, that and other technologies are driving 
this economy so much faster than it was going before. And with 
that, of course, comes its own problems. I want to say, Mr. 
Halter, you can comment on both of these things. You are a 
young man. You are a government employee.
    Mr. Halter. I am.

             RECRUITING AND RETAINING GOVERNMENT EMPLOYEES

    Mr. Porter. So am I. But several of you talked about the 
difficulty we are going to have in the future recruiting people 
to come to work for government; and in many cases, both Social 
Security and railroad retirement, you are going to have a lot 
more burden of additional retirees. We are going to need more 
people to administer that.
    Can you talk a minute to us about attracting young people 
to government as a career? It used to be that, while salaries 
were never quite competitive with the private sector, benefits 
were better, and people looked forward to a good retirement and 
the like. Is that still out there among young people or are we 
going to have a Nation strictly of stockbrokers?
    Mr. Halter. My guess as the youngest person at the table--I 
hesitate, obviously, to sweep too broadly and speak for a 
generation, but, Mr. Chairman, it seems to me that one of the 
things that we need to do is a little bit softer than 
recruiting policy and salaries and things like that, but it 
ties right back to your first remarks about giving folks an 
accurate portrayal of what is going on in the government, how 
we are succeeding, how well we are doing, what our challenges 
are. The fact is that a life in service or a portion of a 
career in service, in public service, is something that can be 
extraordinarily fulfilling--and very important.
    One of the things that strikes me every day about the 
Social Security Administration, just to give one example, is 
the truly incredible reach of this organization in terms of 
affecting people's lives. We have 50 million beneficiaries. 
Social Security has truly been one of the most extraordinary 
anti-poverty programs, probably, in the world's history. And I 
hesitate to give such superlatives, but I don't think that is 
hyperbole. It has been a program implemented through the 
efforts of our employees that has reduced poverty rates among 
the elderly to where they are below poverty rates in other age 
categories within the society.
    So I think, tying back to your remarks, one of the things 
that we should certainly do is to give an accurate portrayal of 
what is possible through public service.
    Turning to some of the more managerial aspects, I think one 
of the things that we have to do in our recruiting practices is 
to focus on talented people coming out of either undergraduate 
or graduate programs. I am sure you are familiar with the PMI 
program, the Presidential Management Intern program, which we 
are very high on at the Social Security Administration, and 
send individual letters to all of the folks who receive a PMI 
designation and try to coax them to come to the Social Security 
Administration.
    In addition to that, we certainly have to be continually 
vigilant to make sure that our pay scales are comparable to 
what is available in the private sector, and, with respect to 
information technology, that we have the tools on the desktops 
of our employees to ensure that they can do the job as 
effectively and efficiently as possible.
    I hesitate to filibuster here. There is so much more to say 
with respect to this, but these are a few of the thoughts as to 
what we can do.
    Mr. Porter. Thank you, Mr. Halter.
    Does anybody else want to comment? Dr. Callahan.
    Mr. Callahan. My son is a graduate of Duke University and 
went through on an NROTC scholarship. He is now working in 
information technology for the Marines. It is a very 
interesting experience for him.
    Why I mention this is that I think the President has 
proposed creating an NROTC type of model for information 
technology students called the Cybercorps. I think we need to 
do that.
    I think oftentimes the young kids coming out of school with 
good training will come into the government for a period of 
time. They will have challenging work to do when they get here. 
But we need to provide that incentive. And when they come in 
with a good education, have challenging work, they will 
continue to be marketable for the private sector as well.
    I think we have to just make sure that, over time, we 
promote more interaction between the private sector and the 
government, whether at the entry level through something like 
the Cybercorps program, or exchanges of personnel through mid-
career programs, et cetera. We have to take a harder look at 
some of our concerns in the past about revolving door 
syndromes. With regard to IT, the revolving door is not so bad.

                             GPRA PROGRESS

    Mr. Porter. It may be in a transitional sense we will take 
those people released from the benefits offset and bring them 
back into government at age 65 or 67 or 68 or 69 to get us 
through some of these periods. There is a lot of experience and 
talent, and maybe this will be a talent we can draw on for 
government, at least in a transitional sense.
    GPRA, let me congratulate each of you in the progress that 
you are making and implementing performance measures.
    Each of you have mentioned this. What about baselines so we 
can distinguish between changes occurring independent of 
Federal programs and changes occurring because of them? What 
are the main obstacles to establishing these baselines, and how 
soon will we see specific measurable goals accompanying 
administration proposals? Any comment?
    No one would like to.
    Ms. Lattimore.
    Ms. Lattimore. I think the Department of labor has made 
great strides in obtaining high quality data for baseline 
measurements--a significant improvement from some of our 
initial GPRA activities. A large part of the investments we 
made in our management programs were geared over the last year 
to do just that. In some areas, we had baselines where the data 
was not initially good and needed to be refined and others 
where we discovered an absence of data. We worked with the 
Bureau of Labor Statistics in several areas to start to build a 
database. It didn't stop us from working with the goals. We 
knew going in we would not have as good a measurement as we 
would like to have.
    One of the early issues, was in those areas where we didn't 
have good data, we needed to move quickly to build it. 
Otherwise, you are assessing performance without a hard 
measurement base. We have successfully addressed the data issue 
in a number of our program areas, and where we have not, we are 
investing resources into building and improving those 
databases.
    Mr. Porter. Thank you.
    Mr. Boehne.
    Mr. Boehne. I think the Railroad Retirement Board is 
fortunate that we had a quality assurance program in place when 
GPRA took effect. We had a number of statistics available to 
us, so we had a good baseline to start with. We have been able 
to build on that, and we even go out two decimal points for 
accuracy. I think that is very valuable. Just three-hundredths 
of 1 percent of an inaccurate amount being paid out under our 
program would be about $2.5 million a year, which is 
approximately the same amount that we are asking for as an 
increase over the President's level.
    Mr. Callahan. With regard to the baselines for the agencies 
that have to work with State and local partners in terms of 
funding, one of the things we have to do is engage in a 
constructive process of engagement with our State and local 
partners in terms of developing these baselines. We have to do 
this in the case of SAMHSA, with the National Association of 
State Anti-drug Administrators, et cetera. So we do not have 
those baselines, in some cases, for our reports this year, but 
we are working positively with our partners to make sure that 
next year when we get this data it will reflect a mutual 
agreement between the Federal and State and local partners 
about what we should have for baseline data.
    It takes a little more time in those agencies where we 
don't directly deliver the services. In the case of IHS or in 
the case of Social Security, which is a direct service agency. 
Those of us who have those other programs have to take a little 
more time in this regard.

                          Grant-Back Accounts

    Mr. Porter. Mr. Holleman, what progress have you made in 
clearing the grant-back account? What is the current balance in 
the account, and what plans and time lines do you have to 
reform the administration of this account?
    Mr. Holleman. Mr. Porter, we have two or three points.
    First, we have taken the nontrue grant-back portion of the 
account and moved it out of the so-called grant-back account to 
a true suspense account. We have been working with the 
Department of Treasury to determine exactly how best to do 
that. So now the pure grant-back account, which, as you know, 
is for grantees who have had to refund moneys to the 
government, to our Department, and then have the opportunity to 
reclaim part of them. The pure grant-back account now is 
between $6 million and $7 million and we put the balance into a 
true suspense account working with the Treasury. That account 
will--the suspense account itself, as we are working with the 
Treasury--be closed or cease to exist in June. That is our 
timeline to work out so that the funds are correctly applied to 
the individual appropriation accounts.
    Mr. Porter. Dr. Callahan and Ms. Lattimore, do you have 
accounts like the grant-back account in your departments?
    Ms. Lattimore. No, we do not. When we recover funds from 
grants of that nature, the process that we use is, if it is a 
viable program for that particular fiscal year, it is returned 
to the grant account. If not and it is not available for 
obligation, it rolls over to the Treasury. We don't have a 
similar structure to the Department of Education.
    Mr. Callahan. We do not have anything of that nature, sir.
    Mr. Porter. Is there any reason for you to not follow their 
practice?
    Mr. Holleman. Mr. Chairman, what I can say about that in 
terms of the true grant-back portion, the $6,000,000 to 
$7,000,000, we have worked with Treasury, and my understanding 
is that the true grant-back portion is an accepted practice 
with Treasury so that the grant recipients, when they refund a 
portion, have the opportunity to reclaim the portion they can 
get back.

                 Management Agreement with OIG Findings

    Mr. Porter. All right. Thank you, Mr. Holleman.
    As you know, this committee has focused significant 
attention on the amounts of savings reported by the Inspectors 
General in their reports and the level of management agreement 
with those reports. A quick review indicates that many times 
between 40 and 60 percent of the funds reported in 
investigations and audits do not receive management 
concurrence. Does this pattern reflect the experience in your 
department or agency and, if so, why is it happening?
    Dr. Callahan.
    Mr. Callahan. We supplied for the committee record on 
behalf of the Inspector General, on March 22, data with regard 
to that. We concurred in 1997 with $175,000,000 of the 
questioned costs of $196,000,000. In 1998, they reported 
$197,000,000, and we concurred in $125,000,000; and in 1999 
they reported $212,000,000, and we concurred in $134,000,000.
    I would like to supply for the record the details of where 
the differences were in our concurrence recommendations and the 
IG's recommendations.
    Let me say, if I might, Chairman Porter, there are a 
variety of people that are involved in audit disallowances, 
program disallowances, et cetera; not only our office but the 
General Counsel, the Inspector General, the Department of 
Justice, et cetera. This is an effort that we will continue as 
aggressively as we can. We work very closely with the IG to 
correct the things that we believe should be corrected.
    Even if we have some differences on the concurrence front, 
which I will supply for the record, I wouldn't wantthat to be 
interpreted to mean that there is a level of disharmony, if you will, 
between ourselves and the Inspector General and the General Counsel. It 
is our combined efforts that are important here, to collect all of the 
appropriate recoveries that need to be collected.
    Mr. Porter. Thank you, Dr. Callahan.
    [The information follows:]



    Mr. Porter. Mr. Holleman.

               Savings Reported By the Inspector General

    Mr. Holleman. Mr. Chairman, most of the recommendations we 
receive from our Inspector General are in the form of 
management or integrity improvements that are not as easily 
quantifiable in dollar terms. By and large, we do reach 
agreement or in fact agree with the Inspector General on his or 
her recommendations on changes in our management of our 
programs or additional integrity improvements. By and large, we 
reach agreement with our Inspector General.
    Mr. Porter. Ms. Lattimore.
    Ms. Lattimore. The same for us. The majority of the OIG 
dollar findings are a result of questioned costs during audits 
of our grantees or contractors. We agree with 40 to 60 percent. 
We have a structured process with the Inspector General. The 
grantee or contractor provides explanations where needed, and 
rarely do we find ourselves out of agreement at the end of the 
day.
    Mr. Porter. Mr. Halter.
    Mr. Halter. Mr. Chairman, we find ourselves in disagreement 
with our IG approximately 10 percent of the time. That is 
obviously significantly less than the statistics you cited.
    With respect to the specific dollar amounts, I would be 
happy to supply those for the record.
    [The information follows:]

                SSA Concurrence with IG Recommendations

    In fiscal year 1997 through 1999, for audit recommendations 
which did not require Congressional legislation, SSA concurred 
with an average of 85 percent of the dollars involved 
($955,381,551 out of $1,120,785,819).
    For that same time period, there were three recommendations 
requiring legislative action with which the Agency disagreed. 
These recommendations, has SSA pursued implementation, would 
have reflected changes to current program policy which we did 
not believe were in the best interest of the population we 
serve. The dollar amount associated with those three 
recommendations was $1,551,253,074.

    Mr. Porter. Mr. Boehne.
    Mr. Boehne. Historically, not all recoverables, 
restitutions, fines, civil damages, and penalties are 
collected. In his latest semiannual report, our Inspector 
General reported recoveries of $855,655 for fiscal year 1999 
resulting from actions taken by his office. I am happy to 
report that this agrees with the agency's accounts receivable 
records, so we are in agreement with what the OIG is reporting.
    With regard to specific audit findings, when they issue 
their report, they identify what they estimate the audit 
findings to be, and we either agree or disagree with the 
findings themselves. It is only after we process the cases that 
we determine exactly how much the over- and underpayments are. 
That requires us to do the work first to find out how close the 
IG's estimate is.
    But I am happy to report again that, with regards to the 
work by the IG's investigators and the money that he claimed in 
his latest semiannual report, our accounting records are in 
total agreement.
    Mr. Porter. Thank you, Mr. Boehne.

                          LIHEAP Supplemental

    Dr. Callahan, we are considering a $600,000,000 
supplemental for LIHEAP. I understand that all of the funds 
appropriated in fiscal year 2000 have been obligated to the 
States.
    Mr. Callahan. Right.
    Mr. Porter. However, when we asked for data on what 
percentage of the $1,300,000,000 obligated to the States had 
actually been spent and how much was still in the pipeline, it 
took a great deal of effort to determine the answer, and the 
answer, when provided, was heavily caveated.
    My question does not go to the merits of the request but 
rather to the following areas: First, how can the Department 
make budget decisions without knowing such data? Second, to the 
degree such data is used, how is it used? And, third, what 
changes in financial and other systems are contemplated to 
provide the Department, OMB and the Congress with better data 
on the actual expenditures by grantees to improve budget 
decisionmaking?
    Mr. Callahan. Mr. Chairman, we did work closely with your 
staff in supplying that information below the obligation level, 
which is the liquidation of the obligations. There is a lag 
time at the State level once these obligations are made by the 
States, because of the various arrangements that they have with 
their various energy suppliers for providing LIHEAP assistance. 
Oftentimes, the process goes on where assistance is given to 
individuals through the energy companies, and then the 
liquidation of those obligations occurs over several weeks and 
sometimes months.
    I can understand your concern about making sure that wehave 
timely information in that regard. That information is supplied to us 
by our Program Support Center through the Payment Management System, 
and we will continue to consult with you and the staff of the committee 
about improving the timeliness of those obligations--of that 
liquidation data, if you will, of the obligations. This is not going to 
be an easy process, but we will redouble our efforts to make sure that 
we provide that to you on a timely basis.

                            Closing Remarks

    Mr. Porter. Thank you, Dr. Callahan.
    Each of you are doing in your respective departments and 
agencies a very, very fine job. We are encouraged by what we 
hear. Yes, there are some problems here and there, but in every 
case you are working on them to get them solved. And, again, I 
think we are doing things a great deal smarter and in a much 
more accountable way than we have in the past, and all of that 
is encouraging. For whatever media is here, tell the world that 
these people are doing a fine job. Unfortunately, nobody is 
probably going to know that.
    Mr. Callahan. We will be available for comment out in the 
hall.
    Mr. Porter. Thank you all so much for appearing.
    The subcommittee will stand briefly in recess.
    [Recess.]
    [The following questions were submitted to be answered for 
the record:]



                                           Tuesday, March 28, 2000.

                        INSPECTORS GENERAL PANEL

                               WITNESSES

LORRAINE LEWIS, INSPECTOR GENERAL, DEPARTMENT OF EDUCATION
JUNE GIBBS BROWN, INSPECTOR GENERAL, DEPARTMENT OF HEALTH AND HUMAN 
    SERVICES
PATRICIA A. DALTON, ACTING INSPECTOR GENERAL, DEPARTMENT OF LABOR
MARTIN J. DICKMAN, INSPECTOR GENERAL, RAILROAD RETIREMENT BOARD
JAMES G. HUSE, JR., INSPECTOR GENERAL, SOCIAL SECURITY ADMINISTRATION
    Mr. Porter. The committee will come to order.
    We continue our hearings on the fiscal year 2000 budget for 
the three Departments and Agencies under our jurisdiction, and 
we are pleased to welcome a panel of Inspectors Generals: 
Lorraine Lewis, Inspector General, Department of Education; 
June Gibbs Brown, Inspector General of Health and Human 
Services; Patricia A. Dalton, Acting Inspector General, 
Department of Labor; Martin J. Dickman, Inspector General, 
Railroad Retirement Board; and James G. Huse, Inspector 
General, Social Security Administration.
    We welcome each one of you.
    We thank you for the effort you put in to comply with the 
Subcommittee's request to provide information on actual 
collections and to array the data in an annual rather than a 
cumulative format. It is helpful to us, and we appreciate your 
efforts.
    Now we will proceed with statements and begin with Lorraine 
Lewis.
    Ms. Lewis. Thank you for the opportunity to testify on the 
fiscal year 2001 budget request.
    The President's budget request for the OIG is $36.5 
million, a net increase of $2.5 million above the fiscal year 
2000 appropriation. Our request will support 285 full-time 
equivalent positions, the same staffing level as fiscal year 
2000. The requested amount would allow the OIG to continue to 
provide the types of work that have an impact on the Department 
and its activities.
    Let me briefly mention three accomplishments.
    For the first time, the Department met the statutory March 
1st deadline for reporting on the audits of the Departmentwide 
annual and the separate SFA financial statements.
    Second, in February, 2000, we issued an audit report on the 
Department's security policies and plans for its mission-
critical systems. Our review revealed that the Department has 
significant control weaknesses, including a lack of security 
plans and reviews for six mission-critical systems. In 
addition, the Department has no process to ensure resolution of 
identified security deficiencies and a lack of technical 
security training for many employees. The Department agreed 
with our findings and is taking corrective action.
    Finally last year, we reported to you on a long and complex 
OIG investigation we conducted with other law enforcement 
agencies. The investigation recently culminated in guilty 
verdicts by a Federal jury in White Plains, New York. I am 
proud to announce that our agents received governmentwide 
recognition from the President's Council on Integrity and 
Efficiency for their efforts on that successful investigation.
    For fiscal year 2001, our complete full statement includes 
a description of the major initiatives, three of which I will 
address below.
    Our information technology audit work will include 
oversight of systems development, audits of the Department's 
security for critical information systems and assessments of 
the adequacy of security controls. Due to the complexity of the 
work, we will require the assistance of experienced and trained 
contractors.
    Second, I am committed to fulfilling my statutory 
responsibility to conduct and report on the audits of the 
Departmentwide and separate SFA financial statements by March 1 
of each year. This effort will require about $1.5 million for 
contractor assistance to supplement our staff.
    Finally, I plan to increase the attention we are devoting 
to improving the Department's operations. I am reorganizing the 
OIG to focus the activities of two groups on Department 
operations. We spend much of our Washington-based 
auditresources on the Department's financial statement audits and on 
information technology issues. Jobs involving the Department's day-to-
day management operations must compete with others, particularly the 
financial and information technology work. Internal management 
operations often do not rise to the top. The two new groups will have 
that work as their highest priority.
    In conclusion, I would like to close by stating that we 
plan to support the continuous improvement in Education's 
programs and operations and to identify fraud and abuse. I take 
very seriously our responsibilities to communicate and work 
cooperatively with both the Congress and the Department; and 
while I have been only the Inspector General since last June, I 
am very aware and I have been made aware by my staff and 
members of the IG community of your continued support of that 
community and, on behalf of my office, I thank you.
    Mr. Porter. Thank you very much, Ms. Lewis.
    [The information follows:]



    Mr. Porter. June Gibbs Brown.
    Ms. Brown. Thank you, Mr. Chairman.
    I, too, would like to thank you for the support that you 
have provided not only our office but all of the IG community.
    To carry out our mission, my office works with the 
Department and its operating division, the Justice Department 
and other Federal and State agencies and the Congress. Our goal 
is to bring about systemic improvements in HHS programs and 
operations and to prosecute and recover funds from those who 
defraud the government.

                    OIG FUNDING SOURCES AND REQUEST

    The Office of Inspector General at HHS has two separate 
funding sources. First, we receive funding from the Health Care 
Fraud and Abuse Control Program, which I will refer to as 
HCFAC. This was established by the Health Insurance Portability 
and Accountability Act of 1996 and funds our Medicare and 
Medicaid antifraud and abuse efforts.
    From the $182,000,000 appropriated for the HCFAC program in 
2001, the OIG will receive between $120,000,000 and 
$130,000,000. We also receive a discretionary appropriation 
which is used to fund our oversight of all of the other HHS 
programs and operations such as public health, children and 
families, aging and departmental management.
    Our discretionary budget request for fiscal year 2001 is 
for 306 FTE and $33,800,000 million, an increase of $2,400,000 
above the fiscal year 2000 operating level. This increase 
provides for annualization of the January, 2000, pay raise, the 
anticipated January, 2001, pay raise, and other mandatory 
inflationary costs and a planned expansion of the Child Support 
Enforcement Task Force.

                      APPROACHES TO ACHIEVE GOALS

    We pursue a number of approaches to deal with fraud, waste 
and abuse in HHS programs. In recent years, we have expanded 
our effectiveness by partnering with other HHS offices, other 
Federal agencies, State and local governments and the health 
care provider community to achieve our common goals.
    I am pleased to add that we work increasingly with 
representatives of the health care provider community to 
develop reasonable and voluntary compliance guidelines for 
ensuring accurate billings to the Medicare program. We also 
enlist the support of Medicare beneficiaries. Our OIG hot line 
currently receives about 11,000 calls per week.

                            ACCOMPLISHMENTS

    The heightened focus of fraud and abuse by my office, HCFA, 
the FBI, the DOJ and Congress and others is yielding 
substantial recoveries and program improvements. During fiscal 
year 1999, we excluded more than 2,976 abusive or fraudulent 
individuals and entities from doing business with Medicare, 
Medicaid, and other Federal and State health care programs. In 
1999, accomplishments include 401 convictions of individuals or 
entities that engaged in crimes against the Department programs 
and 541 civil actions. We increased convictions by nearly 20 
percent in 1997, another 16 percent in 1998 and by almost 54 
percent in 1999.
    We reported overall savings of $12,600,000,000 for fiscal 
year 1999. This is comprised of $251,500,000 in audit 
disallowances, $407,700,000 in investigative receivables and 
$11,900,000,000 in savings from implemented legislative or 
regulatory recommendations and actions to put funds to better 
use. The savings that result from our recommendations that are 
implemented into law or regulation represent taxpayer or 
Medicare Trust Fund dollars that will not be spent. The amount 
of the savings is independently scored by the Congressional 
Budget Office or HCFA.

                     IMPROPER PAYMENT RATE DECLINED

    Last month, my office reported the results of our fourth 
annual projection of improper payments made for Medicare fee-
for-service claims. Over the 4 years we have conducted this 
review, the improper payment rate declined by 42 percent, from 
a midpoint of $23,200,000,000, or 14 percent, in 1996 to 
$13,500,000,000 or 7.97 percent, in 1999. That was a drop of 
$9,700,000,000.
    Many Medicare watchers attribute at least part of this 
downward trend to the increased oversight and enforcement 
efforts of our office, HCFA, DOJ and the FBI that were made 
possible by the steady HCFAC program funding system. According 
to the Medicare trustees and the Congressional Budget Office, 
these fraud and abuse efforts contributed to Medicare's record 
low inflation rate and the extension of the viability of the 
Trust Fund until 2015.
    Although we are heartened by the overall accomplishment, 
the level of improper payments is still too great a loss for 
the taxpayers to suffer. It is not a time to let down our 
guard.

                      COMPLIANCE PROGRAM GUIDANCE

    A cornerstone of our prevention efforts has been the 
development of compliance program guidance to encourage and 
assist the private health care industry in the fight against 
fraud and abuse. The guidance is developed in cooperation with 
the provider community and identifies steps that health care 
providers may voluntarily take to improve their adherence to 
Medicare and Medicare rules.
    With regard to Medicare and Medicaid investigations, in 
1999, we reported an all-time high of 303 health-care-related 
convictions and 534 health-care-related civil actions. About 
$369,000,000 was returned to the Medicare trust funds in 1999 
as a result of the antifraud activities, and an additional 
$4,700,000 was recovered as the Federal share of Medicaid 
restitution.

                     OTHER PROGRAM ACCOMPLISHMENTS

    Other HHS programs accomplishments include our work with 
the Department's programs other than Medicare and Medicaid and 
focused on quality of services and identifying ways to deliver 
services more efficiently and effectively. In theseprograms, we 
reported 98 convictions, 7 civil actions and savings disallowances and 
receivables of $356,000,000.
    I would like to highlight a couple of examples of our work 
in these discretionary programs.

                       CHILD SUPPORT ENFORCEMENT

    First, the child support enforcement effort. From January 
1995, through the end of fiscal year 1999, the OIG reported 
over 860 child support cases nationwide that resulted in 173 
convictions and court-ordered restitution of over $11,200,000 
in payments to custodial parents. In addition, the OIG released 
a series of five inspection reports examining the paternity 
identification process.

                      INSTITUTIONAL REVIEW BOARDS

    The second example is the institutional review boards. We 
issued four reports addressing problems with institutional 
review boards in protecting human subjects participating in 
clinical research. We concluded that the IRBs are reviewing too 
much, too quickly, with too little expertise, and are facing 
conflicts that threaten their independence.

                  HCFAC VERSUS DISCRETIONARY RESOURCES

    We have a number of projects planned or under way. Based on 
our request, almost 80 percent of our resources in fiscal year 
2001 will be provided from the HCFAC account and will be 
dedicated to Medicare and Medicaid audits, evaluations and 
enforcement activities. The remaining 20 percent of our 
resources will be provided by the discretionary budget and will 
be used to audit, evaluate and investigate the Department's 
other 300 plus programs.
    This concludes my oral testimony, and I appreciate the 
opportunity to report to you and welcome your questions.
    Mr. Porter. Thank you, Ms. Brown.
    [The information follows:]



    Mr. Porter. Patricia Dalton, Acting Inspector General, DOL.

                       DOL-OIG Opening Statement

    Ms. Dalton. Thank you, Mr. Chairman, for inviting me to 
testify before you in my capacity as Acting Inspector General 
to discuss our fiscal year 2001 budget request and our 
activities.

                    FISCAL YEAR 2001 BUDGET REQUEST

    The IG's fiscal year 2001 budget request totals 
$56,500,000, including 428 full-time equivalent positions. I 
will focus my testimony today on the types of activities that 
we propose to conduct in fiscal year 2001. I will also briefly 
discuss the management issues faced by the Department of Labor.

                           PROGRAM ACTIVITIES

    Mr. Chairman, in 2001 we will focus our program activities 
on audits, investigations and evaluations that will provide 
quality information regarding the effectiveness, efficiency and 
integrity of our key programs and operations. Our primary goal 
is to ensure that the information provided to DOL and Congress 
will be useful in their management and oversight of the 
Department. Our proposal is to carry out activities and special 
initiatives in the areas of employment and training, 
occupational safety and health, worker benefits, labor 
racketeering, as well as the overall management of the 
Department.

                          A PREPARED WORKFORCE

    To enhance performance and accountability of employment and 
training programs, we will focus our resources on the 
Department's effectiveness in implementing the Workforce 
Investment Act program.
    In addition, we will continue to respond to departmental 
requests for assistance in determining whether requests for 
equitable adjustments submitted by Job Corps construction 
contractors meet the regulatory requirements for payment. These 
equitable adjustment audit results have proven helpful in 
resolving disputed claims and have the potential for resulting 
in significant cost savings for the Department. Our budget 
requests has an additional half million dollars to respond to 
such requests.

                           QUALITY WORKPLACE

    In the area of safety, health and workplace standards, we 
plan to evaluate the effectiveness of certain aspects of DOL's 
safety and health enforcement programs and continue to focus on 
the integrity of individuals administering DOL safety and 
health programs. We will also evaluate the effectiveness of 
selected Office of Federal Contractor Compliance Program 
operations.

                            SECURE WORKFORCE

    To safeguard the integrity and efficiency of workplace 
benefit programs, we will provide oversight of initiatives to 
streamline the ERISA reporting process and audit selected 
functions and operations of the FECA program. From an 
investigative perspective, we will focus on fraud against 
workplace benefit programs by claimants or medical providers.
    We also plan to increase our efforts to identify and 
address fraud and weaknesses in the critical multi-billion 
dollar Unemployment Insurance Program.

                MAINTAINING A STRATEGIC MANAGEMENT FOCUS

    From a departmental management perspective, we will 
continue to increase our audit attention in the areas of 
financial management, GRPA performance systems and data 
validation. Because of growing concerns about the sufficiency 
and reliability of information obtained under the Single Audit 
Act, the OIG will need to expand the scope of our financial 
statement audits to include on-site quality control reviews of 
these audits. To meet this costly and labor-intensive 
responsibility in 2001, the IG is requesting an additional 
$1,000,000.

                     OIG-LABOR RACKETEERING PROGRAM

    Mr. Chairman, in carrying out our labor racketeering 
program, we will give priority to organized crime influence or 
manipulation of labor unions, union-affiliated employee benefit 
plans and labor-management relations.
    In 2001, we plan to increase our work in the pension arena, 
focusing on selected service providers to pension plans.

                      DEPARTMENT MANAGEMENT ISSUES

    Mr. Chairman, in my full statement I detailed those issues 
faced by management in the areas of financial management, 
grants management, performance management and reporting and the 
effective oversight of information technology at the 
Department. In our opinion, these areas form the foundation for 
management stewardship over DOL funds.Thus, we have increased 
our audit oversight activities in these areas to maximize our impact on 
helping DOL achieve full accountability over its resources and 
performance as detailed in our budget justification. We are also 
building our capacity to eventually provide comprehensive opinion level 
audit coverage of the key components of DOL accountability.

                               Conclusion

    Mr. Chairman, this concludes my prepared statement. I will 
be happy to answer any questions.
    Mr. Porter. Thank you very much, Ms. Dalton.
    [The statement of Ms. Dalton follows:]



    Mr. Porter. Martin Dickman.

                           Opening Statement

    Mr. Dickman. Good morning, Mr. Chairman and members of the 
subcommittee. I am here to ask for your support for our fiscal 
year 2001 budget request of $5,700,000. I wish to submit my 
testimony for the record.
    Mr. Chairman, as this is our last budget hearing with you, 
on behalf of the Office of Inspector General, I wish to add our 
wish to you for good luck in your future endeavors, and we wish 
to thank you for your efforts on behalf of the railroad 
beneficiaries and their families.

                            Office of Audit

    In fiscal year 2001, we will continue the audit of the 
RRB's 2000 financial statements and perform the preliminary 
work for the 2001 financial statements. Each financial 
statement audit, including the recently completed fiscal year 
1999 financial statement, has included a disclaimer of opinion. 
The disclaimer relates to the financial interchange, the annual 
fund transfer between the RRB and the Social Security 
Administration.
    The fiscal year 1999 audit also cited the agency's overall 
control environment as a material weakness. We will monitor 
actions undertaken by agency management to address these 
deficiencies.
    We will evaluate agency efforts in using the Department of 
Treasury's electronic Federal tax payment system to reconcile 
tax deposits reported by railroad employers with the amounts 
received and deposited in the RRB trust fund accounts.
    We will also continue to monitor the activities of the 
agency's investment committee and its management of RRB trust 
funds which exceed $17,000,000,000. Serious deficiencies have 
not been addressed. In addition, proposed legislative changes 
drafted by rail labor and rail management seeks to expand the 
agency's investment authority and eliminate the current 
investment committee. The issue of appropriate oversight of 
investments will continue to be a critical one.
    We will perform ongoing reviews of the RRB's strategic and 
performance plans and the agency's annual reports to ensure 
these goals are met. Auditors will examine the accuracy of 
supporting documentation for the performance data reported to 
Congress.
    We will continue to work closely with the agency's chief 
information officer and other managers of the agency to expand 
its document imaging systems.
    We will conduct audits relating to benefit payment accuracy 
and provide management with recommendations to reduce the 
number of administrative and adjudicative errors.
    We will monitor the agency's debt collection activities, as 
outstanding receivables continues to remain high at 
$53,000,000.

                        Office of Investigations

    In fiscal year 2001, our Office of Investigations will 
focus its resources on the cases with the highest fraud losses, 
cases related to the retirement and disability programs, and 
those cases concerning railroad employers who submit fraudulent 
reports to the RRB and do not submit payroll contributions as 
required. These investigations have a direct and significant 
impact on the RRB's trust funds and the benefits available to 
railroad workers and retirees. The current caseload totals 
about 700 active investigations, with fraud losses of 
approximately $11,000,000.
    We will continue to collaborate with other inspectors 
general and law enforcement entities. We will work closely with 
agency managers to ensure all fraud matters are appropriately 
referred to our office.
    Finally, we request the removal of the prohibition on the 
use of any funds for any audit, investigation or review of the 
Railroad Medicare program and related reimbursement funds from 
the Health Care Financing Administration. Our past performance 
has been effective, and we believe the high estimates of fraud 
in the general Medicare program and the substantial moneys in 
the RRB's Medicare program substantiate the lifting of this 
current restriction.
    This concludes my remarks, Mr. Chairman. I will be happy to 
answer any questions from you or other members of the 
committee.
    Mr. Porter. Thank you, Mr. Dickman.
    [The information follows:]



               SSA Inspector General's Opening Statement

    Mr. Porter. James G. Huse, Jr., Inspector General from the 
Social Security Administration.
    Mr. Huse. Thank you, Mr. Chairman.
    Today, I would like to briefly discuss our fiscal year 2001 
appropriations request as presented in my statement for the 
record.
    Since we began in 1995, actually 5 years ago this week, 
this subcommittee under your leadership has provided the OIG 
with a level of support that has been commensurate with your 
expectations of what this office can and does accomplish. In 
fiscal year 1999, we issued 59 audit reports, recommending that 
approximately $270,000,000 in Federal funds could be put to 
better use. Our counsel's office was instrumental in the 
prosecution of individuals guilty of violating section 1140 of 
the Social Security Act, which prohibits misleading 
advertising, sending a clear message to the direct mailing 
industry that deceiving customers under Social Security's good 
name will not be tolerated.
    Our investigators processed over 74,000 allegations, opened 
over 9,000 cases and caused 3,139 criminal interventions, 
including criminal convictions and illegal alien and fugitive 
felon apprehensions. These activities resulted in over 
$55,000,000 in recoveries and prevented SSA from issuing about 
$144,000,000 in improper benefits.
    Our fiscal year 2001 budget is for $73,000,000 and 584FTEs, 
a $7,000,000 increase in the amount authorized for fiscal year 2000, 
plus the annualization of 48 FTEs. These resources will allow us to 
maintain our current service levels and use our fiscal year 2000 
staffing authority to support the expansion of several key initiatives.
    We will also continue our efforts in reviewing SSA's 
compliance with the GPRA and expand our Civil Monetary Penalty 
program.
    We are working in partnership with SSA to address critical 
infrastructure and system security issues.
    First, one of our major fraud initiatives is our 
cooperative disability investigation teams, or CDI teams. These 
teams combine the resources and talents of our OIG special 
agents with State law enforcement officers as well as SSA and 
State disability determination service claims professionals to 
prevent individuals from fraudulently receiving benefits at the 
application stage. During fiscal year 1999, these teams 
confirmed 378 cases of fraud and prevented over $20,000,000 in 
estimated benefits from being disbursed. We continue to 
advocate for the expansion of these teams across the Nation.
    Second, the Fugitive Felon Project continues to identify 
individuals who are ineligible to receive Supplemental Security 
Income. As our office identifies and locates these individuals, 
SSA continues to remove them from the rolls. In fiscal year 
1999, we identified over $17,000,000 in overpayments and 
estimate that an additional $27,000,000 in benefits were saved 
as a result of our efforts.
    Third, the amount of civil monetary penalties imposed 
against individuals who make false statements in order to 
obtain benefits have doubled since 1997. Our major CMP case 
against the Federal Record Service Corporation resulted in the 
corporation being dissolved and settlement agreements totaling 
over a million dollars reached with the two individuals and two 
corporate defendants involved. We will have the opportunity to 
realize more benefits from this program in 2001.
    I would be remiss not to mention our efforts in the area of 
Social Security number misuse and its link to identity theft, 
one of the fastest-growing areas of concern for us and for the 
Nation. With the passage of the Identity Theft and Assumption 
Deterrence Act of 1998, the public's expectation is that the 
Federal Government will arrest, prosecute and convict 
individuals who fraudulently use another individual's Social 
Security number to create a false identity. In response to this 
expectation, we will continue to use our limited resources as 
efficiently as possible to promote the integrity of the Social 
Security number and open investigations where appropriate.
    I would like to thank you, the Chairman and the 
subcommittee for its continued support. I am confident that, 
with the approval of our fiscal year 2001 budget request, this 
OIG will continue to produce work which will safeguard the 
integrity of SSA's programs. I will be happy to answer any 
questions that the members may have.
    Mr. Porter. Thank you, Mr. Huse; and thank you to each of 
our panelists this morning.
    [The information follows:]



                   PROGRESS OF MANAGEMENT INITIATIVES

    Mr. Porter. I have a couple of general questions for all of 
you.
    You might have heard at the first part of this hearing on 
departmental management I was complimenting all those assistant 
secretaries for the fine job that they are doing. I do a lot of 
work in human rights, and we know that there is going to be 
human rights abuses in countries in many parts of the world, 
but we also look and principally look at direction. Is their 
record improving? Are they making some progress?
    My question is, recognizing that a good economy covers many 
sins, are we doing things smarter than we did them before? Is 
the management of the departments that you oversee improving? 
What do you see out there?
    I know you are all auditors and you look at the details, 
but look at the broad picture and tell me whether you are 
encouraged by what you see in your departments or agencies and 
whether you feel that they are making good progress in general 
on the things that obviously you are auditing and monitoring. 
Any comments?
    Mr. Dickman. Mr. Chairman, since 1993 when the first 
financial statement audit was done by Arthur Andersen, one of 
the material weaknesses was the overall control environment 
which has remained a material weakness even as we have done the 
financial statement audit internally. This year, the Railroad 
Retirement Board has established a senior executive officer, 
similar to a CEO, and given that individual more power. It is 
our hope that this is a substantial step by them to eliminate 
the overall control environment as a material weakness even 
though we believe that having 20 bureaus is way too many for an 
agency of that size. But we feel that is a positive step by the 
agency.
    Mr. Porter. Give me a generalized statement. Do you think 
things are going in the right direction?
    Mr. Dickman. Yes, I do.
    Mr. Huse. We heard my colleague, Mr. Halter, tell you the 
expanse of the Social Security Administration and its benefit 
programs--50 million beneficiaries, $460,000,000,000 in 
outlays, a daunting challenge for any government entity. It is 
better there. I am absolutely astounded at the commitment to 
public service and customer service that Social Security 
engenders in all of its people. Even in the IG world, it is 
hard not to be hooked into that commitment.
    Social Security has great challenges. It has all of the 
challenges that you heard in terms of its human capital 
situation with retirements. It has definite challenges in terms 
of customer service delivery in the future, and it has 
challenges in terms of protecting the integrity of its benefit 
programs in those outlays. But in every instance they have 
management plans that seem to have some focus onsolving these 
problems. They are not moribund. Where I think we get into our issues 
with the agency, perhaps, is over the timing of these and the speed, 
but in every context I think Social Security is on the move in the 
right direction.
    Mr. Porter. Anyone else?
    Ms. Brown. Yes, I would like to respond.
    I have seen tremendous progress. The Secretary, the Deputy, 
John Callahan who spoke earlier, and Ms. DeParle, who is the 
head of HCFA, have really set the stage here. They want to know 
what the problems are. They are not trying to minimize them or 
cover them up. They want them laid out and, even when it makes 
the agency look bad, to resolve these problems.
    So it has gained momentum since I came on board in 1993, 
rather than losing some of that steam, and I think they are 
making tremendous progress right now. These are programs that 
grew very quickly with few controls in them, and there have 
been some tremendous problems. But they are certainly making 
great progress on them.
    Mr. Porter. Anyone else?
    Ms. Lewis. This is my baseline year.
    Mr. Porter. But you have to look at what your predecessors 
have done.
    Ms. Lewis. Yes. I do find that there is a tremendous 
commitment on the part of the Deputy Secretary to get his hands 
around the issues, and the former Acting Deputy Secretary, in 
my experience and in the experience of my predecessor, has a 
lot of accessibility, a real intent to understand the full 
breadth of the problem and to work on what the corrective 
action plan should be.
    The Department is one of the few organizations in 
government to have established a performance-based organization 
in the SFA area through congressional authorization. Looking 
back at the OIG report of several years ago suggesting that was 
a useful way to go, it does look like the organization has 
picked up a lot of speed. There is a lot of activity and 
leadership going on in the SFA, and I think that is an 
important sign.
    Mr. Porter. Ms. Dalton.
    Ms. Dalton. At the Department of Labor I think there has 
been tremendous progress. There certainly is a commitment to 
delivering quality service and also a commitment to identifying 
problems early and moving actively to correct those problems so 
services can be provided.
    Mr. Porter. Thank you.
    Each of you talked about convictions, civil actions, audit 
recoveries and the like. How much deterrence is there in this? 
In other words, is this publicized well enough so that the 
contractors or beneficiaries or whomever is likely to engage in 
these kinds of activities being deterred by what you do or does 
it just go on and on? In other words, is our enforcement level 
strong enough and the penalties severe enough and the 
convictions certain enough that we are getting some deterrence 
out of all of this?
    Ms. Dalton. I think it varies from program to program.
    Certainly one model that has worked for us at the 
Department of Labor is in some of our grant program areas. We 
go in early, find problems and try to work with the program 
agencies to provide technical assistance to the remaining 
grantees so that they know where we have found problems and 
what is required to fix them. Getting that information out 
early, I think, certainly prevents a lot of abuse and fraud in 
the systems.
    Ms. Brown. I would like to comment that a policy of ours 
has been sent out with aggressive enforcement and then to get 
the most egregious cases publicized, and I think it has had a 
tremendous effect.
    We also have a preventive program, and we have had many, in 
the industry, American Hospital Association, for instance, 
being a good example, who have worked with us then to make sure 
that those proposals that we put out are something that they 
can agree with, too. Then they encourage their membership to 
follow them. And I think this deterrent effect has been really 
the main benefit of all of our programs.
    Mr. Porter. Mr. Miller.
    Mr. Miller. Thank you, Mr. Chairman.
    Let me start off with some general questions so I get a 
better understanding of the Inspector General's role. Because 
you all have a great reputation and you have a critical role 
that you perform certainly. Just looking at your resumes, it is 
impressive. You all have an independence like Arthur Andersen. 
You are appointed by the President, is that correct?
    Mr. Dickman. That is correct.
    Mr. Miller. Who makes that actual decision? How is that 
decision actually made? It is physically impossible for the 
President to interview everyone. How long are you in office?
    Ms. Brown. I have been Inspector General of five agencies 
and the Pacific Fleet.
    Actually, the first time inspectors general were appointed, 
they didn't allow us to go to any of the agencies that were to 
get inspectors general until after a screening process by the 
White House Personnel Office. Then they sent those of us who 
were possibilities to various agencies to interview to see if 
there was compatibility and agreement. Then the President, or 
at least the White House personnel made those decisions.
    Since then, it hasn't been as much of a joint process, but 
the White House still keeps a very close handle on this. I 
had----
    Mr. Miller. What do you mean by joint process?
    Ms. Brown. There have been some bad situations where there 
was incompatibility with personalities or style or something 
and it proved to be very ineffective, regardless of where the 
fault may lie.
    In the latest two appointments I had at the Department of 
Defense and HHS, I was interviewed by the Department 
Secretaries and then they talked to OMB. Since I was already 
known by those White House personnel and the Office of 
Management and Budget, who tracks what the IGs do, they gave 
their approval before the Secretary was able to put the request 
in to have it approved. So it is still pretty much of a joint 
process.
    Mr. Miller. But the Secretary of the HHS would have veto 
power of your position?
    Ms. Brown. Yes.
    Mr. Miller. How long are you appointed for?
    Ms. Brown. There is no term to the appointment. It is an 
indefinite appointment, removed by the President with----
    Mr. Miller. So a new President could replace all of you?
    Ms. Brown. That happened when President Reagan came in. He 
removed all of the IGs the first day, and it has nothappened 
since. The President has to report to both the House and the Senate as 
to the reasons for the removal. However, the President said he wanted 
his own people in the job when he reported at that time. It doesn't say 
the House and Senate have to agree with the position. So it is still 
rather up in the air.

                    RESTRICTIONS PLACED BY AGENCIES

    Mr. Miller. You have all been career or in phases of 
government. When you look into either agencies under your 
jurisdiction or outside ones, what restrictions do you have? 
Does HHS or Education, do they set restrictions of when you can 
go visit or who you can talk to? What limitations are placed on 
you by the agencies or are there any limitations?
    Ms. Brown. There are none in any of the jobs I had except 
for the Department of Defense where it is written into the law 
that there are certain restricted areas where you have to give 
notice and certain conditions under which the Secretary can, 
for national security reasons, ask you not to go in; and you 
have to abide by that decision.
    Mr. Huse. But in the IG act, in the conduct of audit and 
investigative activities, we are independent. That is in the 
act.
    Mr. Miller. If you want to talk to an employee, you have a 
right to talk to that employee without the supervisor there?
    Mr. Huse. There is some labor-management issues that 
pertain in certain circumstances that are based on decisions of 
the courts. But that is the only interference--and I don't mean 
interference in a restricting way. But that is about the only 
time you have outside----
    Mr. Miller. Does GAO operate under the same restrictions?
    Ms. Brown. They are very similar. They work for Congress 
and have the authorities of Congress when they go in and ask 
for information. So it is a little bit different.
    Mr. Miller. But the agencies don't tell GAO what they can 
and can't----
    Ms. Brown. Not at all. In that way, they are very similar.
    Mr. Miller. You are not told that you cannot speak to a 
person without the supervisor being there.
    Mr. Huse. That is a right that the employee has for a union 
representative, but--and if we choose to interview them under 
those circumstances, that is our call. But nobody decides how 
we conduct our investigations or audits.
    Mr. Dickman. There is a warning that if you tell the 
interviewee they are not the subject or target of any criminal 
investigation, then the individual has to answer those 
questions or can be subject to some disciplinary action by the 
agency.
    Mr. Miller. If they try to restrict you, what do you do?
    Ms. Brown. The only kinds of restrictions that I have ever 
run into would be slowness in responding for paper that we 
might want to get. What we have always done in that case is 
cite the IG act and give them a reasonable length of time, and 
everything has always been produced. We don't need a subpoena 
within any government agency. We have the right to get the 
information. Outside of government agencies, where government 
money is involved, we can subpoena documents.
    Mr. Miller. You have other than CPA auditors.
    Mr. Huse. We conduct criminal investigations.
    Mr. Miller. How many are CPAs?
    Ms. Brown. We have about 600 auditors. I am a CPA; 30 
percent are CPAs.
    Mr. Miller. That is another question I had. I thought your 
budget is lower than the Department of Education's budget, and 
you are obviously much larger.
    Ms. Brown. We have two funding sources. The other is money 
mandated by Congress which has been designated from the trust 
fund because the return on investment is large. So we should 
get about $120,000,000 through that source, and then this 
discretionary appropriation is for all things other than HCFA 
or Medicare/Medicaid work.
    Mr. Miller. That was confusing to me. I thought you 
couldn't have a smaller budget than the Department of 
Education.
    By the way, Jim Kopf came to my district and talked to 
providers. There were some rumors going around. Just 
clarification, there was a hearing meeting which all of the 
different providers in my area had, and I appreciated that. It 
settled a lot of rumors. I don't know if that happens in other 
areas, but in my case it was very positive, and thank you for 
making that possible.

               EXPEDITED REGULATIONS AND INTERPRETATIONS

    One of the questions that has come up in hearings, as this 
administration ends, since President Clinton cannot run for 
reelection, there is a sense that a lot of things are going 
through regulatory-wise to rush through things before January 
20. Do you see that or is that an issue of concern to you or is 
that a political issue with us?
    Ms. Brown. It has not been an issue. The Secretary asked 
that I do attend discussions for final regulations before they 
are published, and we were able to give our input. We don't 
establish policy, but we do comment on everything before it 
goes through. Whatever rushing one can do on regulations, I 
can't see where that could be negative. It is probably 
progress.
    Mr. Miller. Pushing regulations or interpretations that are 
not really regulations, such as one which received a lot of 
publicity, what home offices are. There is one issue where they 
are talking about interpretation issues on wage and hour.
    Ms. Dalton. And the employee stock options.
    Mr. Miller. Those are not regulations but interpretations.
    Ms. Dalton. Right. We obviously see the regulatory agenda 
and are aware of what is going on. In terms of pushing 
regulations, we don't--as June said, I don't think----
    Mr. Miller. These issues are not regulations. I understand 
that they take sometimes too long. These are interpretations 
that are under the radar screen until someone squeals.
    Ms. Dalton. Mostly, it is advisory letters responding to 
individual questions from employers or workers. We currently 
are involved in the home office issue. As a result of a 
Congressional request, we are looking at that whole process at 
this time.
    Mr. Miller. And how they got into that?
    Ms. Dalton. The whole process of how these interpretations 
are going through the Department and what the decision points 
are, and we will be reporting out in about 2 months on that 
issue.
    Mr. Miller. I have talked to the Secretary of Labor about a 
hearing on overtime for these $40,000 to $50,000 a year driver 
salesmen for beer companies. They say minimum wage, these are 
$40,000 to $50,000. To me, it is just--it is an industry 
practice that they receive commission. So it isan 
interpretation to me, rather than they are trying to slip something 
through.
    Ms. Dalton. I personally have not seen any attempts to slip 
something through specifically. Interpretations have usually 
been responsive to particular question. That may not be how it 
appears on the outside. They certainly don't go through the 
full review with public disclosure as a regulation would.
    Mr. Miller. Thank you. We are glad you're there. You do a 
good job, and now I understand the operation better. Thank you.
    Mr. Porter. Thank you, Mr. Miller.
    I don't want to suggest that everything is good. The Javits 
Award program, recently a contractor sent out notices of awards 
to the wrong students; and, in effect, a number of students 
were told that they had received an award when in fact they 
were not eligible or had not received the award. The Department 
has indicated they will honor these letters and provide the 
scholarships to the students who were notified, even though 
they were not the winners. Has this kind of mistake ever 
happened before?
    Secondly, what work is your office doing to ensure that it 
will not be repeated?
    Thirdly, does the Higher Education Act require the payments 
to students erroneously notified?
    Further, is the contractor liable and should they be made 
to reimburse the government for this mistake?
    Ms. Lewis. I don't know if it has ever happened before.
    We currently are monitoring the situation. I first learned 
about it on March 1 in another hearing when the chairman asked 
the question of the Deputy Secretary, and in the last month we 
have been asking questions, and it is my understanding that the 
Department has not yet made a decision as to where the funding 
will come from for the additional awards.
    Mr. Porter. How much money is involved?
    Mrs. Lewis. The final figure depends on how many of the 
alternates actually accept. It is my understanding what they 
get is based on financial need. But there are estimates that 
range from $700,000 to $4 million, and I am not sure if these 
estimates are for the whole 4 years.
    In our conversations with the Department, we understand the 
General Counsel's office is looking at the question of the 
liability, if any, on the part of the contractor. It does 
appear, without knowing all of the specifics, that human error 
took place; and, ultimately, at the end of the day, it will be 
determined whether if it was human error by the Department or 
simply the contractor.
    It is my understanding that the Department has perhaps in 
response to a question to Dr. Fitzler at your hearing here a 
few weeks ago, indicated that it views itself legally 
responsible under the law.
    I have not done a separate analysis of that. I have looked 
at that law, but I have not seen any legal opinions that 
address that at all. But it is my understanding at this point 
in time that the Department has determined, presumably using 
the expertise of the General Counsel's Office and the program 
officials, that it is liable.
    I think I answered all four.
    Mr. Porter. I think it is kind of an unimaginable error 
that nobody checked this out before it went out, and whether 
there is a procedure in place before the Department to check 
this kind of thing seems to me rather important.
    Ms. Lewis. It is my understanding that this is the first 
time that the contractor rather than Department officials 
produced the letters.
    Mr. Porter. Maybe it should be the last time.
    Ms. Lewis. This was the first time that the mistake was 
made.
    Mr. Porter. To me, it is unimaginable something like this 
could happen without somebody checking before the letters 
actually went in the mail. And one would think that if it was 
the contractor who was responsible for this, the contractor 
ought to be made to pay for it.
    Ms. Lewis. It is my understanding that the Department is 
looking at that very issue.
    Mr. Porter. Ms. Brown, I understand that many of the path 
audits are still ongoing after almost 4 years. I raised a 
number of issues with your office several years ago concerning 
your agency's approach to these audits and their impact on 
teaching hospitals. Are these audits still ongoing and have you 
initiated any new ones over the last year? And how have you 
addressed the issues that I have raised and have been raised by 
many other members?
    Ms. Brown. Well, I have a summary of the PATH audits. The 
completed ones are 16, and ongoing we have 25. Then there are 
13 that could be considered PATH related. For the most part, 
they are qui tams, but they are on the same subject matter. So 
there are 13 separate reviews going on based on that. The total 
is 54 for the entire workload of that.
    I know you were very concerned, and we were equally 
concerned. I thought that was timely. That a complete review be 
made of the kind of information that had gone out to the 
hospitals upon which they based their decisions on how they 
kept their paperwork and what they charged for.
    We and General Counsel did a very extensive review of all 
of the information that had been circulated by the contractors. 
There are some 60 contractors, of course, that make all of the 
payments, and sometimes they issue guidance to the people who 
they submit their claims to. In some cases, it wasn't clear; 
and in all those cases where there wasn't clear guidance, we 
did not do PATH audits or ask that they be done by the 
individual hospitals in those areas.
    We did complete those where there was absolute clarity on 
the part of the guidance that had gone out, and there are still 
a few where there wasn't that much clarification. There were a 
few qui tams which are somehow related to those same issues. 
But other than that, we did not continue. And, of course, the 
time is running out for this, and there won't be more PATH 
audits.
    Mr. Porter. This right now is the 54. There won't be any 
more, in other words?
    Ms. Brown. No, unless it is from related workloads such as 
a qui tam that would come in.
    Mr. Porter. Our concern was a due process concern that, 
while we absolutely should make people meet the standards of 
the law, that in some cases it appeared to us that the 
practices of the past had led people to believe that they were 
meeting the standards when you might have believed that they 
were not. Has that reappeared, that whole issue of the 
contractors informing the hospitals of the--and the physicians 
of the standards expected of them?
    Ms. Brown. I think there certainly is clarification atthis 
time of exactly what the expectation is as far as both the coding side, 
how you would carefully code various things, and also whether or not a 
physician had to be present in order to charge.
    And, of course, that is one of those issues where the 
wording is that the physician has to be present in order to 
charge when one of the residents or some other student would do 
any kind of a procedure. For some reason, a lot of physicians 
were not present and felt that they could still make that 
charge even when they are out of the country or not on hospital 
grounds at all. In all of the reviews, and there was very 
extensive review, there was nothing that was ever sent out that 
said that the wording was incorrect or that you did not have to 
be present. We found nothing in conflict with that. However, it 
had become a practice in some institutions that the physician 
did not have to be present in order to charge, and we would 
make recoveries on the dollars charged in those cases.
    Mr. Porter. So have you held all of the audited 
institutions to that standard that the physician had to be 
present even where there was some ambiguity as to whether that 
was correctly told to them?
    Ms. Brown. Every place where we did the PATH audits, we 
discontinued where we didn't feel that there was clarification. 
Every place we did, we did apply that same standard.
    Mr. Porter. How much has been recovered from these or how 
much has been determined as recoverable?
    Ms. Brown. The PATH audits themselves, there has been 
$75,125,000 recovered. In addition, there were a couple of 
hospitals that we didn't think there was a violation of the 
rules, but there were some overpayments. So there is an 
additional $565,360 recovered that way, but they were not 
penalized in any way. That overpayment was discovered during 
the process. So there are actually six hospitals who did not 
have any offenses.
    Mr. Porter. But the rest had some offenses?
    Ms. Brown. Out of 12 that were completed, six had no 
offenses and six did.
    Mr. Porter. When you do an audit of this type and you have 
got 54 institutions, correct, that you will have audited, is 
there ever a review to determine what your costs were of 
conducting the audits, as opposed to what the recovery has 
been? In other words, kind of an efficiency ratio. Or do you 
consider when you do the audits this is a good deterrence for 
problems that might otherwise arise because they know that 
somebody is watching them?
    Ms. Brown. It is a little of each. Because when we start, 
we don't know what the return is going to be. We do make 
determinations on the return on investment overall but not 
necessarily per project. And I don't know----
    Mr. Porter. I meant overall.
    Ms. Brown. We do have that. Overall, if you take into 
consideration, of course, we have partners with the Department 
of Justice, Congress and others, but our return on investment 
for those things that we identified or recommended has been $98 
or $99 for each of the last 2 years per dollar spent.
    Mr. Porter. So that is a pretty good recovery rate.
    Ms. Brown. Yes.
    Mr. Porter. Well, I have a lot more questions. The time 
unfortunately has run out, but I have a lot more questions for 
the record for each of you. I would ask that you answer them in 
detail and thank you for the fine job that all of you are 
doing.
    The subcommittee will stand in recess until 2:00 p.m.
    [The following questions were submitted to be answered for 
the record:]








                           W I T N E S S E S

                              ----------                              
                                                                   Page
Boehne, K.P......................................................   523
Brown, J.G.......................................................  1493
Callahan, John...................................................   523
Cichowski, C.A.......................................167, 311, 339, 409
Cohen, Michael...................................................   443
Corwin, Thomas...................................................   443
Dalton, P.A......................................................  1493
Davila, R.R......................................................   339
Dickman, M.J.....................................................  1493
Dunston, Dr. Georgia.............................................   275
Fritschler, A.L..................................................   219
Halter, W.A......................................................   523
Heumann, J.E..............................................311, 339, 409
Holleman, F.S....................................................   523
Huse, J.G., Jr...................................................  1493
Johnson, Judith..................................................   443
Jones, Lonna...................................................131, 443
Jordan, I.K......................................................   311
Lattimore, Patricia..............................................   523
Lewis, Lorraine..................................................  1493
Love, Arthur.....................................................   443
McGuire, C.K.....................................................   167
McLaughlin, Maureen..............................................   219
McNeil, P.W......................................................   131
Prieto, Claudio................................................219, 275
Riley, Hon. R.W..................................................     1
Rodriguez, R.F.................................................311, 339
Schroeder, F.K...................................................   409
Seelman, K.D.....................................................   409
Skelly, T.P..................................1, 131, 167, 219, 409, 443
Swygert, H.P.....................................................   275
Thompson, W.S....................................................   339
Tinsley, Tuck III................................................   339
Warlick, K.R.....................................................   409
Woods, Greg......................................................   219


                               I N D E X

                              ----------                              

                        DEPARTMENT OF EDUCATION
                         Secretary of Education

                                                                   Page
Department financial statements (see also Department of Education 
  audits)........................................................    48
Chairman's procedural remarks....................................    48
Standards-based reforms--impact on achievement...................    48
Achievement......................................................48, 49
Teacher recruitment and retention................................    49
Gender issues....................................................    70
Research projects addressing gender issues.......................    70
Proposed new programs in FY 2001 budget request..................71, 78
FY 2001 budget request--new programs, history of request for.....    72
Education reform.................................................    72
School improvement programs......................................    72
School renovation...................................72, 92, 96, 99, 100
Rehabilitation services and disability research..................    72
Higher education.................................................    72
Education research, statistics, and improvement..................    72
FTE increases....................................................    73
Lender interest rate.............................................    73
Voluntary flexible agreement program.............................    74
Federal tax code effects on education............................    74
Tax code provisions..............................................    74
QZABs............................................................    75
School construction bonds.......................................75, 100
Qualified zone academy bonds....................................75, 100
School renovation proposal.......................................    75
Failing schools..................................................    76
Improving failing schools........................................    76
Tax-free savings accounts........................................    77
New versus existing programs.....................................    77
New programs.....................................................    78
Small, safe, and successful high schools program.................    78
Next generation technology innovation program....................    78
Advanced technology applications.................................    78
Mississippi delta initiative.....................................    78
Challenging coursework on-line...................................    78
Telecommunications program for professional development..........    79
Recognition and reward program...................................    79
Teaching to high standards state grants program..................    79
School leadership initiative.....................................    79
Teacher quality incentives.......................................81, 92
National activities for the improvement of teaching and school 
  leadership.....................................................80, 84
Hometown teachers initiative.....................................    80
Higher standards, higher pay initiative..........................    80
Transition to teaching: troops to teachers.......................    81
Early childhood educator professional development................    81
Project SERV (School emergency response to violence).............    81
Opportunities to improve our nation's schools (OPTIONS)..........    82
OPTIONS..........................................................    82
Strengthening technical assistance capacity grants...............    82
School renovation................................................    82
Teacher quality..................................................    92
Dual degree for minority-serving institutions....................    82
TRIO: College completion challenge grants........................    83
Research, development and dissemination..........................    83
America's tests..................................................    83
Program eliminations.............................................    83
Technology innovation challenge grants...........................83, 84
Star schools.....................................................83, 84
Next generation technology innovation............................    83
Telecommunications demonstration project for mathematics.........    84
Telecommunications program for professional development..........    84
Eisenhower professional development state grants.................    84
Eisenhower professional development federal activities...........    84
National education research initiatives..........................    84
Regional education laboratories..................................    84
National dissemination activities................................    84
Research, development, and dissemination.........................    84
Program Terminations.............................................    84
Goals 2000 state and local systemic improvement..................    84
School-to-work...................................................    84
Title I: Capitol expenses for private school children............    84
Impact aid: Payments for heavily impacted districts..............    84
Impact aid: Payments for federal property........................84, 95
Innovative education program strategies..........................    84
Ellender fellowships.............................................    84
Gallaudet construction...........................................    84
Comprehensive regional assistance centers........................    84
Occupational and employment information..........................    84
Web-based education commission...................................    84
Charter school district..........................................    85
IDEA funding.....................................................85, 88
Individuals with disabilities education act (IDEA)...............85, 88
IDEA regulations.................................................    86
Regulations......................................................86, 93
Discipline in schools............................................    87
Special education students.......................................    87
2000 census......................................................    89
Violence in schools..............................................89, 90
Prescriptive drugs and violence..................................    89
Title VI, Innovative education program strategies state grants...    90
GPRA indicators..................................................    90
Innovative education program strategies state grants.............    90
Chapter 2 program................................................    90
NICHD............................................................    91
National Institute of Child Health and Human Development.........    91
District of Columbia Schools.....................................    91
School construction.....................................92, 96, 99, 100
School construction initiative...................................   100
Class size reduction.............................................    92
21st Century community learning centers protram..................    94
Impact aid budget request........................................    94
Indian Schools...................................................    96
Impact aid construction..........................................    96
Title I hold-harmless requirement................................    97
Advanced placement incentive program.............................    97
New Millennium Classrooms Act (see 21st Century Classrooms Act)..
Technology.......................................................    98
21st Century Classrooms Act......................................98, 99
Digital divide...................................................    98
Technology literacy challenge fund...............................    98
Community Technology Centers.....................................    98
Davis-Bacon Act (see also School construction)...................    99
Audits (see Department of Education audits)......................
Department of Education audits..................................101-115
EDCAPS (see also Department of Education accounting system)......   101
Education Central Automated Processing System (see EDCAPS).......
Department of Education accounting system.......................103-115
Payee certification statements received, by reconciliation status   116
Grant award adjustments........................................115, 116

                Vocational and Adult Education Programs

Addressing needs of learning disabled adults.....................   150
Adult education request..........................................   133
Adult literacy initiative........................................   156
Assistance for nonprofit literacy organizations..................   164
Basic skills and English literacy................................   138
Biographical sketch of Patricia W. McNeil........................   140
Clear goals and accountability for results.......................   135
English literacy and civics education:
    Allocating funds.............................................   144
    Grants.......................................................   159
    Set-aside....................................................   143
Community technology centers...................................139, 145
    Expanding access.............................................   151
    Request......................................................   134
Congressional justification......................................  2450
Developing accountability systems................................   132
Earmarking tech-prep increase for competitive grants.............   155
English literacy and civics education:
    Allocating funds.............................................   144
    Grants.......................................................   159
    Set-aside....................................................   143
Funding formula for tech-prep....................................   142
Funding priorities...............................................   141
How States use Federal adult education funds to assist in the 
  transition from welfare to work................................   148
Impact of shifting funds between State grants and tech-prep......   144
Justification for tech-prep increase.............................   141
Literacy awareness campaign......................................   164
New name for vocational education................................   141
New vision for preparing for high tech careers...................   136
No funding for occupational and employment information...........   157
Opening statement of Patricia W. McNeil........................131, 135
Performance standards............................................   142
Serving welfare recipients in adult education....................   146
State grants for incarcerated youth offenders....................   160
Sustaining school-to-work after authority expires................   152
Teacher development initiative for contextual learning...........   162
Vocational education request.....................................   132
Vocational training for welfare recipients.......................   160
Witnesses........................................................   131

            Education Research, Statistics, and Improvement

Agency for Health Research and Quality...........................   174
America's tests................................................171, 195
Biographical sketch of Dr. C. Kent McGuire.......................   173
College test preparation for low-income students.................   195
Comprehensive school reform...............................182, 209, 212
Congressional Justifications.....................................  2805
Content of Internet advertising and classroom TV.................   181
Curriculum materials for early childhood.........................   176
Digital divide...................................................   176
District of Columbia public schools:
    Press release on Stanford-9 achievement data.................   186
    School reform project........................................   185
Dissemination....................................................   206
Education research on Spanish-speaking children..................   197
Education technology.............................................   171
Eisenhower math and science program..............................   208
FIE earmarks and oversight.......................................   181
Full funding of education research...............................   208
Gifted and talented education....................................   194
Interagency Education Research Initiative (IERI)...............183, 216
Labs and centers.................................................   199
National Assessment Governing Board (NAGB) conference............   205
National Clearinghouse for School Reform.........................   211
Other OERI initiatives...........................................   172
Parental involvement and local school accountability.............   182
Plan for an expanded research program............................   213
Reauthorization proposal for education research................174, 197
Regional education laboratories..................................   216
Research and student achievement.................................   179
Research based decision making...................................   206
Research, development, and dissemination.........................   168
Statistics and assessment........................................   170
Teacher preparation and training...............................178, 214
Voluntary national tests.......................................201, 209
Witnesses........................................................   167

   Office of Postsecondary Education and Office of Student Financial 
                               Assistance

Access America for students......................................   269
Child care access means parents in school program................   250
College enrollment...............................................   269
College tax credits..............................................   272
    Timing of higher education tax deduction and credit..........   254
Congressional Justifications:
    College housing and academic facilities loan program.........  2784
    Federal administration of postsecondary education programs...  2614
    Federal family education loan program........................  2636
    Higher education.............................................  2646
    Historically black colleges and universities capital 
      financing program..........................................  2794
    Student financial assistance.................................  2520
    Student loans overview.......................................  2582
Defense recruitment at colleges..................................   255
Department of Education web sites and their cost.................   252
Dual degree program..............................................   265
Ensuring efficient use of federal grants to colleges and 
  universities...................................................   236
Funding of the administration of the direct loan program.........   251
GEAR UP and TRIO...............................................237, 239
    GEAR UP sand TRIO coordination...............................   237
    TRIO versus GEAR UP..........................................   239
    Service provided to TRIO and GEAR UP students................   239
    Overlap of TRIO and GEAR UP..................................   241
    Proven History of TRIO.......................................   242
    Serving the TRIO population................................243, 248
    Title coordination with TRIO and GEAR UP.....................   244
    Purpose of TRIO and GEAR UP..................................   245
    Funding TRIO and GEAR UP.....................................   245
    Administrative support for TRIO..............................   247
    GEAR UP starts early.........................................   249
Government Performance and Results Act...........................   260
Historically black colleges and universities capital financing 
  program........................................................   259
International education..........................................   265
Javits authorizing legislation...................................   255
Javits fellowship award misnotification........................237, 258
    Funding Javits fellows.......................................   238
    Javits contractor liability..................................   238
Lower tuition costs due to improved technology and distance 
  learning.......................................................   236
Office of Student Financial Assistance and student aid policy....   257
Office of Student Financial Assistance communications staff......   258
Opening statement by A. Lee Fritschler...........................   219
    Student financial assistance.................................   222
    Higher education programs, access and retention..............   223
    Higher education programs, Quality and innovation............   224
Opening statement by Greg Woods..................................   226
    Fiscal year 2001 budget request for Office of Student 
      Financial Assistance.......................................   227
    Problems highlight needs for modernization...................   229
    FY 2001 administrative funding levels........................   229
    Dramatic increases in workload...............................   230
    A move to paperless processing...............................   230
Pell grants......................................................   271
Pell grant coverage of tuition costs.............................   251
Rising college cost..............................................   235
Student loan debt management counseling..........................   253
Teacher quality enhancement grants program.......................   272
TRIO college completion grants...................................   264
Underground railroad.............................................   262
Witnesses........................................................   219

                           Howard University

Accreditation....................................................   277
Adequacy of President's fiscal year 2001 request.................   299
Advanced degrees:
    Award........................................................   277
    Graduation rates.............................................   306
African-American entrepreneur opportunity........................   295
African-American population and the human genome.................   301
African-American research barriers...............................   303
Alumni.........................................................277, 300
American art CD..................................................   276
Articulation agreements..........................................   295
Biological sketch of Patrick Swygert.............................   293
Biomedical research..............................................   278
CD-ROM project...................................................   293
Congressional Justification......................................  2769
Decreasing the high school drop-out rate.........................   294
Diseases that disproportionately affect African-Americans........   300
Endowment........................................................   277
Facts 2000 publication...........................................   276
Faculty salary compression.......................................   307
Funding for University research..................................   304
Funding the humane genome team...................................   308
Future faculty fellows program...................................   294
GPRA.............................................................   299
Howard University Cancer Center..................................   301
Human genome research................................279, 303, 304, 305
Interdisciplinary Science and Engineering Center...............278, 296
Increasing minority scientists' involvement at NIH...............   297
Increasing minority advanced degrees in science..................   309
Introduction of witnesses........................................   275
Minority engineering graduation rates............................   307
Minority researchers and institutions stigmatized................   298
Number of degrees awarded........................................   278
National achievement scholars....................................   277
NIH support of Howard University.................................   308
Opening statement................................................   275
Peer review system...............................................   297
Prepared statement by Patrick Swygert............................   281
Research productivity............................................   277
Service 2000 publication.........................................   276
Special reports for the U.S. Congress............................   276
Student retention................................................   306
University partnerships promoting education......................   294
University partnerships with other schools.......................   293
University performance targets...................................   299
University's relationship with NIH...............................   302

           Special Institutions for Persons with Disabilities

American Printing House for the Blind (APH):
    Advisory Services..........................................357, 363
    Budget Request for APH.....................................357, 373
    Changes in Service Delivery..................................   406
    Educational and Technical Research.........................358, 365
    Educational Materials........................................   363
    Effect of Ergonomic Standards on APH Operations..............   405
    NIDRR Technology Request.....................................   370
    Original Budget Request......................................   376
    Outcomes of APH Research Projects............................   382
    Procedures for Selecting New Titles..........................   405
    Relationship between APA and RFB&D...........................   372
    Work with Publishers.........................................   371
Biographical Sketches:
    Robert R. Davila.............................................   355
    I. King Jordan...............................................   321
    Judith E. Heumann..........................................327, 346
    Tuck Tinsley III.............................................   367
Budget Request.........314, 323, 328, 329, 341, 343, 347, 350, 373, 375
Congressional Justifications:
    American Printing House for the Blind........................  2397
    National Technical Institute for the Deaf....................  2413
    Gallaudet University.........................................  2430
Gallaudet University:
    Advances in Technology.......................................   312
    Cochlear Implant Program.....................................   335
    Construction Plan............................................   331
    Construction Projects at MSSD................................   331
    Funding for Deferred Maintenance and Facility Imp314, 319, 324, 333
    Endowment Grant............................................325, 332
    Establishing a Sustainable Resource Base.....................   319
    Fiscal Year 2000 Increase....................................   316
    Fundraising Activities.......................................   314
    Government Performance and Results Act (GPRA)..............312, 330
    Graduation Rate..............................................   330
    Graduate Programs............................................   314
    Laurent Clerc National Deaf Education Center.................   313
    Leadership in Setting Standards for Best Educational 
      Providing Leadership in Setting the Standard for Best 
      Practices..................................................   330
    Student Academic and Career Achievement......................   317
    Student Internships........................................312, 334
Construction Funds........................................341, 344, 354
Endowment Grant Program...................................341, 344, 353
Government Performance and Results Act (GPRA).............312, 342, 330
National Technical Institute for the Deaf (NTID):
    Career Development...........................................   352
    Construction.................................................   354
    Endowment Grant..............................................   353
    Enrollment.................................................348, 352
    Employer Outreach............................................   372
    Fiscal Year 2001 Budget Request..............................   347
    Fundraising Success..........................................   348
    Government Performance and Results Act.......................   348
    Matching Funds for NTID Construction.........................   386
    Outreach.....................................................   353
    Performance Measures.........................................   392
    Research.....................................................   353
    Strategic Plan.............................................347, 351
    Student Accomplishments......................................   352
    Salaries and Benefits Increase...............................   393
    Salary and Benefit Increase at NTID..........................   395
    Satisfaction Surveys.........................................   404
    Scope and Content of NTID Dormitory Renovation Project.......   385
    Student Aid..................................................   404
    Technology and Hearing Impairment............................   368
    Technology and Visual Impairment.............................   369
    Tuition Surcharge............................................   384
    Universal Design.............................................   370
    Use of Extra Funds for NTID..................................   375
Operations and Initiatives.......................................   343
Major Activities and Program Initiatives..................324, 325, 344
Opening Statements:
    I. King Jordan...............................................   311
    Judith E. Heumann..........................................322, 340
    Robert R. Davila.............................................   347
    Tuck Tinsley III.............................................   356
Remarks by Hon. Anne M. Northup..................................   356
Remarks by Hon. Louise M. Slaughter..............................   339
Witnesses......................................................311, 339

 Special Education and Rehabilitation Services and Disability Research

Biographical sketch of Judith E. Heumann.........................   418
Budget request...................................................   414
Closing remarks..................................................   422
Congressional Justifications:
    Rehabilitation services and disability research..............  2290
    Special education............................................  2199
Opening statement..............................................410, 413
Rehabilitation services and disability research................412, 415
    Assistive technology alternative financing program.........416, 437
    Independent living.........................................416, 431
    National Institute on Disability and Rehabilitation Researc416, 432
    Performance indicators.......................................   428
    State grants budget request..................................   429
    Ticket to Work and Work Incentives Improvement Act...........   430
    Vocational rehabilitation....................................   415
Special education..............................................410, 414
    College students with learning disabilities..................   421
    Compliance...................................................   423
    Funding......................................................   419
    Grants for infants and families..............................   414
    Grants to States.............................................   414
    National Theatre of the Deaf.................................   420
    Parent information centers............................411, 415, 425
    Performance indicators.......................................   428
    Primary education intervention initiative....................   424
    Recording for the Blind and Dyslexic.........................   438
    Related services.............................................   420
    Research and innovation......................................   415
    State improvement............................................   414
    Technical assistance and dissemination.......................   415
Witnesses........................................................   409

    Elementary and Secondary Education and Bilingual and Immigrant 
                               Education

21st Century learning centers....................................   498
Accelerating change..............................................   448
Accountability for results.....................................446, 448
Advanced placement incentives test fee program...................   507
Advertising in the classroom.....................................   518
After School Centers.............................................   484
Arts in education................................................   490
Assistance with grant applications...............................   471
At-Risk students.................................................   494
Bilingual education academic outcomes............................   480
Bilingual education competitive priority.........................   464
Bilingual education support services.............................   482
Bilingual education.......................................454, 459, 483
    Instructional methods........................................   454
    Professional development.....................................   476
Biographical sketch of Arthur Love...............................   461
Biographical sketch of Michael Cohen.............................   453
Block grants.....................................................   466
Charter schools................................................449, 484
Class size reduction.............................................   444
Closing Achievement gaps.........................................   450
Comparison of administration school construction proposals.......   466
Competition for discretionary grants.............................   464
Comprehensive school reform demonstration program................   467
Congressional justifications:
    Education reform.............................................  1757
    Education for the disadvantaged..............................  1843
    Impact aid...................................................  1914
    School improvement programs..................................  1971
    Reading excellence...........................................  2117
    Indian education.............................................  2131
    School renovation............................................  2154
    Bilingual and immigrant education............................  2166
Construction and renovation of Indian schools....................   505
Continuing need for school construction..........................   519
Department computer security.....................................   514
Department of Education accounting system........................   511
Department of Education audits...................................   510
Department of Education grants transactions......................   512
Department Reconciliation with the Treasury--FFEL liquidating 
  account........................................................   513
Description of school renovation proposal........................   520
Dual immersion programs..........................................   455
Duplicate payments...............................................   513
Early Childhood Educator Professional Development................   450
Education research...............................................   472
Education technology.............................................   487
Elementary and Secondary Education reauthorization...............   458
Expanded learning opportunities for children.....................   444
Expertise in load administration.................................   496
Federal regulations on school construction (Davis-Bacon).........   509
Foreign language assistance....................................460, 478
Funding priorities...............................................   495
FY 1995 and 1995 audits..........................................   512
FY 1999 audit of department expenditures.........................   511
GAO report on school construction................................   497
Growth in bilingual populations..................................   481
High school reform...............................................   463
Hometown teachers................................................   488
IDEA funding for technology and media services...................   502
Immigrant education.......................................460, 469, 478
Impact aid funding for schools with military dependents..........   474
Impact aid property payments...................................504, 505
Improved educational opportunities for Hispanics and Native 
  Americans......................................................   446
Improving teacher quality........................................   449
Indian Education.................................................   451
Limited English Proficient students..............................   457
Low-performing schools...........................................   519
Military recruitment on school campuses..........................   473
National Board for Professional Teaching Standards...............   520
National education goals.........................................   462
National reading panel...........................................   473
National testing.................................................   513
Need for bilingual teachers......................................   476
Need for independent family centers..............................   516
Need for school construction.....................................   515
New American Schools.............................................   468
New Millennium Classroom Act.....................................   507
Number of immigrant students.....................................   470
Opening statement:
    Michael Cohen..............................................443, 447
    Arthur Love................................................454, 457
OPTIONS........................................................449, 489
Other professional development programs..........................   477
Other program highlights.........................................   451
Parent centers...................................................   516
Parental assistance center activities............................   517
Reduction in impact aid funding..................................   504
Reduction in payments for heavily impacted districts.............   475
Request for teacher quality programs.............................   444
Safe and drug free schools and communities.....................445, 463
    Safe schools/healthy students..............................487, 492
    State grants.................................................   491
    Technical assistance.........................................   493
School construction............................................495, 496
School modernization...........................................445, 447
School renovation and construction proposal......................   509
School violence..................................................   471
Small schools initiative.........................................   465
Small, Safe and Successful High Schools..........................   445
Status of Department of Education audit recommendations..........   512
Strategic plan...................................................   455
Teacher professional development.................................   468
Telecommunication project for mathematics........................   497
Time spent in bilingual education................................   479
Title I hold harmless............................................   506
Title Request....................................................   445
Title VI--Innovative education program strategies, State grants..   502
Tolerance........................................................   521
Verifying the validity of grant award adjustments................   513
Witnesses........................................................   443

                     Departmental Management Panel

Biographical sketch of John J. Callahan..........................   546
Biographical sketch of Kenneth P. Boehne.........................   586
Biosecurity strategic plan.......................................   609
Bioterrorism:
    Future plans.................................................   655
    Preparedness and response program............................   629
Blood plasma derivatives.........................................   612
Center for linguistic and cultural competence in health care.....   618
Clearing account.................................................   600
Closing remarks..................................................   594
Congressional Justificaitons:
    Department of Education......................................   678
    Department of Health and Human Services......................   745
    Department of Labor..........................................  1022
Critical infrastructure needs....................................   635
Department of Education:
    Financial management.........................................   548
    Management initiatives.......................................   547
Overview of budget request.......................................   547
Departmental appeals board.......................................   611
Disaster medial assistance team and national medical.............   629
Disease surveillance system......................................   657
DOL's progress in performance....................................   672
Financial audit..................................................   597
Fort McClellan...................................................   630
Funding for disparities research.................................   620
Funding to states for minority health............................   618
Grant-Back accounts..............................................   590
Grants information system........................................   610
GPRA progress....................................................   589
Health informatics initiative..................................606, 624
HHS management differences with IG recommendations...............   592
HIV/AIDS in minority communities.................................   633
Hospital and health are system linkage project...................   654
IG funding for financial audit of the direct loan program........   596
Introduction of witnesses........................................   523
Introductory comments............................................   587
LIHEAP supplemental..............................................   594
Management agreement with OIG finds..............................   590
Metropolitan medical response systems............................   626
National electronic disease surveillance system and the health 
  alert network..................................................   656
Nursing home initiative..........................................   608
OEP central and regional office staff............................   631
Office of Emergency Preparedness.................................   622
Office of Minority Health........................................   616
Office of Public Health and Science FTE..........................   609
Office of Research Integrity.....................................   623
Office of the General Counsel....................................   610
Office on Women's Health.........................................   620
Opening statement:
    Kenneth P. Boehne............................................   581
    John J. Callahan.............................................   523
    Walter Halter................................................   568
    Frank S. Holleman III........................................   550
    Patricia W. Lattimore........................................   554
Other services...................................................   609
PDD-63...........................................................   610
Performance measures.............................................   602
Pharmaceuticals/supplies caches..................................   630
PHSSEF:
    Costs for printing/reproduction and medical care.............   626
    Travel budget................................................   655
    Unobligated balance..........................................   625
Policy research..................................................   624
President's Council on Physical Fitness and Sports...............   616
Presidential decision directive #63..............................   635
Progress in performance measures...............................595, 674
Public health functions projects.................................   613
Railroad Retirement Board........................................  1022
Rapid toxin screen...............................................   633
Recruiting and retaining government employees....................   587
Reference laboratories...........................................   629
regional minority health consultants.............................   619
Reimbursable activities..........................................   608
Research and development activities..............................   632
Response team....................................................   629
Savings reported by the Inspector General........................   593
Service and supply fund..........................................   623
SSA concurrence with IG recommendations..........................   593
Surgeon General's report on youth violence.......................   605
Tobacco litigation...............................................   654
Task force on children's environmental health....................   614
Title XX funding.................................................   613
U.S.-Mexico Border Health Commission.............................   603
Water system vulnerability analysis..............................   654
Witnesses........................................................   523

                     Management Panel Hearing: DOL

Closing Remarks..................................................   594
Government Performance and Results Act...........................   558
    Progress...................................................589, 672
Grant-Back Accounts..............................................   590
Introduction of Witnesses........................................   523
Introductory Comments............................................   587
LIHEAP Supplemental..............................................   594
Management Goals.................................................   562
    Financial Management.........................................   563
    Information Technology.......................................   563
        Architecture.............................................   564
        Clinger-Cohen Implementation.............................   563
        Information Systems Security.............................   565
        Office Automation Tools..................................   564
        Strategic Planning and Initiatives.......................   563
Patricia Lattimore Opening Statement (DOL).......................   554
Patricia Lattimore Written Statement.............................   557
Savings Reported by the Inspector General........................   593
Strategic Goals:
    A Secure Workforce...........................................   559
        Lifelong Learning........................................   559
    Quality Workplaces...........................................   560
        Alternative Dispute Resolution...........................   561
        Assistive Devices........................................   561
        Balancing Work and Family................................   560
        Civil Rights.............................................   562
        Safety and Health........................................   561

        Departmental Management Panel: Railroad Retirement Board

Biography, Mr. Kenneth P. Boehne.................................   586
Buyouts........................................................580, 585
Funding Constraints, Effect of...................................   579
Government Performance and Results Act (GPRA).............578, 583, 589
Performance Measures, Progress in................................   674
Statements:
    Opening, Mr. Boehne..........................................   578
    Written, Mr. Boehne..........................................   581
Vision for the Future..........................................579, 585
Witnesses:
    Introduction of..............................................   523
    List of......................................................   523
Year 2000 Project..............................................579, 584

        Management Panel Hearing: Social Security Administration

Closing Remarks..................................................   594
GPRA Progress....................................................   589
Grant-Back Accounts..............................................   590
Introductory Comments............................................   587
Introduction of Witnesses........................................   523
LIHEAP Supplemental..............................................   594
Management Agreement with OIG Findings...........................   590
Opening Statement of William Halter..............................   566
Recruiting and Retaining Government Employees....................   587
Savings Reported by the Inspector General........................   593
SSA Concurrence with IG Recommendations..........................   593
SSA's Progress in Performance Measures...........................   676
Testimony by the Social Security Administration..................   568

                           Inspector General

Accomplishments..............................................1500, 1501
Approaches to Achieve Goals......................................  1500
Asthma Prevention Study..........................................  1560
Biographical Sketch of Lorraine Lewis............................  1499
Bioterrorism initiatives.........................................  1566
Child Support Enforcement........................................  1502
Clearing account.................................................  1552
Compliance Program Guidance......................................  1501
Congressional Justifications:
    Department of Education......................................  1569
    Department of Health and Human Services......................  1589
    Department of Labor..........................................  1657
    Railroad Retirement Board....................................  1736
Education audited financial statement........................1548, 1550
Field Offices....................................................  1562
Funding for Operation of OIG Offices.............................  1562
Funding Sources and Request..................................1500, 1502
FY 2001 Budget Request...........................................  1495
FY 2001 Performance Goals/Priorities.............................  1496
Government-Industry Roundtable...................................  1562
HCFAC Versus Discretionary Resources.............................  1502
HIV/AIDS Service Integration.....................................  1560
Improvements.....................................................  1540
Institutional Review Boards......................................  1566
Javits awards--erroneous notifications.......................1544, 1549
Measurement of Reports Goal......................................  1563
Medicaid Improper Payments.......................................  1563
Medicare Improper Payments.......................................  1501
NIH Agreements with Pharmaceutical Industry......................  1560
NIH Facilities Security..........................................  1560
OIG Performance plans:
    Department of Health and Human Services......................  1637
    Department of Labor..........................................  1708
    Railroad Retirement Board....................................  1753
Opening Statement.............................................1503-1511
Opening statement: Lorraine Lewis................................  1495
Overpayment Recovery Specialists.................................  1565
Performance Measurements...............................1561, 1563, 1566
Physicians at Teaching Hospitals.............1545-1546, 1555-1558, 1564
Purpose of Operations............................................  1495
Reimbursements...................................................  1559
Release of Work Papers...........................................  1558
Savings Resulting from OIG Work..................................  1564
Significant Accomplishments......................................  1495
Special education audits.........................................  1549
State Pension Fund Transactions, Federal Benefit from............  1561
TANF Surpluses...................................................  1567
Witnesses........................................................  1493
Work Papers, Release of..........................................  1558

                     Inspectors General Panel: DOL

Department Management Issues.....................................  1513
Expended Regulations and Interpretations.........................  1543
FY 1999 Accomplishments.......................................1523-1525
Fiscal Year 2001 Budget Request..................................  1512
Labor Racketeering Program.......................................  1513
Maintaining A Strategic Management Focus.........................  1513
Opening Statement, Pat Dalton, Acting Inspector General.......1512-1522
Program Activities...............................................  1512
Progress of Management Initiatives...............................  1539
Secretary's Goals................................................  1512

              Inspector General: Railroad Retirement Board

Biography, Martin J. Dickman.....................................  1532
Electronic Commerce Security.....................................  1568
Office of Audit..............................................1526, 1529
Office of Investigations.....................................1526, 1530
Statements:
    Opening......................................................  1526
    Written......................................................  1528
Summary..........................................................  1531

                         Inspector General: SSA

Cooperative Disability Investigations............................  1554
Electronic Commerce Security.....................................  1553
Identity Theft...................................................  1553
Inspectors General Panel, Witnesses..............................  1493
Progress in Managing Departments.................................  1539
Restrictions Placed by Agencies..................................  1542
SSA Inspector General's Opening Statement........................  1533
SSA Inspector General's Statement for the Record.................  1535

                                
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