[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 6
RELATED AGENCIES
Page
Institute of Muscuem and Library Services ....................... 1
Railroad Retirement Board ....................................... 37
Corporation for Public Broadcasting ............................. 137
National Education Coals Panel .................................. 181
Corporation for National and Community Service .................. 253
National Mediation Board ........................................ 443
United States Institute of Peace ................................ 537
National Council on Disability .................................. 717
Armed Forces Retirement Home .................................... 789
Naitonal Labor Relations Board .................................. 831
Social Security Administration .................................. 909
________
Printed for the use of the Committee on Appropriations
________
U.S. GOVERNMENT PRINTING OFFICE
64-439 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
----------
Tuesday, April 4, 2000.
INSTITUTE OF MUSEUM AND LIBRARY SERVICES
WITNESSES
BEVERLY SHEPPARD, ACTING DIRECTOR
LINDA BELL, DIRECTOR, POLICY PLANNING AND BUDGET
Introduction of Witnesses
Mr. Porter. The subcommittee will come to order. We
continue our hearings on the budget for fiscal year 2001 with
the Institute of Museum and Library Services, and we are
pleased to welcome the acting director Beverly Sheppard, and
before you begin, Ms. Sheppard, I want to say how much we miss
Jean Simon and what a wonderful job she did as the Chair of the
National Commission on Libraries and Information Science.
Her untimely death at a relatively young age was a shock to
all who knew her, and I knew Jean from very early in my public
career, and my father knew Jean Simon. She was a young
assistant district attorney in Chicago and served her first
assignment, I think, in his courtroom, and so he knew Jean
Simon before she was married to Paul, and we certainly welcome
your service here, but I do want to say that Jean did such a
wonderful job at everything she did and we are going to miss
her very much.
Opening Statement
Ms. Sheppard. I know that the whole of the library
community does indeed share in that loss and recognizes the
tremendous leadership that she brought to the field.
Good morning, Mr. Chairman. I would like to introduce my
colleague, Ms. Linda Bell, who is the director of policy
planning and budget at the Institute of Museum and Library
Services. I am very pleased to have this opportunity to appear
before you and I would also like to say on behalf of IMLS and
on behalf of the library community that we deeply appreciate
your long and committed support to the library community, and
we certainly wish you well in your future endeavors as well.
For the past year, I have had the privilege of serving as
the acting director of the Institute of Museum and Library
Services. I came into this responsibility from the position of
deputy director where I had the specific responsibilities of
oversight of the Office of Museum Services. Consequently this
has been a tremendous experience of learning more about the
library community and working with them, and it has been a year
of really truly understanding the very remarkable and essential
services that libraries bring to the public. I feel
extraordinarily privileged to be able to speak to the role of
Federal funding of libraries through the Institute of Museum
and Library Services, and through administration of the Library
Services and Technology Act.
The President's budget request calls for an investment of
$173,000,000. This represents an increase of $6,749,000 for the
Office of Library Services of the Institute of Museum and
Library Services. We see this as a true endorsement of the
irreplaceable and essential work of libraries across the
country. We see it also as an investment in the ability of
libraries to respond to the profound changes at work in
American society. And in particular, reflected in this budget
are the ways in which libraries address a couple of those very
profound changes, specifically the dramatic advances in
technology, the increasing diversification of our populations
and our communities, and the growing demands for learning
throughout a lifetime.
Libraries in this Nation have been called the people's
university. This is a fitting name. It refers not only to the
fabulous wealth of content found in library collections, but
perhaps even more significantly to the core commitment of
libraries to provide free and equitable access to that content.
Libraries are a great equalizer in an increasingly unequal
society. In a society that is continually growing in its
demands for technology and driven by technology, libraries are
narrowing the gap between the haves and have-nots. They speak
directly to what we call the digital divide. The Department of
Commerce's survey ``Falling through the Net'' found that
libraries are the number one point of access in the country for
those who do not have Internet access at home or at work.
The number of libraries that have Internet connectivity and
provide Internet access for the public continues to grow.
We know that today slightly more than 90 percent of public
libraries have some kind of Internet connection. There are
great needs however: needs for more workstations, more
efficient stations, more bandwidth, and more equitable
distribution.
Libraries also provide more than access. They train, they
organize, they guide. Librarians are skillful knowledge
navigators. They teach their users how to operate computers and
how to find their way through the glut of information that is
on-line today. They help them identify their needs and they
select the tools to find them. They research and develop the
systems that give everyday users a clear road map to the
quality information that they need.
And so we see libraries addressing the issues of
technology, not only through providing the hardware and also
providing the guidance, but libraries are deeply involved in
the research and the development of model projects that will
address broad issues of operational standards and how one is
going to be able to put on-line the most quality kind of
information.
This becomes especially important in the demand for
learning across a lifetime. In the 21st century, more learning
will take place through the use of technology. Earlier this
month, the Institute of Museum and Library Services, together
with the University of Missouri at Columbia, hosted a
conference called ``Web Wise.'' This was a conference on
libraries and museums in the digital world. This conference was
an opportunity to share the best practicesand to also focus on
the issues involved in the digital library development.
Since 1998 IMLS has provided grants to State library
agencies and individual libraries for research, digitization,
and management of digital resources. These grants are
addressing very important issues--critical preservation issues
and interoperability issues. Because of the leadership that we
have assumed in this direction, IMLS has been charged by a
presidential directive to work together with the National
Science Foundation, the National Park Service, and the
Smithsonian Institution to create a digital library for
education. This will be bringing together the cultural and
educational resources in museums and libraries for the public.
These collaborative efforts also concentrate on identifying
and building the infrastructure required to support what we
refer to as seamless access to the high quality learning
resources that are across disciplines and across geographical
boundaries. One way in which the Institute of Museum and
Library Services will build an Interagency effort is with the
National Science Foundation where we are jointly looking at
examining and researching issues of metadata and core standards
for information sharing.
So in the area of technology, the role of libraries is
increasing, is a leadership role, is a profound one, but we
also have the way in which libraries are addressing the whole
of community life. These libraries increasingly are truly
community centers. They create environments where families can
come together and interact; community officials and townspeople
can gather. Students can come after school hours and complete
their homework. Senior citizens are learning new skills. New
immigrants are learning English and even job seekers can come
and find advice. They are masters at building partnerships
within their communities, extending their reach throughout the
community by linking with countless others.
Next week the Institute of Museum and Library Services will
present its first annual award for libraries and their
communities. The National Award for Library Services will honor
four libraries for the outstanding work that they are doing to
address community needs. We are talking here about libraries of
all sizes, from the Queens Borough Public Library, which serves
a county that represents people from 178 different countries,
speaking 120 different languages, extraordinary, all the way
down to a tiny little elementary school library in Wyoming
where this library is the point of contact, not only for the
students working on computers, but for their families and
communities as a whole.
In going through this process, the nominations that we saw
were just amazing. They describe libraries of all sizes and
types again that spread from the urban library and its diverse
populations to the tiny rural libraries really reaching into
impoverished rural areas. We read of libraries that were
catalysts for economic development. They brought together civic
and social leaders from throughout their communities to look at
the needs of the community as a whole. We discovered libraries
that were taking a baby's first books into maternity wards and
encouraging parents to read to their children from the very
beginning. We saw them developing teen centers, giving teens
meaningful work after school.
We also saw their work extending across the life span with
creative mobile book carts moving into nursing homes and senior
centers. We found libraries in partnership with prisons, with
day care centers, with garden clubs, 4-H Clubs, Head Start,
junior colleges. Truly, the list of partners is as long as you
can possibly imagine. What we saw through this process is a
portrait of excellence in community service, and across the
country, libraries have become the cornerstones of their
communities.
Even assuming these very broad new roles, libraries
continue to provide core services. They are in constant demand.
In pursuit of lifelong learning, Americans seek out and depend
on their libraries in quite staggering numbers. Research
published by the American Library Association tells us that
Americans visit libraries 3.5 billion times each year. I always
have to look back at that. It is a billion times. 1.6 billion
items are borrowed annually from public libraries and research
librarians answer 7 million questions every week.
So clearly, libraries are not only responding to the
demanding challenges of an information age, to the changing
needs of their community, but they are continuing to serve in
this traditional role as well.
As you look at the budget request, we are seeking increases
in all program areas. I would like to take a moment to speak
specifically to the funding to the State programs. IMLS has a
highly valued relationship with the Chiefs of the State library
agencies who provide important feedback to us. They help us
understand the needs of the States and help us find ways to
meet them most effectively. They have also been sharing with us
rich stories of the effectiveness of libraries in their States.
One of the most popular elements of the program is that States
have the flexibility to use Federal library funds to advance
their highest priority needs.
The States provide the Institute with 5-year plans of how
they will spend Federal funds. We have been analyzing these
plans as well as the States' annual reports. We find that
States are using Federal funds to do all of the things which we
have addressed here: to increase information through technology
and narrow the digital divide, to establish partnerships that
extend the impact of service, and to provide, in the very
critically needed area of professional development,
opportunities for the training of new librarians and the
ongoing training of those who are working in libraries today.
We have brought with us a couple of charts. I think what is
particularly important in these is that they show how the aims
of LSTA are being met through the State library programs: Chart
A, ``A Lifetime of Learning at the Library,'' shows that
diverse user groups have been directly affected by these funds,
and what you have there, I don't know if everybody can see it,
that is an analysis of the target ages that are being served by
the variety of programs that we see in the State reports. They
range from the large blue area, the senior citizens with 30
percent of the programs to children, youth adults,
intergenerational programs.
If you are a little confused by the Section ``other,''
since all the ages are rather well-defined, wealso have some
programs that simply do reach out to the entire community and serve in
a whole variety of ages. So again, it is across the age span which we
feel is extremely important. And the other graph that you see to the
left, this is evidence of how the State libraries are meeting the needs
of all types of libraries. The LSTA legislation allows for State funds
to reach out to every kind of library, and what is being shown here are
the number of different funding awards given to the various types of
libraries.
On the left in purple represents the year 1998, and on the
right of each line there represents the number of awards
presented in 1999. You can see very clearly that as this
program is better understood and more effectively being used,
that awards are being given across the board to all types of
libraries. I point out that we see a spike in the K through 12
libraries, and that represents largely library systems helping
the school libraries with technology issues and bringing them
on-line and into the programs.
We are also seeing that as the program has become
increasingly well established, the number of applicants to the
program has increased dramatically. On the left you see the
number of applicants, the purple, and the other color, the
numbers that are funded. On the right in 1999, you see a
tremendous growth in the number of applications. I will also
point out that the need is very evident there too, that these
applications represent important projects and not all of them
certainly can be funded. It appears that little more than half
have been funded.
So we are seeing that one of the effective outreaches of
this program is very, very effectively taking place.
The Institute of Museum and Library Services is truly
uniquely positioned to understand the breadth of needs of the
library community nationally. Through ongoing dialogue with the
field, through carefully administered funded programs, we
recognize the growing needs of libraries to meet the changing
expectations of the American public. The President's budget
request for 2001 does indeed reflect the kind of investment
necessary to assist libraries in meeting these escalating
changes. We sincerely hope you will support this very important
investment of $173 million to support the library program.
Thank you.
[The information follows:]
THE FUTURE OF LIBRARIES
Mr. Porter. Thank you, Ms. Sheppard. You and I discussed
this before, but I want to discuss it on the record. We have
the capability today to scan theoretically at least to scan
every bit of information ever possessed anywhere in the world
into some kind of an Internet system. So we can put every book,
every page of every book on the line somewhere. Looking at the
latest technology, we have, I think it is a Palm Pilot 7 that
can access to Internet from your hand.
Looking out a relatively short time, I would guess, 10 or
15 years, and you have answered this in part with all of the
things that libraries do to interact with the community and
groups, and I understand that, but looking out 10 or 15 years,
is it possible that we will see libraries that have no books,
that maybe have a leather-bound Palm Pilot-type of device where
you can bring up the book you want to read, have each page on
it in front of you, and go curl up in the corner with your
computer book and read anything you want, or get any piece of
information you want?
And what if that is the case, and it seems to me we are
heading in that direction somehow, because of information
technology, what would then be the role of libraries if that
were available? And by the way, I would think that in such a
system, the government would want to provide to every single
individual in the country at least that capability. In other
words every kid, when they are able to read, they are going to
have to learn obviously the normal old way, but once they can
read, can't we give every child access to every piece of
information and can't we have all of our lessons and all of our
books taught in classrooms with this one single device that
will allow us to access any piece of information anywhere. I am
just interested to your comments on the record on that.
Ms. Sheppard. Well, I have to begin by saying I am not a
futurist in that I know exactly where all this is going, but I
think that the image that you have provided is an interesting
one. It is actually a question I have had to answer in a number
of ways when people talk about what is the future of the book.
There are various people who strongly believe that books are
very much a part of our culture and will continue to be--how
the format may change, of course, is another question. But I
think that the core question here that is very significant is
how will the role of libraries change. I think there are some
very key points to be made.
Number one comes through the definition used earlier, the
librarian as a knowledge navigator. We are finding more
significantly than ever that a well-trained librarian who
understands the process of finding and sorting information is
essential, that the kinds of minds that have created the
cataloging systems and the systems that organize information in
libraries today will continue to be absolutely essential to the
process of how we will find and explore information. So that
role will take on different levels of complexity butwill
remain, I believe, central to all of this.
I think there are other very important issues to think
about as well. One is making sure that students have access to
quality information, and one of the important things that we
are examining as we look toward the responsibility of a digital
library of images as well as text, is making certain that the
best of those materials are on board.
I think that the information literacy skills are going to
be increasingly important as we look forward to our future.
There is, right now, when you go on-line, a lot to weed through
before you can actually get to what you want. How are we going
to train and provide those information skills that enable our
citizens to judge material, to find quality material, to
evaluate it and to connect it? And that too has always been a
very central part of the library system.
Before we can even get to the point of having access and
finding our way through this tremendous number of resources,
which indeed can be very enriching, we need to develop those
kinds of infrastructures that support them. A number of our
grants right now, particularly in the research areas, are
looking at the ways in which you can go from image to text or
the ways in which people could access music where sound could
be brought in as a component here. We have disparate projects
going on in many places, and we feel that one of our most
important responsibilities is to make certain that those
projects will develop with a sense of interoperability and that
the research level of that structure is going to be one of the
most important ones we can provide.
So some of the areas that I think I can play futurist with
are again, the librarian as knowledge navigator, as the teacher
and supporter of critical thinking skills and literacy, as the
researcher that brings this access together. Those are
certainly three very important areas that are going to change
library service and reinforce what we know today.
Mr. Porter. Just to comment, if such a world as the one I
have described occurs, it seems to me that, in part, this is
already happening, we tend to withdraw from one another into a
technological interface with our computer and the information
on it, and it seems to me that there will probably be a swing
of the pendulum back to interacting with other human beings
rather than with the technology, but it is a worry in a certain
sense that we can get too involved in the technology and lose
the interaction among each other that it seems to me is
essential to a happy society, and it is so fascinating, and I
am retiring, as you mentioned.
I haven't yet gotten into this really very deeply. I am
about this far into it, but I know when I get a little more
time I am going to find it as fascinating as other people do
and want to get more and more involved in it, and try to access
all the different information and ideas that it provides.
FEDERAL ROLE FOR LIBRARIES
Let me ask now, did you mention the total cost of libraries
all over the country? I thought you did, but I am not certain
that I got the figure.
Ms. Sheppard. A total figure?
Mr. Porter. Absolute total figure.
Ms. Sheppard. I don't think I have that figure. I think it
is something that comes together from many, many different
sources to look at this budget. The total of Federal funding to
libraries is actually a small percentage of that whole. It is,
however, an extremely important endorsement.
Mr. Porter. All right. This is my question. It seems to me
that probably the role of the Federal Government in respect to
libraries is even smaller than the role of the Federal
Government in respect to K-to-12 education, which is, in
dollars, about five percent. Here I would bet the amount is
substantially less than one percent.
Ms. Sheppard. It is right around that one percent figure.
Mr. Porter. Given the fact that the States--if you look at
your chart, the one on the floor there, and the increasing
grants that came--I mean, if you look at K-12, 105 awards in
1998 and 4,852 the next year; is that correct?
Ms. Sheppard. Yes, that is correct.
Mr. Porter. 105 to 5,000. The huge amount of increase, I
don't know whether that translates into dollar terms, that is
the number of awards, I guess, not the dollar amount, but it
seems to me that as the States have themselves benefitted from
a growing economy, that they are obviously putting a great deal
of money particularly into technology, as you mentioned, for
their libraries, which is a very healthy thing. But I wonder if
you could kind of lay out for us the role of the Federal
Government in respect to libraries, and you have mentioned a
lot of different things that grants do, but is there a defined
role for the Federal Government? Is it similar to the role in
education? How far do we go into this process and how effective
is Federal leadership in marshalling assets and ideas and
approaches to the whole process, or are we just a player on the
edge?
Ms. Sheppard. Let me begin by saying that I think that
``player on the edge'' is not the definition here of Federal
funding. It is a very important question because I feel that
what we are seeing here is very significant. When I use the
word ``endorsement'' for the quality of libraries, it is not
only an endorsement for the quality in the work, it is also for
the library as a core democratic institution. There is, from
the beginning of the history of libraries in this country, an
alignment between the values that libraries represent and the
values that this country represents. The idea of presenting
equitable access to information and the idea that information
is an essential component of a free and democratic government
is a very profound statement that the Federal Government is
supporting.
I also think that there is the role of leveraging through
that endorsement the growing funds on the State and the local
and the private level in support of library funding. There is a
quality that one can hold up to say that the Federal Government
has supported, sees and recognizes the need for these kinds of
services.
And I also feel that the role that we have taken quite
profoundly in bringing all this together is a strong leadership
role that we are providing through our services, the
identification of core problems, and we are raising them to
national visibility. We are addressing and sharing best
practices as solutions to meeting those problems. We are
working on an interagency level to compound the impact of that
by working with other agencies like NSF, and we are also
providing leadership in some core areas like evaluation, so
that we are teaching and training.It is a communication process
that is happening that brings the national perspective to these issues.
So that small percentage, I believe, is truly leveraged into much more.
Mr. Porter. Thank you Ms. Sheppard.
Mrs. Lowey.
THE COST OF NARROWING THE DIGITAL DIVIDE
Mrs. Lowey. Thank you, Mr. Chairman. And thank you Mrs.
Sheppard, for your eloquent, articulate statement and for your
responses to the questions. And I must say, Mr. Chairman, I
can't help but remember a meeting I attended recently with
about 20 members of Congress. It is not important what the
subject was; we were awaiting a report, and the person who was
making the presentation said to the members, give me your e-
mail address and we will get it to you as soon as it came out,
and the whole room broke up laughing, and one of us had the
courage to say can we leave you a Fed EX envelope, and I think
many of us are in the position, although my husband will say to
me it is no longer cute, and I think it is time for people like
myself, and not you--I am sure you are more sophisticated in
the use of the Internet--to become proficient, and I almost
feel frantic when I visit our libraries and our schools in the
district, because I see that digital divide growing and
growing.
Even in my district, and I represent that district you were
talking about, but I also represent Westchester County, one of
the wealthiest counties in the Nation, but even in Westchester
County, you have some communities such as Eastchester,
Scarsdale, Rye, where the youngsters have a computer on every
desk and a computer at home and there are others districts in
Westchester County where they will go to a computer lab once a
week, and in Queens you discuss the challenges there. They are
absolutely enormous.
So I am so enthusiastic about the work you are doing in
regard to our libraries, and I appreciated the Chairman's
question, his last question about funding, because what I began
to think about as I was listening to and reading your testimony
is how urgent is this and can we wait for the States, and if we
submit RFPs, or if we fulfill this request for funding, if we
double that funding or triple that funding, could it be
absorbed, and I do appreciate the Chairman's question, and I
think we have to do a lot more thinking about that because the
longer we wait to make sure that every library is a community
center, and that library has the capacity to deal with our
community of learners, the wider our digital divide is.
So I have several questions, maybe the first one would be,
if we even double the amount or triple the amount, I just think
it is such a priority out there, and I think you have one of
the most exciting jobs. I won't say in the Hill, in the
government. Could it be absorbed? Maybe I should stop and ask
that first question.
Ms. Sheppard. I don't think there is any question that it
certainly could be absorbed. As we all know the costs of
technology are huge, and I basically outlined three areas. One
is providing the hardware, the tools, equipment, the bandwidth.
The second area is the training piece because bringing a
lot of people up to speed at the library, at various levels of
sophistication, and training the librarians to be able to do
this themselves, training the trainers. There are huge grants
right now, one in Illinois, which I think is particularly
interesting, where the College of Dupage is using distant
learning to reach about 5,000 librarians across the State to
bring them as quickly up to speed as possible.
Finally, there are those very core issues of the research
and the digitization process itself. I think that we are buoyed
in this by the fact that so many people are alert to these
problems, are looking at how we can work together, are trying
to find solutions. So between the private community and the
foundations that are saying this is priority, and our
leadership Federally, I think we can make a true difference at
this point.
PRIVATE SECTOR INVOLVEMENT
Mrs. Lowey. Do you have much interaction with the private
sector, the foundations, and the corporations obviously who
have an interest or whether it's personal or philanthropic
interests such as Gates who is in the news these days, or IBM
who are making major contributions?
Ms. Sheppard. I think that our interaction is largely one
of information sharing and also knowing that many of the
constituents such as the libraries in the country are working
with the Gates Foundation. I have spoken on panels with
representatives there. I have gathered at the offices here a
number of foundations to address common issues to see where we
are all examining funding and how we might be looking at issues
that affect all of us, and so that collaboratively we can make
really an impression in these issues.
Also, at the program that I mentioned a couple of times,
here the Web Wise conference, our keynote speaker was the
individual David Bolt, who produced the PBS series on the
digital divide and who brings PBS to these issues as well. In
all of these conversations, we all share what we are seeing, so
that we have a kind of common agenda that addresses these
issues from the individual perspectives.
Mrs. Lowey. Do you feel that the grants which you are
providing right now are structured adequately to encourage
private sector involvement? Because, as you and I know, there
are so many people out there who have been very successful as a
result of the digital revolution and would like to direct
resources towards institutions such as the library. Are we
doing all we can to encourage these activities to encourage
these partnerships? Is there any way we could do it or that we
could help by doing it more effectively?
Ms. Sheppard. That is a very interesting question. The
National Leadership Grant Program--that is, the part that we
direct specifically in a competitive process--that grant
process not only encourages, but requires a match, particularly
for the larger grants. So that we not only require a specific
match for those larger grants, we encourage a match also for
the smaller grants. This is one way, of course, of encouraging
and making it necessary for the grantees to identify other
sources, and these are largely private funding sources.
Again, recognizing the way in which the State program
operates, the State grants are allocated, as I said, through
State agencies. They determine where the funds are going, but
in reviewing where those grants go and how they are impacting
the community, again, it is a leveraging piece so we areseeing
a lot of private funding join that.
THE GENDER DIVIDE
Mrs. Lowey. I am obviously very interested in the digital
divide. I am also interested in the divide between the male and
the female population, which is not reflected in these
statistics, and I wonder if there's a digital divide between--
well, let us start with the adults, between the male and the
female adults. Are you aware of any research at looking at
these differences?
Ms. Sheppard. In my conversations with David Bolt, who did
considerable research in this area, he does feel there is a
gender divide, and that that gender divide begins in school
about the same point where girls cease to take as many of the
science classes as boys, and the same things are happening in
the computer area. There is a great deal of concern about that.
Mrs. Lowey. Well, if I may just pursue that, Mr. Chairman,
what are we doing about the concern.
We did have a demonstration. In fact, I introduced it when
I first got to Congress after talking with Carol Gilligan, I
did introduce legislation focused on encouraging young girls to
enter the fields of math and science, and I fear that we have
the same thing with computers.
Ms. Sheppard. I believe we do and we would have to do an
analysis of grants presently, projects being funded to explore
that. I don't really specifically know what those figures would
be from the kinds of programs we have. Basically the programs
that I think of immediately would not be gender-biased in any
way.
Mrs. Lowey. No, no I don't expect the programs to be
gender-biased, but what are we doing if this divide--if it is
assumed that this divide exists, what are we doing
affirmatively to decrease the divide and to direct, direct
training to encourage women, young girls?
Ms. Sheppard. Again, I can not speak to what those grants
specifically are doing, but I think at the core here is raising
and defining the issues so that the grants are well structured
to encourage the creative approach to how these problems can be
solved. That is exactly the reason, as you will see in the
budget, why we have an increased request for administrative
funds. The core of that is to increase our role in sharing
through conferences, through publications, through a larger and
more responsive Web site, exactly that of defining the issues
and then sharing those best practices that are addressing
specifically those core kinds of issues.
Mrs. Lowey. Thank you, and thank you, Mr. Chairman.
Mr. Porter. The Chair apologizes to the gentlelady from New
York, that she was placed on the clock and I wasn't. So let us
go back and forth one question each, and I want to emphasize
something that the gentlelady just raised, and I think that is
a very, very, very important issue. And I think that just
assuring that the programs are administered in an even-handed
way is not enough, as you said. I can see a real problem down
the line unless women, young women are encouraged to keep up
and provide leadership in this whole area of information
technology. It will be a divide in a lot of different ways, and
that seems to me to be one that is very, very worrisome.
Mrs. Lowey. Well, I just recently met Mr. Chairman and Ms.
Sheppard with Heidi Miller, who just left as the chief
financial office of Citigroup, and she is now at Priceline.com,
and we were talking about the numbers of women at her level, or
even near her level in the .com world, and they are nowhere to
be found. And given the impact of this whole industry on the
next generation, or the next 10 years, it is not even next
generation, I think we have to be concerned and try and focus
some attention on it.
FUNDING THROUGH TWO APPROPRIATIONS SUBCOMMITTEES
Mr. Porter. Absolutely. Let me ask a question about the
divide between jurisdictions here where part of your budget
comes out of interior, I think it is, and the rest of it comes
out of our subcommittee. First of all, how much money is the
museum part of the budget that goes to interior offhand; do you
know?
Ms. Sheppard. Pardon?
Mr. Porter. What is the request to the interior committee
this year?
Ms. Sheppard. $33,000,000.
Mr. Porter. $33,000,000?
Ms. Sheppard. Yes.
Mr. Porter. So it is a much smaller piece of the whole.
Ms. Sheppard. Yes, it is.
Mr. Porter. Do you see any problem with there being a
jurisdictional divide between, besides the fact that you are to
testify to two different subcommittees, present different parts
of the case, do you think it makes a lot of sense to divide
these two institutions part of your whole responsibility or
would it make more sense to be in one place or the other?
Ms. Sheppard. I was not present when all this came
together, so I am not certain of the decision-making and the
early history of it. I think that we have been able to work
with this effectively. I do think, however, there is something
to be said for streamlining the process so that it is not only
one testimony, but the way in which we operate internally as
well, such as keeping the books and things of that sort. We
feel that we are comfortable and are able to do this very well,
but we have had that question raised, and there are certainly
are areas where it would make sense to bring the two together.
Mr. Porter. It frankly seems to me that there is so much,
obviously, putting them in a single institute indicates the
relationship between libraries and museums, and then dividing
them in the Congress doesn't make a lot of sense to me at all.
Ms. Sheppard. Well, if I may just add to that, too. I think
one of the things we found most committing and interesting
about having brought the two together is that the collaborative
piece of this merger is really becoming an increasingly
important one. Not just through our programs and grants and
things of that sort, but we are also seeing that museums and
libraries do not function in these separate silos in the
outside world either. So our job in supporting their
educational goals, all of these things that do bring them
together the way in which they serve communities, makes it
logical to have one set of ways to address many of those
collaborative issues.
Mr. Porter. Well, I probably have no chance at all of
getting the museum base away from Ralph Regula, but it seems to
me it would make a lot of sense to have it in one place or the
other.
Mrs. Lowey.
TECHNOLOGY AND STUDENTS
Mrs. Lowey. I was just talking about how as we are putting
this bill together, perhaps we can put together some sort of a
demonstration, Mr. Chairman, really directed towards maybe even
girls in the middle school, because we were saying chances are
in elementary school they are all learning at the same level,
but in the middle schools and high schools, it seems at that
level they are interested in some other things. I am not sure
if I have any other questions. This is just such an interesting
topic we could probably keep you here for another hour, but I
just want to thank you again and tell you that I know the
Chairman and I appreciated the opportunities, the challenge,
the potential of your agency, and I for one look forward to
continuing to work with you and to see if we can be helpful
through the grand process in creating those partnerships that
have been very exciting.
In New York, I was talking to a young man who is one of
those making mega millions, and he uses the term ``knowledge
navigator,'' and not only is he contributing to computer
technology, but he is bringing in the trained people to work
with the students and to work with the teachers because he
found by just contributing the equipment, they were going
nowhere. And so through his work he is almost revolutionizing,
creating a revolution in the school.
So you have great potential, not only of providing the
dollars, but changing the way the schools, the libraries, are
working, and the links between what you are doing in the after-
school account are obvious, the comprehensive school, the whole
school reform that you have been working on. And I am very
excited about it and I look forward to continuing discussions.
Ms. Sheppard. Well, thank you very much for your words of
support. Those are the kinds of things that go a long way for
us.
NATIONAL DIGITAL LIBRARY
Mr. Porter. Can we talk about the national digital library
for a minute?
Ms. Sheppard. Certainly.
Mr. Porter. Can you lay out for us the concept of the
national digital library, and are you requesting the funding
for this in fiscal year 2001? And if so, how much?
Ms. Sheppard. The concept of a national digital library is
one that is based on an educational role, and it is the concept
of bringing together the resources in museums, in libraries,
the science and math education resources presently being
developed through National Science Foundation, the resources of
many of our national treasurers, the Smithsonian, the National
Park Service, and bringing them together in one gateway
representing the best of the quality information that is useful
and structured in a way that access to it is meaningful, so
that it has many, many different layers.
When we spoke about this last year, and it had just come up
as a special funds initiative. Although that funding was not
there in the long run, it did say to us that this is not just
an issue of content. This is an issue of very, very core
infrastructure. I have learned a whole lot about metadata and
all of these things during the course of this year, and we felt
that in order to address the issue, we needed to play a very
strong convening role to identify what are all of the issues
within the whole definition of this, which we did, and we are
very pleased that that process has led to an ongoing
conversation at an interagency level, and has also connected us
with some of the best and brightest out there addressing these
issues.
This year, yes, there is money here that moves in that
direction. On the other hand, it is not a specific line item.
We looked at the three components that were so clear to us.
Again, those questions of access and making sure that as
content comes together it is, can be accessed. The training
issues and then looking at the research demonstration projects,
digitization grants that we give on both sides of the library
to the museum, that all of these would be leading to developing
these resources in a connected way. So that the increases for
technology as a whole across these budgets, these steps are
measured--are included in there. There was no way to separate
this out. It just gave us a vision that we could see how we
could move toward it.
Mr. Porter. Clearly you have authority to do this. You
don't need authorizing legislation to set this up. You don't
need a special line item for it either, can simply take it out
of the funds that you have; correct?
Ms. Sheppard. That is correct.
Mr. Porter. I am not sure why you asked for a special
funding initiative last year to do this rather than simply add
it to your existing funding.
Ms. Sheppard. That is how we are doing this.
Mr. Porter. I am not sure why Congress said specifically no
either, and I ought to know the answer to that, but I don't.
Ms. Sheppard. I believe it was presented to us in that way,
that here is something we would like you to take on, and we
have been, from that moment, committed to working toward that
concept, because that is ultimately how we provide access.
Mr. Porter. The report language specifically denies funding
for some reason. And I certainly don't recall. Conference
agreement does not accept the President's request for
$5,000,000 for the National Leadership Grants for libraries,
for the National Digital Library Initiative. The increase in
funding for this account should be used for new awards under
the regular grant competition et cetera. I don't know whether
that came as a result of the Senate's position on it or not,
but in any case, it seems to me that this is a project that
ought to proceed, and my only question then would be, would the
increase that the President has suggested allow you to initiate
this and begin the process traditionally?
Ms. Sheppard. I believe that we have really started that
process through the way in which we have convened a----
Mr. Porter. So you are already really doing it.
Ms. Sheppard. And working with the National Science
Foundation, in particular, has been very effective because what
we are doing is sharing research, and those are the kinds of
things that perhaps were really in mind as this was started to
bring together everybody who would be a player, providing rich
content and finding ways to identify those issues. So we are
very much committed to seeing that we are not a separate pocket
somewhere doing our own thing, but bringing this together that
we are aiming toward a very central idea.
GOVERNMENT PERFORMANCE AND RESULTS ACT
Mr. Porter. Now, an important question but a more kind of
nuts-and-bolts kind of thing. Under GPRA, we have emphasized to
every department and agency, the importance of focusing on
results-oriented standards. We notice that mostof your
performance indicators are still very output-focused. And you are
measuring, for example, the number of awards made rather than what the
results of the awards might be. What do you have in your plans to
develop outcome-oriented indicators rather than these output-focused
indicators that we think represent the old way of thinking?
Ms. Sheppard. Let me begin by saying we are totally deeply
committed to the process of outcome-based evaluation. Everyone
on staff has now undergone training and we have developed a
long-term relationship with a consulting organization that is
helping us develop outcome-based training for every one of our
grantees. So in the process of identifying what outcomes mean
to us and how we are going to be able to report back the
outcomes of this funding, we have recognized that we have to
take that leadership role to learn it, understand it,
incorporate and share it with our grantees.
We have brought in eleven of the State agencies for
training, and we have trained a number of the various grantee
programs also, in fact we have training going on next week with
the Native American Enhancement Grants. We are also being
recognized by other agencies as having taken this leadership
role.
So I want to stress that very important commitment that we
have made to it. I think that part of the broader issue here is
the fact that the development of benchmarks is also an
important part of being able to put in place a number of the
performance indicators that will show that what the outcomes
are and that doing benchmarks for the range of library services
is pretty daunting, as you can imagine, with everything that is
out there.
So we have made quite a strong commitment also to
determining many of those benchmarks. We are presently putting
together a couple of strong survey instruments, one of which is
going to be working with the library community in determining
the extent right now of their digitization projects that are in
place and planned, and what the impact of those will be, so
that we can measure, as we do more in the way of digitization,
exactly what kinds of projects we are producing and what the
impact of Federal grants will be.
We have just undertaken the first analysis of the LSTA
State reports, which required a little bit of time. So what you
are seeing here gives you a little bit of some of the numbers,
but in those State reports we can also see, again, the role
that these programs are playing in terms of enhancing
connectivity as well as many of the other community services.
We did undertake and complete a lexicon project, which was
finding that initially these reports and 5-year plans from the
States used a lot of different language to describe some of the
same things. So we have pared that down to provide us that
vocabulary that we know that we can identify. We have also had
a history of doing a systematic use of advisory groups that we
bring in to help provide feedback, and impact feedback, in
particular, that process is underway and we regularly evaluate
each of the programs.
So I think that where we are going and how this performance
report is changing reflects much more of that baseline
information, benchmarking information. Our commitment to the
process of outcomes and then being able to share that I know
formation much better next year.
Mr. Porter. Well, I realize it is where you do a great deal
of grant-making or award-making, it is difficult to develop the
outcome performance standards, but there are many institutions
of the Federal Government that have the same type of role, and
you probably could draw on, perhaps, their experience in doing
that. We have a number of other questions for the record that
we would ask you to answer, Ms. Sheppard.
We appreciate very greatly the intellect and leadership you
bring to this role. You are doing a wonderful job there and
thank you for appearing today.
Ms. Sheppard. Thank you very much.
Mr. Porter. We will stand very briefly in recess.
[Recess.]
[The information follows:]
Wednesday, March 29, 2000.
RAILROAD RETIREMENT BOARD
WITNESSES
CHERRYL T. THOMAS, CHAIR
V.M. SPEAKMAN, JR., LABOR MEMBER
JEROME F. KEVER, MANAGEMENT MEMBER
Introduction of Witnesses
Mr. Porter. The subcommittee will come to order.
We continue our hearings on the appropriations for fiscal
year 2001 with the Railroad Retirement Board; and we are
pleased to welcome Cherryl T. Thomas, the Chair; Jerome F.
Kever, the Management Board Member; and V.M. Speakman, the
Labor Board Member, this morning. Welcome to all of you. Nice
to see you.
Ms. Thomas, why don't you proceed with your statement, and
then I assume Mr. Kever and Mr. Speakman have statements as
well, and then they can follow.
Opening Statement
Ms. Thomas. Thank you.
Mr. Chairman and Members of the Committee, good morning. I
am Cherryl T. Thomas, Chair of the Railroad Retirement Board,
and with me today presenting joint testimony are V.M. Speakman
Jr., the Labor Member of the Board, and Jerome F. Kever, the
Management Member of the Board.
Mr. Chairman, at this time, we would like to take a moment
to extend to you our best wishes as you close your
distinguished public service career. For 20 years you have been
a strong and trusted voice for the residents of the 10th
District as you have championed such important issues as the
protection of our environment, the advancement of human rights,
the pursuit of biomedical research, and the commitment of our
Government to ethical and fiscal responsibility. As Chairman of
this Subcommittee, you have provided fair and compassionate
oversight for programs vital to the health and welfare of
millions of Americans, including the Nation's railroad workers
and their families. On behalf of the employees of the only
Federal agency headquartered in the great State of Illinois, we
congratulate you and thank you for your leadership and your
willingness to serve.
The Railroad Retirement 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, the
Board paid $8.2 billion in railroad retirement and survivor
benefits to 748,000 beneficiaries, and unemployment and
sickness insurance benefits of $95 million to nearly 34,000
claimants.
NEED FOR ADDITIONAL FUNDING
While our financial reports on the funding of these
programs have been favorable, my fellow board members and I are
concerned that the agency's level of program service will begin
to deteriorate as a result of funding constraints this fiscal
year. Despite having significantly reduced staffing and
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. These important
initiatives would have strengthened our technological
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 to start
and/or continue certain mission-critical automation
initiatives, combined with the large number of employees who
have left the agency, will begin to erode our performance this
year and in years to come.
The President's proposed budget level of $92.5 million for
the Board's fiscal year 2001 administrative expenses is not
sufficient to address our concerns relative to our ability to
provide adequate service. With a budget of $92.5 million we
will be required to once again defer technology investments and
further reduce staffing.
We will, for example, be unable to acquire the technology
to pursue our automation initiatives. We will again be forced
to defer mission-related projects, such as future phases of a
system to allow applications to be taken on-line, in a
paperless, folderless environment, as well as providing ``one
and done'' customer service. Moreover, we will be unable to
expand our use of document imaging, a multiyear information
technology project that has already been successful in our
unemployment and sickness insurance program.
Finally, we will have insufficient funding to invest in
Internet security tools and technology essential to conducting
electronic business transactions in a safe, private, and secure
environment. Specifics on these investments in technology are
detailed in our written statement.
STAFFING REDUCTIONS
As to staffing, the Board has undergone dramatic reductions
in staffing over the last several years, which have affected
our ability to withstand further cuts. We estimate that the
President's proposed funding would be sufficient for only 1,112
full-time equivalents, which is 70 FTEs less than we started
with in fiscal year 2000 and 84 FTEs less than we utilized in
fiscal year 1999. At the President's proposed level of $92.5
million the FTE reductions from 1993 through fiscal year 2001
are projected to total 586, or a reduction of about 34.5
percent of the Board's total staff. This is almost double the
reduction of 18.2 percent projected for total civilian
employment in the Executive branch of the government and nearly
four times the reduction of 8.7 percent projected for
nondefense employment shown in the Analytical Perspectives
published as part of the President's proposed budget for fiscal
year 2001.
In order to meet the staff reductions resulting from budget
constraints in fiscal year 2000, the Board was granted
authority to offer buyout payments through March 30th, 2000.
The Board has fully utilized this authority, approving buyouts
for 67 employees, which reduces our costs by approximately
$550,000 this year and as much as $4 million annually in fiscal
year 2001 and beyond. Since fiscal year 1994, we have granted
buyouts to 244 employees.
Mr. Chairman, we thank you and the Members of the
Subcommittee for your continued support in granting us buyout
authority, which enables us to avoid a significant reduction-
in-force and even greater disruption to our operations.
We fully recognize that, over time, we can and must perform
our operations with even fewer employees. However, if we
continue to reduce our staff before we have the proper
automation support in place, our customer service, including
benefit payment accuracy and timeliness, will suffer.
REQUEST FOR ADDITIONAL FUNDING IN FISCAL YEAR 2001
We estimate that the Board will need an additional $2.5
million in fiscal year 2001, for a total administrative
appropriation of $95 million.
First and foremost, we will need an increase of
approximately $2 million for automation initiatives to achieve
our long-term objectives of proper efficiency and continued
quality customer service. In addition, we will need
approximately $500,000 for salary and benefits to maintain our
current level of customer service by funding1,119 FTEs in
fiscal year 2001.
INFORMATION TECHNOLOGY
The Board's Capital and Information Resources Management
Plans, both of which support the agency's Strategic Plan,
outline a comprehensive approach toward maintaining and
enhancing our customer service. These plans, however, cannot be
implemented without closing the sizeable gap between our
planned initiatives and those which a reduced level of funding
would permit.
As you consider our request for funding of $95 million in
fiscal year 2001, it is important to remember that the Board
administers entitlement programs established by the Congress.
Our basic entitlement programs are not subject to discretionary
spending; payroll taxes paid by railroad employers and
employees are their primary source of financing. In order for
us to manage the significant cuts in staffing we have already
experienced, as well as additional cuts in future years, our
agency must have the information technology tools in place to
help maintain an adequate level of customer service.
RENTAL CHARGES BY THE GENERAL SERVICES ADMINISTRATION
Last but not least, it should be noted that our funding
request provides for paying actual costs for rent to the
General Services Administration, rather than commercial rates.
We are continuing to work with our authorizing committee, the
House Transportation and Infrastructure Committee, toward
enactment of our proposed legislation to make this arrangement
permanent.
Concluding Remarks
In concluding our testimony, we want to stress the Board's
continued commitment to improving our operations and providing
quality service to our beneficiaries in the face of tight
budgetary constraints. Without the appropriate level of funding
support from the Congress, we will be unable to meet our
objectives and fulfill our commitments to our constituents.
Yet again, Mr. Chairman, I thank you for the opportunity to
appear before you today. We will be happy to respond to any
questions you or the Members may have. Thank you.
Mr. Porter. Thank you.
[The information follows:]
Statement By Mr. Kever
Mr. Porter. Mr. Kever.
Mr. Kever. Thank you, Mr. Chairman.
Chairman Porter, it has been my distinct professional and
personal privilege to testify on behalf of the Railroad
Retirement Board before this Subcommittee since my initial
appointment in 1992 and especially on a personal level since
you have been my Congressman representing the 10th District of
Illinois.
While I will miss your leadership and that of your staff on
this Subcommittee, I would be remiss if I did not thank you
personally on behalf of the employees of the Railroad
Retirement Board and the railroad industry for all of your
support and interest in our Chicago-based agency while you have
been a member of this Subcommittee. It was certainly very
helpful for us to have a fellow Illinoisan on the Committee and
as Chairman.
I wish you well in whatever you pursue after your
distinguished career in Congress and trust that you will stay
involved in government issues in some capacity. And I thank you
very much.
[The information follows:]
Statement By Mr. Speakman
Mr. Porter. Mr. Speakman.
Mr. Speakman. Mr. Chairman, I don't have a formal
statement, but I would also like to echo the sentiments of my
colleagues in expressing the very best wishes for you in your
future endeavors. Clearly, you have demonstrated a great deal
of leadership and openness in the vital issues at the Railroad
Retirement Board. I think you need to know, if you don't
already know, this fact has not been lost upon the constituency
we represent; and rail labor would also wish to thank you and
wish you well in your future endeavors.
ADMINISTRATION'S PROPOSED LEVEL OF FUNDING
Mr. Porter. Ms. Thomas, Mr. Kever and Mr. Speakman, thank
you very much for those kind words. I certainly appreciate them
very much. This agency has been one that we think is very well
managed, and I am kind of dismayed that the President doesn't
put the right amount of money in his budget for you. Why is
that?
Ms. Thomas. You want me to answer that?
Mr. Porter. Yes, I do. I assume you sent up 4.8 percent to
OMB and they sent back down 2 percent, which is under
inflation, even below the inflation rate we have today. Why?
Ms. Thomas. I think that the matter which has been
explained to us is that we have to remember that, although we
can go to the Congress and ask for more, that we are really a
government agency and we have to experience the cuts just like
everyone else does, which I certainly can appreciate. But I do
believe that in some respects we are a bit different, and we
have a customer base that we need to support who is accustomed
to a certain kind of service from us. And these are, to a
degree, private funds; and we think that we need the money to
provide the customer service and the increased technology that
we must have. But the explanation that we get, basically, is
that everyone has to participate in the cuts that are decided
by others than ourselves.
Mr. Porter. I was going to say, what cuts? There are a lot
of things the President has increased hugely in his budget.
I think it is very disingenuous--I have said this many
times before. I think it is disingenuous of the White House to
send up a budget that they know is too low and we know allows
them to plus up other accounts and therefore play to
constituencies knowing that we believe that this number makes
it very difficult for you to operate. It is not done once; it
is done time after time after time. And I just think the
President well knows that you are not going to be able to do
your job with this kind of increase, and we know it. It is a
matter of getting the resources.
As I have said many times before, this agency is a very
well-run agency. You have looked at the need to set up
standards, and you have set them and strived to make them a
reality in each case, and we think the money is very well
managed. But, you know, it makes it very difficult for us when
the President recommends a 2 percent increase and it is in a
budget where a lot of the other increases are supported by user
fees and taxes that aren't and he knows aren't going to be
enacted. So we will, of course, do the best we can, but it is a
problem.
One of the other things that is awfully interesting to us
is that if you were Donna Shalala and sitting there and he had
cut your budget, Donna Shalala would say, we agree with the
President. You know all the Departments never say they disagree
with the President's budget. The independent agencies, you are
not the only one, will come here and say, the President
shortchanged us, and we need more money. We like the refreshing
candor of your telling us that it is not a workable budget, and
the number is too low.
Take me back through the--you have done all the buyouts you
can do, is that correct?
AGENCY BUYOUTS
Ms. Thomas. We have done all the buyouts we think we can
do, absolutely. You know, some of those--about 33 of those were
early retirements plus the buyouts, for a total of 67 people
who left; and, actually, the buyouts help us to avoid a
reduction-in-force which would be more damaging to what we are
trying to achieve at the Railroad Retirement Board.
Mr. Porter. $500,000 is the difference between your number
and the President's number, salary and benefits, while $2
million is for information technology investments, correct?
Ms. Thomas. Correct.
Mr. Porter. And would you reduce your workforce to
implement the technology initiatives or are we just simply
putting them off, if you had to have that kind of choice?
INFORMATION TECHNOLOGY INVESTMENTS
Ms. Thomas. We would have to--actually, at this point, Mr.
Chairman, we would have to delay the information technology
initiatives. At this point in time, we just cannot lose any
more people. We have to service our customers, and they expect
that.
Mr. Porter. The $874,000 for information technology in the
President's budget, does that allow for development of new
systems or is that just maintenance of the systems you already
have?
Ms. Thomas. It is insufficient to allow for new technology
systems.
Mr. Porter. So that would simply keep everything in place.
Ms. Thomas. Going.
Mr. Porter. And maintain them.
Ms. Thomas. Right.
Mr. Porter. And provide no new money for new technologies.
Ms. Thomas. Correct, insufficient funds. We might be able
to do something, but it certainly wouldn't be worth it because
we need the entire package.
Mr. Porter. If the $2 million were provided, would that be
a one-time investment or would you need that annually into the
future?
Ms. Thomas. Well, as you know, these systems continue to
evolve. As far as we can tell, that is what we need to get to
where we want to go in terms of the folderless, paperless
environment. You are going to need some percentage, of course,
over the next few years to update, to make sure you are keeping
abreast of the changing technology, but, as far as we estimate,
that is what we need in the coming year, and we would need some
percentage in the ensuing 10 or 15 years, too, for updating but
not $2 million every year, no.
[The information follows:]
The agency's Strategic Information Resources Management
Plan presents estimated funding for information technology
expenditures through fiscal year 2004. This information was
included in the Fiscal Year 2001 Budget Submission sent to the
Congress in September 1999.
PROPOSED REGULATION
Mr. Porter. Okay. At last year's hearing, you provided your
response to a document put together by your predecessor, Mr.
Bower, entitled Suggestions for the Future. One of the
suggestions was for the RRB to finalize four outstanding
regulations. In your response you indicated that three of these
had been finalized and implemented. The fourth had to do with
reduction and nonpayment of annuities by reason of work which
you said had raised concern among both rail management and
labor.
Finalizing this rule was put on hold until the year 2000
computer problem was resolved. Now that Y2K is out of the way--
and, congratulations, no problems--what is the status of this
regulation and can you tell us more about the thrust of the
regulation? What are the concerns of both management and labor
regarding it?
Ms. Thomas. Well, Management and Labor, of course, are
still working out part 230, but the proposed rulemaking is
still being considered by the Board. But I would think that at
this point in time we have to remember that H.R. 5 certainly
would have an impact on part 230. So, at this point in time, we are
still looking at it, but we are waiting to see what happens with H.R. 5
because that would amend part 230. So at this point in time we aren't
doing anything with that because of H.R. 5, and I think that maybe my
colleagues would agree with that.
Mr. Porter. And that is for Transportation?
Ms. Thomas. That is correct.
Mr. Porter. And what is the prognosis for their action?
Ms. Thomas. As far as I know, that is going to be passed. I
don't have any other information to the contrary.
Okay. It has passed the House.
Mr. Porter. It has passed the House and Senate already.
Ms. Thomas. The earnings test, it has passed the House and
Senate.
Mr. Porter. Okay. I wasn't focusing on what H.R. 5 was.
That would make a good deal of difference in what you have to
do.
PROPOSED LEGISLATION CONCERNING GSA RENT
At last year's hearing, we discussed the potential impact
of the RRB, a trust fund agency having to pay full rent cost to
GSA. You have traditionally only been held to paying actual
cost to GSA, but they have pushed for you paying full rent cost
in 1999 and 2000, but they have been discouraged from
instituting this policy by OMB and the Congress. You have
already told us what the situation is and the fact that you are
pushing for actual costs, and maybe you can fill me in a little
bit more on what GSA's response has been to this point. Is this
the legislation that is pending before Transportation?
Ms. Thomas. Yes.
Mr. Porter. This is the legislation.
Ms. Thomas. Yes.
Mr. Porter. Okay, and do you know what they are likely to
do?
Ms. Thomas. Well, what we are hoping they are going to do--
and we do feel that we have some support--is to pay actual
costs. Social Security is in the same position we are actually
with this, and this would increase our budget request by $3.8
million, which we don't have, and it has not been provided for,
and we think that the manner in which this has been handled for
the last 26 years ought to continue.
We don't think that the trust funds should be utilized for
building public buildings and courthouses and some of the
things that GSA said that money needs to be utilized for. So we
are hoping that we have presented an argument before the
Committee that they will understand that these are trust fund
moneys that the retirees have a right to, and they shouldn't be
utilized for building public buildings.
Mr. Porter. And if the legislation were to pass and be
signed this year, how would that affect your budget numbers?
Would that add $3,500,000?
Ms. Thomas. It would add $3.8 million to our costs if GSA
were to have the right to charge us commercial rent.
Mr. Porter. Otherwise, that amount goes to GSA.
Ms. Thomas. Correct.
Mr. Porter. Okay. What is going to happen here is that we
are going to go to have a vote and that the minority has
requested that we hold no further appropriation hearings
because there is a supplemental appropriation bill on the
floor; and we are going to have to comply with that and
complete our hearing here this morning with your agency and
postpone the Libraries Institute until this afternoon.
AGENCY REORGANIZATION
One of the suggestions that Mr. Bower made was for the RRB
to undertake additional consolidation reorganization and
downsizing. Your response indicated that in December, 1998, you
approved a reorganization plan for the three-person executive
committee to be expanded to five voting members and one
nonvoting member. This plan was instituted in January, 1999.
You also indicated that you had hoped that this action would
filter down below the executive level. Has this reorganization
had the effect that you hoped for? Was the request and approval
of buyout authority part of this plan? And what other actions
are planned affecting the size and organization of the Board?
Ms. Thomas. Mr. Chairman, I think that what we have done
will, in effect, overall, in years to come, make the agency, if
you will, lean and mean, much more streamlined, much more
effective. Of course, these things do take time. I was very
ambitious, being a new Chair, and you want to get everything
done right away so that you come back the next year and say we
have done all of these things. It is a process, and it is
working.
Just recently, we have added a new Senior Executive
Officer, if you will, to the Executive Committee. We think that
that will indeed help us to coordinate and communicate much
better between the three Board Members and the agency's
Executive Committee.
I would say that, overall, we have experienced a very good
year. We have had a lot of positive things happen.
But I must say that when you are told that you have to take
lots of cuts and that you are possibly facing a RIF, it is
disruptive. So, to some degree, we were trying to figure out,
if we did not get the buyout authority, what we do and that
would cause a RIF. So sometimes it tends to stall the programs
that you have going because you have to figure out what you
would do if you don't have the people.
In essence, what happened is we got the buyout authority,
and we could allow the people that wanted to leave, and we are
back at the table putting things in order. But, overall, it is
going very well. We have very good people who have been there a
long time. So they understand where we are going and how things
need to work. So I would say, overall, it has been very
positive.
Mr. Porter. Thank you, Ms. Thomas.
Mr. Dickey, we are going to have to adjourn this hearing
after we recess for the vote. We are going to have to--the
minority has requested that we hold no further hearings this
morning because the supplemental is on the floor. So I am going
to call on you and ask you when you finish your questions then
to recess until two p.m.
Mr. Dickey [presiding]. I will do that. I will need to
talk quickly. I have got some introductory language. I want to
see if we can do it this way.
60/30 PROPOSAL
Does the Railroad Retirement Board endorse the 60/30
proposal? Do you know what that is?
Ms. Thomas. Mr. Chairman--no, Mr. Dickey, I do not.
Mr. Dickey. I am not the Chairman. I am just kidding you.
Ms. Thomas. I mean Congressman.
Mr. Dickey. What it amounts to is the stakeholders in the
railroad retirement system agreed on a proposal to allow for
retirement at age 60 after 30 years of service. Do you have a
position on that?
Ms. Thomas. At this point in time, rail management and rail
labor are discussing that issue, and they are trying to come to
some sort of an agreement relative to some other issues that
they have. I, as the Chair, am trying to remain neutral in that
respect. If they should decide that----
Mr. Dickey. Excuse me, I am going to have to interrupt you.
I just wondered if we can get that answered later. We can do
it.
[The information follows:]
Ms. Thomas. The agency has not as yet taken a position on
the proposed legislation.
RAILROAD EMPLOYMENT
Let me ask this question. Much like the social security
system, those paying into the system today finance current
railroad retirement. There is an important link between how
many people companies hire and the security of the current and
future retirement system. Does the Railroad Retirement Board
have any guidance to its constituent companies with regard to
hiring?
Ms. Thomas. No.
MAXIMUM HEALTH BENEFIT
Mr. Dickey. Okay. Currently, the railroad retirees receive
an annual $75,000 maximum health benefit. As we all know,
health costs are increasing and a few simple procedures can
exhaust this total very easily. Does the Board plan to increase
this limit based upon current and projected health care costs?
Ms. Thomas. We don't have anything to do with that at all.
EARNINGS LIMITS
Mr. Dickey. The Congress just approved an adjustment to the
social security earnings limit. Does such a limit exist for the
railroad retirement system and, if so, what is it?
Ms. Thomas. It is the same limit.
Mr. Dickey. Are there any plans to increase that amount?
Ms. Thomas. Not at this point in time.
LEGISLATIVE PROPOSAL
Mr. Dickey. Okay. Currently, elected officials will lose
their railroad pension if they accept money for their elected
position. One of my constituents is a council member in Pine
Bluff, Arkansas, and is affected by this problem. Are there any
plans to fix this problem and what can we do as Congress to
address this?
Ms. Thomas. You are proposing legislation, correct----
Mr. Dickey. That is correct.
Ms. Thomas [continuing]. In that regard.
Mr. Dickey. Are you going to be able to endorse it?
Ms. Thomas. I would need to review the specific proposal
before I could say we would or wouldn't support it.
Mr. Dickey. I apologize for hurrying through all of this.
Ms. Thomas. Yes.
Mr. Dickey. Will you hit the gavel for me?
We are adjourned. Thank you very much.
Tuesday, March 28, 2000.
CORPORATION FOR PUBLIC BROADCASTING
WITNESS
ROBERT T. COONROD, PRESIDENT AND CEO, CORPORATION FOR PUBLIC
BROADCASTING
Introduction of Witness
Mr. Porter. The subcommittee will come to order. We
continue our hearings on the fiscal year 2001 appropriations
with the Corporation for Public Broadcasting and we are pleased
to welcome this afternoon, Mr. Coonrod. Mr. Coonrod, it is good
to see you. Why don't you proceed with your statement and then
we will have some easy questions.
Opening Statement
Mr. Coonrod. If they are as easy as the last 2 years, Mr.
Chairman, it will be interesting. Thank you. I have submitted
testimony for the record, but if I can make a few brief opening
comments, I would like to take this opportunity to congratulate
you on the 20 years that you served in Congress and the 6 years
that you led this subcommittee. From your first day as
chairman, you provided thoughtful and conscientious leadership
to spur us in public broadcasting to improve and better our
practices. We have taken your leadership seriously and
responded with important and fundamental changes in public
broadcasting, and we appreciate the work of the subcommittee to
secure funding for CPB year after year. We are especially
grateful for your strong support and enduring commitment to
public broadcasting.
CPB BUDGET REQUEST
Last year, Congress funded CPB at $350 million, for fiscal
year 2002. This year we are seeking an appropriation of $365
million for fiscal year 2003. That $15 million increase would
largely be distributed to public television and radio stations
through the television andradio community service grants. At
the same time, Mr. Chairman, we are seeking $20 million in fiscal year
2001 to assist in the conversion of public broadcasting to digital
technology, as mandated by the Federal Communications Commission. This
money would be used primarily to support digital program development,
production and distribution.
OVERLAP MARKETS
As this is my last opportunity to testify before you as
chairman, I would like to take this opportunity to review the
progress we made during your tenure. Over the last 6 years,
public radio and television have innovated and improved. They
have improved their operations through technology and
programming. First in television, we have developed, adopted
and have now fully implemented, a one-base-grant-per-market
policy, which responds directly to the questions you raised in
1995 about overlap markets.
FUTURE FUNDS
In 18 overlap markets, 44 public television stations that
in the past had received full base grants now share a single
base grant with other stations in the same market whose
broadcast signals overlap significantly. More importantly, the
majority of these stations are now engaged in collaborative
efforts that have reduced redundant operations and freed
valuable resources to better serve their communities. We also
created two new programs, one for television and one for radio:
the Future Funds. They involve initiatives designed to improve
community service, more efficiently raise revenues and reduce
operating overhead. In Illinois, CPB has funded the creation of
a statewide organization that will consolidate stations'
underwriting activities and lower the net cost of donations.
Over the past 5 years, television and radio future fund
projects have either saved or raised $7 for every $1 invested.
A further improvement to our radio and television grant
programs is renewed emphasis on support for rural and minority
stations. Both the television community service grant and the
radio community service grant programs have recently been
rewritten to direct a higher percentage of resources to
stations in greatest need of economic support. Programming has
also been enhanced over the last 6 years. We have expanded our
education services. We are developing new and innovative
worldwide Web applications, expanding new satellite services
and demonstrating the potential of interactivity.
Mr. Chairman, if I can leave you with a single impression,
it is simply this: The 400-plus licensees who receive support
through CPB are no longer just radio and television stations.
They are using all forms of media to provide educational and
informational services to communities across the country.
MINORITY PROGRAMMING
One of CPB's long-standing commitments has been funding
programs for minority and diverse audiences. We are continuing
to provide critical support to the national minority
programming consortia, and we have established a new program
grant for diverse initiatives. In public radio, historically
more than 60 percent of CPB radio program funds have supported
independent or diverse productions. CPB also funds nearly 60
minority-owned stations, a Spanish language satellite service
and a satellite service for Native Americans. As I mentioned
earlier, Mr. Chairman, we are requesting that this subcommittee
provide $20 million to CPB in 2001 to assist in the conversion
to digital technology. With more channel space available, as
many as four more channels per station, public broadcasters
will be well positioned to offer educational services for all
audiences ranging from preschoolers to senior citizens all at
the same time.
DIGITAL CONVERSION
As of February of this year, 27 states had already
committed nearly $211 million for their local stations digital
conversion efforts. The total funds raised by State and local
governments and from private sources for the digital conversion
so far exceeds $300 million. With your continued support and
the critical support of State legislatures, local viewers and
listeners, public broadcasting will be able to meet the FCC
mandate to convert to digital broadcasting. And in a world of
mergers and consolidations where media content may be
controlled by a handful of telecommunications conglomerates, we
believe that public television and radio will continue to meet
the public's interest in locally operated, publicly owned,
noncommercial educational and informational programming
sources.
CONCLUSION
So in conclusion, I would like to say we thank the
committee and this Congress for providing funding for digital
broadcasting in the last two appropriations cycles, and on
behalf of public broadcasting, I would like to thank you and
the subcommittee for your leadership and support over the
years.
[The information follows:]
RADIO AND TELEVISION LICENSEES
Mr. Porter. Thank you, Mr. Coonrod. Of your 400 licensees,
how many fall in radio and how many in TV?
Mr. Coonrod. There are 176 TV licensees and the others are
radio.
Mr. Porter. 400 and----
Mr. Coonrod. There are 350 roughly.
Mr. Porter. 350 radio and 176 TV?
Mr. Coonrod. That's correct.
FCC DIGITAL CONVERSION
Mr. Porter. Is the mandate of the FCC in the same time
frame for radio and TV?
Mr. Coonrod. It is not. The mandate from the FCC for
television is specific. The conversion is to be completed by
2003. In radio there is as yet no mandate. There are a couple
of digital conversion plans under consideration and the FCC has
not reached a decision on which one it will choose.
CPB FISCAL YEAR 2000 BUDGET
Mr. Porter. How much is your budget this year? How much are
you spending this year?
Mr. Coonrod. For fiscal year 2000 we have $300 million.
Mr. Porter. How much of that is granted to radio and how
much to television?
Mr. Coonrod. By formula, 25 percent goes to radio and 75
percent goes to television.
Mr. Porter. So 75, and 25 to television. But you have costs
and programming and the like, you just allocate it that way?
Mr. Coonrod. No. By law, we allocate up to 5 percent for
administrative purposes. 6 percent is for essentially supplied
services, and the rest is allocated 75/25 to television and
radio stations and producers.
RADIO DIGITAL CONVERSION
Mr. Porter. Now, how many of the large radio stations,
commercial stations, have already converted to digital, any?
Mr. Coonrod. For large commercial radio stations, none is
broadcasting in digital. It is fairly common to have digital
studio equipment but nobody is actually broadcasting in
digital.
Mr. Porter. Since probably most people listen to the radio
in their cars, there are no cars equipped yet with digital
receivers, are there?
Mr. Coonrod. Not in this country. That's right.
Mr. Porter. So radio conversion is a little way off. TV,
there is some conversions having been accomplished to digital
equipment. Is there anybody broadcasting digitally?
TELEVISION DIGITAL CONVERSION
Mr. Coonrod. There are 14 public television stations that
are broadcasting digitally at low power, and a number of
commercial stations.
Mr. Porter. To whom do they broadcast? Is anyone buying
digital TVs or conversion equipment in any way?
Mr. Coonrod. Right now there are a limited number of
televisions. You can buy a digital television. The market is
very small for digital televisions. There is in production, and
soon to be marketed by the end of the year, a converter box
that will allow you to receive digital television on your
analog television sets. So for something less than $200, you
will receive a digital signal. You will get a slightly enhanced
picture from what you get now. If it is a multi-cast situation,
you will be able to multiplex. The other thing, Mr. Chairman,
there is a card which you can put into your PC, your home
computer which also allows you to receive digital television.
One of the early sort of ways in which we think digital will
roll out will be to the computer for educational purposes.
Mr. Porter. Tell me the advantage to the consumer of
digital broadcasts? It is a higher resolution picture and what
else?
Mr. Coonrod. It is a significantly higher resolution
picture. Even a standard definition television picture is far
superior to the regular National Television Systems Committee
(NTSC) picture. A high definition picture is even better.
In addition, it allows the broadcasters to multiplex the
signal so where you now have one signal or one channel, you
could have at least four channels. It is very easy to--in
digital, to send opportunistic data along with the video so you
can enhance the program. By enhancing the program, we would
describe it as providing additional information that you can
receive on your television set. All digital television sets and
set top boxes will have the capability to receive this
additional data. For example, it can be more information about
the subject on the program that is being broadcast.
RADIO DIGITAL BROADCAST
Mr. Porter. What about radio, what is the advantage to the
consumer of a digital broadcast in radio?
Mr. Coonrod. Since there is no standard established yet, we
can only say with certainty that radio will have CD quality
sound. If the system that is now being favored is adopted,
which is the in-band, on-channel system, if that is adopted by
the FCC, the ancillary benefits will be minimal. There will be
some ability to send some data, but primarily it will be an
improvement in sound. The flip side of that is that it will be
forward-and-backward compatible, which means that you will be
able to receive a digital radio signal on your analog radio so
you won't have to buy a new set. And it will be on the same
frequency that it is currently on. So if that is the approach
that is taken by the FCC, the in-band, on-channel, it will be a
more robust signal, much better sound and real convenience to
the consumer.
DIGITAL CONVERSION FUNDING
Mr. Porter. Now, going to the bottom line, and you and I
have discussed this, if you look at a station like WETA in
Washington, or WTTW in Chicago, these broadcasters, telecasters
are doing very well and probably have the resources even
without any help from anyone to convert to digital. They can
raise the money. Is that a fair assumption in most cases? And
that the ones that really need the help are the smaller rural
stations or the ones that are in connection with some small
college or something like that?
Mr. Coonrod. It is certainly the case that the smaller
stations, those below a certain revenue level, need the help
more. The cost of digital conversion is not contingent on the
size. A tower is a tower, a transmitter is a transmitter. So as
a percentage of their revenue, it is a much larger percentage
for the smaller stations.
Mr. Porter. You don't have an authorization for this yet,
so you don't know necessarily how it will be directed to be
distributed, but it is possible that Congress would say in the
authorization it is going to go to the smaller stations and not
very much to the bigger stations or very little. Is that true?
Mr. Coonrod. That's possible, sure.
Mr. Porter. This is my final question. If you have a small
station that can't afford this conversion easily, and they are
going to have four channels where they had one, aren't these
channels worth something in terms of future revenues by which
they might pay back the costs of the digital conversion? In
other words, if the authorizers said let's have a loan program
and you pay us back from a period of years from the additional
revenues from having additional channels, wouldn't that be a
workable way of getting Congress to authorize?
See, I am worried about the authorization. I can provide
you funds, but I can't do it without an authorization, and I am
trying to get a way where the authorizers can see the net cost
is maybe very low or even nothing.
Mr. Coonrod. Mr. Chairman, we have analyzed that set of
circumstances. There are a couple of issues that it raises,
which make me wonder whether it could work. One of the issues
is that we don't yet know what the revenue generating potential
of the additional spectrum would be. In other words, it is a
hypothetical value. So we can't monetize it. That is one thing.
The other thing is that it is not clear yet what the FCC
ruling on the supplementary and ancillary uses of the spectrum
will be, so we would be operating on the assumption of the
existence of additional revenue opportunities before the FCC
were to rule on that.
And the third area that has caused us some concern as we
looked at it, as we have projected the gap between revenues and
expenses going out to the year 2004 and beyond, we look at
roughly a $180 million gap between revenues and expenses. If we
were to have a loan program, it would increase that gap so that
even if it were an interest-free loan, there would still be an
additional expense that stations would have to bear so that the
gap between revenue and expenses would wideneven further. And,
therefore, it looks to us if it is possible to use that spectrum for
revenue-generating purposes, that it would be better to look at using
that to offset operating costs rather than capital costs.
DIGITAL CONVERSION AUTHORIZATION
Mr. Porter. Can you tell us where you are in terms of an
authorization for digital conversion, where you think you are?
Mr. Coonrod. We are eternally optimistic, Mr. Chairman.
There was a bipartisan bill that was introduced in the House.
We haven't had any formal action on it yet; but we are also
working with the authorizers in the Senate to see if we can get
something started in the Senate. Perhaps simply an
authorization for the digital portion of the funding.
Mr. Porter. The only thing that could happen to a station
if they didn't convert, according to the FCC mandate, is that
they could lose their license, correct?
Mr. Coonrod. That's correct.
Mr. Porter. There is no other sanction there? You know, I
am looking at 2003, and I am looking at the market and I don't
see a lot happening at this point. It could happen very fast, I
recognize that. But there is a lot of thought out there that
2003 may be adjusted given the market realities.
Mr. Coonrod. There has been considerable talk about that,
Mr. Chairman. But the FCC, at this point, has given no
indication that it is considering changing the deadline, and
there has been no formal action taken by Congress to do that.
So right now we are working under a hard-and-fast deadline.
Mr. Porter. Except the authorizers aren't.
Ms. Lowey.
ANNENBERG/CPB CHANNEL
Mrs. Lowey. Thank you very much, Mr. Chairman. Welcome Mr.
Coonrod. I haven't had a chance to speak with you again and
congratulate you all on your work. As I am reading through your
testimony, I see all of the educational work that you do. The
work with the Annenberg Foundation is very exciting, and with
all of the focus today on instruction for teachers, for other
people in the education profession, it seems to me that you are
certainly leading the way, and I would appreciate if you could
give us more detail about the Annenberg CPB channel teaching
program. You indicate in your testimony that the program is
growing very rapidly. I would be interested in knowing how you
get your teachers involved, how are schools reacting to this
training. Are they working with you?
Mr. Coonrod. Yes, I would be happy to give you more
information. I can provide, for the record, a full accounting
of the work of the channel.
[The information follows:]
Mr. Coonrod. Let me start by saying that one of the reasons
that the Annenberg Foundation chose to partner with Public
Broadcasting was because of Public Broadcasting's history of
providing education services to communities around the country.
The channel starts from a basic premise that the biggest
education challenge that the Nation faces is training teachers.
And we started off 2 years ago with a math science channel that
PBS distributed 6 hours a day, 4 days a week and the response
was so positive CPB, PBS, and the Annenberg Foundation, thought
that it made a lot of sense to expand it to a full-time service
so that the teachers would have access to it not just during
classroom hours or school, but also have access to it at home
and that it would cover the range of disciplines, not just math
and science.
The channel has essentially two parts. One focuses on the
pedagogy, what you need to do to become a good teacher; these
are basically workshops, and there is a companion Web site,
learner.org, where the teachers can engage in dialogue among
themselves after they view the workshop on television. The
second part of the channel is content. What are the things that
a math teacher needs to know to teach math or a history teacher
so both of those elements are part of the basic channel
service.
It is expanding quickly. About a thousand schools a week
are licensing it. The license is free. It comes at no cost.
That was a prerequisite from Walter Annenberg--that it be a
free service. But about a thousand schools a week are licensing
it. A number of public television stations already transmit it
even before digital. We see it as a digital multicast service,
but before digital has come on the scene, a number of public
television stations are broadcasting it, some do it on local
PEG channels or local ITFS services, which are their
exclusively educational services. It is easily downlinkable by
school systems. It is being promoted primarily through the
educational organizations, the teacher organizations which are
partners in developing the content. So we see this as a
partnership with the education community.
And it is a kind of a service that speaks directly to a
national need, has national distribution because of the ability
of public television to distribute it nationally, but it can
also be tailored to meet the local needs, so if standards are
different in one State than another, it can be locally tailored
to take account of those different standards.
Mrs. Lowey. You mention it grows at a rate of 1,000
schools, 500 new homes per month. Is it directed at elementary
school, high school, a combination of all?
Mr. Coonrod. It is K through 12. While we say it is K-12,
so far the focus has been sort of 4th grade to 9th grade,
although, as we build it out, it will be a full K-12 service.
Mrs. Lowey. Is it providing lesson plans and methodology?
Mr. Coonrod. There are no lesson plans as part of the basic
channel. However, either through the learner.org service or
companion services, lesson plans are available to the teachers.
For example, a number of stations are digitizing their
instructional television material and they are linking them to
the local standards, so you can go to, for example, KCPT in
Kansas City, through their Web site, you can get video
materials. So a teacher has available in addition to the kind
of pedagogical information available through the Annenberg
channel, material that the teacher can use in the classroom.
Now, our challenge is to fuse these things in a way that
they become seamless to educators. Right now there are a series
of complementary initiatives. But what we need to do is put
them together in a way that a teacher goes to one source and
can key into the array of services that are available. That is
the next phase in this operation.
PBS ADULT LEARNING SERVICE
Mrs. Lowey. Clearly I know that I am particularly
interested in this, and look forward to continuing the
dialogue. I also want to ask you to discuss further the adult
learning service which you said was available in 41 states. Do
the PBS affiliates wait for the schools, universities, and
colleges to approach them about this program or do you reach
out? Is the Nebraska model being adopted by other states? Could
you tell us more about this?
Mr. Coonrod. It is, to use the phrase, it is a proactive
effort. The stations reach out and use this as a way of
signaling their value in their communities and as a way of
providing an additional community service. The Nebraska model I
wouldn't say is--I would say it is a model in the sense that it
has all of the elements that we look for in a service, and it
is one, therefore, that we highlighted in the testimony. Others
are looking to emulate the Nebraska model, but there are others
out there that are--I want to say just as good. By that I mean
given the places where they are working, they work as
effectively as the Nebraska model. One of the great things
about public television is that the local stations are able to
provide services that make sense in their communities. A rural
State has kind of a whole different set of requirements than a
State that has both urban areas and rural areas. So while the
Nebraska model is an excellent one, it isn't always appropriate
for some states.
Mrs. Lowey. Thank you. I heard the bell and I look forward
to continuing our discussions about this, particularly the
Annenberg CPB partnership.
Mr. Coonrod. We are pleased that it is a continuing
partnership. It has been going for about 10 years, but we have
entered into a new phase, and we look forward to a long-term
relationship with the foundation.
Mrs. Lowey. Thank you.
Mr. Porter. Mr. Wicker.
DIGITAL CONVERSION
Mr. Wicker. Thank you, Mr. Chairman. Mr. Coonrod, we are
delighted to have you here with us today. Let me follow-up on a
couple of questions that the chairman asked about digital
conversion. I noticed that one of our stations in Mississippi
is one of the first to convert.
Mr. Coonrod. Jackson.
Mr. Wicker. Do I understand you to say that there is a FCC
mandate that you move very quickly but not necessarily a
congressional mandate? Is that the gist of your conversation
between the chairman?
Mr. Coonrod. That is the gist of the conversation. The FCC
has set the time line for digital conversion.
Mr. Wicker. And do I understand also that converting
rapidly to digital radio gets us almost nowhere at this point
because there is hardly anybody who--that can receive a digital
signal?
Mr. Coonrod. Well, there is no standard. No standard has
been adopted in radio yet. So it would be premature to convert
to digital radio until the standard has been adopted.
Mr. Wicker. So the $20 million that you are requesting in
2001, is that all for television?
Mr. Coonrod. As part of the total package of $450 million
of which $95 million would come through the Corporation for
Public Broadcasting and the remainder would come through the
Public Telecommunications Facilities Program. Of the total $450
million, $60 million is for radio and $390 million is for
television.
Mr. Wicker. So this just gets us started?
Mr. Coonrod. Our sense is that it is about 25 percent of
the total conversion cost.
Mr. Wicker. Just looking down the road, when do you think
total--according to your plans, when do you think total
conversion can be accomplished or will be accomplished?
Mr. Coonrod. In order for a station----
Mr. Wicker. If you had your druthers.
Mr. Coonrod. In order for stations to maintain their
broadcast licenses, they must convert to digital, and by that,
I mean provide a pass through capability by 2003. We are going
to work to help stations do that one way or another.
As I mentioned earlier, 27 states have already committed
funding for this, and there are local capital campaigns, local
fund-raising efforts.
I guess I would say, in response to your question, is if
the 2003 mandate were not there we would be following a
different timetable but we would still be working vigorously to
make the conversion to digital because of the potential that
digital offers for enhancing service going forward. So the
particular road that we are on is one that was determined by
the FCC requirement, but, in fact, it is a road that we would
like to travel in any case.
Mr. Wicker. Well, it just seems to me that the chairman,
this may be $20 million we could save this year if Congress--if
the jurisdictional authorizing committees are not ready to
move, perhaps we could work with the FCC and decide that this
is money that we could save and spend at a later time. What
would you say to that? There is really not that much impact out
there for the consumer for early conversion?
Mr. Coonrod. I guess there are two parts to the answer. In
terms of the consumer acceptance and consumer use of digital,
the sooner the consumers have an opportunity to experience
digital television, the more quickly the actual conversion will
take place. Therefore, the more quickly the costs will come
down because as we know, the more sets that a manufacturer
produces, the lower the unit cost. So there is that question
from a consumer side. From the planning side, it is important
to consider what it takes to make the digital conversion.
And there is a time line that needs to be taken into
consideration. There are a limited number of broadcastengineers
who can construct broadcast towers, and you have to get in the queue in
order to get your tower or you have to order a transmitter. With all of
the stations making the conversion in a relatively short period of
time, they have to get their orders in and get at the head of queue. So
the sooner we get the funding, the better position we are in getting
the orders in. I would add one of the things that we are better able to
do, too, is aggregate the orders which would provide for group
purchases, and therefore have some reduction in cost overall.
PUBLIC TELEVISION VIEWERSHIP
Mr. Wicker. Thank you very much. Mr. President, what is
your overall market share, your Nielsen share for people who
watch public television?
Mr. Coonrod. The way to sort of make a general statement
about that is the average is about a 2 share.
Mr. Wicker. That is 2 percent?
Mr. Coonrod. That's correct.
Mr. Wicker. Of your viewers that are watching at any given
time, how many are watching on cable and how many of them are
watching over the air?
Mr. Coonrod. It is hard to generalize because cable
penetration rates vary from location to location, from city to
city. One of the things we can say as a general statement, the
viewership of households that regularly watch public television
tend to have a lower rate of cable penetration than households
that do not regularly watch public television, but that is a
gross generalization because it really works out market by
market. In some markets the cable penetration is over 70
percent, and in some it is below 60 percent.
[The information follows:]
According to Nielsen statistics from December 1999, for all
households, 70% of the national sample have cable and 99%
receive PBS. Specifically, in households with less than $20,000
income, cable penetration was only 59% versus PBS's 97%. In
rural areas, 55% had cable but 95% received PBS. Among
unskilled-worker households, 65% had cable while 98% received
PBS. Finally, among minority households, 62% of Hispanic origin
homes and 65% of African American households had cable,
compared with PBS penetration of 98% and 99%, respectively.
Mr. Wicker. Well, I wish that you could, for the record, be
more specific if you could find that information, because you
may have been here in 1995 when we had very serious testimony
about doing away with public television entirely, and one of
the arguments that were being made on behalf of public
television, this is something that a lot of people watch that
don't have any other stations to watch. They are watching their
public television stations. I will like to know where we are on
that.
Mr. Coonrod. There has been a dramatic erosion in
viewership of commercial television. The erosion in viewership
of public television has been very small. While all of the
competition has come out there from cable and from other
sources, public television has held its own in that competitive
environment, whereas commercial viewership has diminished by
over 60 percent.
Mr. Wicker. Commercial over-the-air viewership?
Mr. Coonrod. Whether over the air or on cable. So if you
look at it in terms of viewer loyalty, the public television
viewer is extremely loyal.
Mr. Wicker. Please follow-up on the record. Thank you.
Mr. Porter. Thank you, Mr. Wicker. Ms. Pelosi.
Ms. Pelosi. Thank you, Mr. Chairman.
President Coonrod, congratulations to you on your excellent
work and on the wonderful Corporation for Public Broadcasting
that you are here justifying the budget for today. CPB has many
fans in the Congress and in the country and nothing
demonstrated that more clearly than when the Corporation for
Public Broadcasting came under siege a number of years ago and
the people of our country rose up to demonstrate their support.
Over the years I have had questions recognizing the excellence
of what you do, but some questions about funding for
multicultural programming and audience building for minority
productions, and of course, the questions about digital have
been important to all of us. Especially in light of the plan to
retrain and develop minority producers. That will be the focus
of my questions.
LOW POWER RADIO
But first I wanted to ask you, because it was in the news
yesterday about the FCC moving forward on issuing low power FM
licenses in radio, and I thought we could have the benefit of
your wisdom on that subject. The article in the New York City
Times indicates that National Public Radio (NPR) may be opposed
to this, and knowing that you share the value of more
participation and outreach, et cetera, I wonder if you can
elaborate on that.
Mr. Coonrod. We are on the horns of a dilemma when it comes
to the low power FM question. Certainly, the goals that are
represented in the low power FM decision that the FCC made are
ones that we share. We see it potentially as very complementary
to the work that we are doing in public radio and the work that
we have done to expand the reach of public radio.
However, there are some technical issues that need to be
resolved. And in the absence of that resolution, we continue to
have reservations about it. To give you one example, about a
million people a day listen to the radio reading service which
is carried on a subcarrier by public radio stations. These are
people who are visually impaired. We would really want to have
assurances that those kinds of services would not receive
interference from a new station that was licensed under the low
power FM regime.
With those kinds of assurances, I think we could embrace
the notion of low power FM, but there are some questions that
need to be worked through in a regulatory way before we can be
enthusiastic about it.
Ms. Pelosi. So this is a mechanical technological question
that you have, other than that you accept it?
Mr. Coonrod. Yes. It is a question of interference. For
example, another kind of issue, in rural areas, most of the
coverage is through translators, and there is nothingin the FCC
order which protects those translators, so that means that at least
potentially, the reach of a public radio station in Wyoming, for
example, where public radio is very important, the reach of that public
radio station could be adversely affected by a new low power station
which would have a smaller coverage area. A low power station may have
a coverage area of only 2 or 3 miles, whereas it would interfere with a
translator which would be covering hundreds of miles. Those are the
kinds of equities that need to be balanced as we go forward.
Ms. Pelosi. I appreciate your elaboration on that. The
broadcasters are very much opposed to this. I hope for the same
reasons, a question of interference and not about competition
or for these audiences. So I am just hoping that that is the
case. As comfort to them, you have these questions as well, and
of course your name will be used in this discussion. I am a big
believer in science and technology overcoming the difficulties
that are there.
Mr. Coonrod. It is our sense that these are issues that can
be surmounted if all of the parties can talk about them in the
right spirit. But speaking on behalf of an organization that
represents broadcasters, I will say that interference is a real
issue and by eliminating the third adjacency for broadcasts in
the FM band, you do raise questions that ought to be resolved
before going forward, or at least have a regime in place to
deal with them effectively if they do come up.
INDEPENDENT TELEVISION SERVICE
Ms. Pelosi. Please talk for a moment about the independent
producers. A few of us sent you a letter which I have here for
the record, and last year you educated this committee and the
authorizing committee about the Independent Television
Service's (ITVS) significant contribution to diverse
programming for public television, and you said PBS merited
funding increases. While funding increased slightly in fiscal
year 2000, it is far below the 1995 peak level. Please tell us
what the status is of ongoing talks with ITVS to establish
higher baseline funding which some members of Congress consider
justified?
Mr. Coonrod. We have established a higher baseline funding
for the administrative expenses. We have increased those by
about 10 percent. Where we are working now is on the
programming side, and what we have done is we have put aside
$3.8 million in a special fund earmarked for diverse
programming. As you know, in addition to the ITVS, we also
support the work of the five national minority consortia--and
we have also provided additional administrative support for the
five consortia.
It is our view that maintaining new programming money in a
central pot and dispensing it in a competitive way is the best
way to assure that it will go for excellent projects that have
a high probability of being broadcast on public television. In
any given year, one organization may have a better project than
another. We recognize there is not enough money to go around.
But that in this environment, it is important to encourage
competition.
And so we are setting the money aside for diverse
programming, we would expect that the ITVS and the minority
consortia would compete effectively for it. We believe it is
better to do it that way than to simply increase the baseline
funding available for each organization because the amount that
would be possible, given the important constituents that we
serve, would not aggregate to the level that we think would be
significant. So that is part of what we are doing.
PRODUCERS ACADEMY
We are also in cooperation with PBS working on something
called the Producers Academy, which would be an opportunity for
established producers to provide internships or assistantships
for younger producers from the minority and ethnic communities
as a way of developing their expertise and their ability to
actually be competitive in programming. That complements the
work that we are doing with what we call the digital road
shows, which are a series of meetings that we have around the
country where we invite producers in to learn about the new
technology, to exchange ideas with producers who have
successfully developed projects around digital.
So the combination of the digital road shows and the
Producers Academy we believe is going to provide real
opportunities as we move into the digital realm.
The other thing I would say finally is that in the regular
general program fund that CPB has available, a significant
portion of that fund is awarded on a competitive basis for
diverse programming. About 35 percent of all of our program
dollars goes in these areas.
Ms. Pelosi. I appreciate that, President Coonrod. My time
has expired, but since my next question was about the minority
consortia----
Mr. Hoyer. I yield.
Ms. Pelosi. Thank you, but he already answered that.
Mr. Porter. Thank you, Ms. Pelosi.
Mr. Hoyer.
Mr. Hoyer. Thank you. I apologize for not hearing your full
testimony. I have been across the hall where they have a
hearing going on there as well.
DIGITAL DIVIDE
I just have one question, and you may have spoken to it.
Obviously the digital divide is of great concern to everybody.
We are all focused on trying to make hardware available to
everybody so they can participate in the electronic age in
which we are now living.
I wanted to ask you--not only do we want to make hardware,
but content to speak to everybody as well. When you broadcast
in digital, what kind of content will you be providing that
speaks to a broad audience?
Mr. Coonrod. I think that public broadcasting can make a
real contribution to bridging that digital divide. Part of it
is the hardware which would provide the opportunities, but it
is really more about the content.
One of the things that public television stations have been
constrained by is the technology. So I would focus on two
areas. One in the educational realm, making sure that the kinds
of programs that help people use technology better are
available at the same time as those kinds of programs that
public television is already noted for.
The Ready-To-Learn Service. We know that the Ready-To-Learn
Service does have a demonstrable effect in helping kids get
ready for school. At the same time, during that same time
period in a digital environment, we could be providing remedial
instruction for people who wanted to have a better feel for how
to use technology. There are a couple of projects underway now
that are aimed primarily at teachers because they are Web-
based. But in a digital environment where you can use a
broadcast-based service which would be free of charge and
universally available, those same programsor those same
techniques could be made available to the general public.
So we have those same kinds of educational applications.
Public television is the best source of diverse programming.
And part of what we look at when we look at the digital divide
is the kind of cultural divide that we also see. It isn't just
around the technology. But as we understand ourselves better as
a Nation and if we can tell good stories that all of us can
relate to, we bridge that divide in additional ways, and public
television is very good at doing that.
One of the things that the research shows, is that one
reason that members of certain minority groups do not use
technology is because they don't think that there is anything
in the technology that is relevant to their experience and
interest. That is where public television can play an important
role.
Mr. Hoyer. I think clearly in an environment in which we
are living, this is going to play an extraordinarily powerful
role in the creation of our future community. And the kind of
community we have and the kind of relationships that we have in
the community and the kind of democracy we have in many
respects.
Mr. Coonrod. One of the things that we look a lot at is the
changing demographics. As you move down the generational
ladder, the ethnic and cultural diversity of the population
changes dramatically, so that the younger audiences, which are
audiences that are important to address, are more ethnically
and culturally diverse. So the programming has to be relevant
to their experience. And that is why I think we see this as one
of those exciting opportunities. It is one I think we will play
an important role in contributing to bridging that divide.
Mr. Hoyer. I agree with you. Not only do we need to find
ways to communicate that are relevant, but we need to find ways
to communicate and educate and unify, if you will. I don't mean
homogenize, but I mean unify. That is one of our challenges. As
our country becomes more diverse, we want to maintain the unity
that has made us strong, and this is one way that is going to
be accomplished. Television has been, in many respects, the
most powerful communication device yet known, and it has
unifying aspects to it of a very substantial proportion, and I
think this will follow onto that.
Mr. Coonrod. I certainly hope so.
One of the sort of principles that we are trying to use
when developing our initiatives is to look at programming that
is by or about members of ethnic minorities, and is programming
for all Americans so that they can help build those bridges and
provide the unity that you are talking about.
Mr. Hoyer. Thank you. When you say in your statement that
this is the last time testifying before you, the ``you'' refers
to Mr. Porter, you expect to be back, but you don't expect Mr.
Porter to be back, is that how I interpret that?
Mr. Coonrod. He said something publicly. I am just reacting
to what he said publicly.
Mr. Hoyer. That is a very artful answer.
Mr. Coonrod. I expect to be back.
Mr. Hoyer. Thank you, Mr. Chairman.
DIGITAL CONVERSION
Mr. Porter. Going back to digital conversion, when you say
that--on TV, you will be able to go from one channel now to
four in the same amount of spectrum, how exactly would a
station use the additional channels? In other words, would you
have to have two receivers, one receiving the primary message
and the other being their data? How exactly--would the screen
be split? What would the additional channel work like together
with the primary channel?
Mr. Coonrod. The answer to all of that is yes. Maybe if I
can just break it down, one would be a multicast situation
where what you get, in effect, was a menu and you would choose
from channel A, B, C or D, and it would be a regular television
program, but it would be a better quality signal but it would
be a regular television program.
Mr. Porter. But you would have four choices instead of one?
Mr. Coonrod. During the day you could have a Ready-To-Learn
Service for preschoolers, you could have instructional
television, something ready to be used in the classroom, you
could have the how-to programs, and what we are seeing
increasingly for some audiences is to run the prime time
schedule during the day so people who can't watch it at night
can watch it during the day, especially for senior citizens. So
you have those four services and you would pick the one that
you wished to use. That is one approach.
Another approach and one that we think has a lot of
potential and have done a lot of experiment with is enhanced
television. Along with the program that you were getting,
additional data would be sent up opportunistically would be
sent down and received on your set top box or by your
television set so that you could further pursue some aspect of
the show, and there would be a little icon that would show up
on the screen that would say for more information click here.
So you would, in effect, suspend the program, you would stop
watching the program, you would get this additional data which
may be biographical information about one of the characters.
Mr. Porter. How would you get that data?
Mr. Coonrod. On the screen.
Mr. Porter. So you would lose the one picture and have
another one?
Mr. Coonrod. There are two possibilities. One you could do
a picture within a picture. The other is if you wanted to use
full screen, you could freeze the television program and then
go back and watch it linearly later on. Both of those things
would be possible. Which kind of technology will actually role
out is a little bit speculative at this point. There are
already boxes that are for sale which provide some version of
that service for National Television Systems Committee (NTSC)
signals.
Mr. Porter. Going to the cost, the total conversion cost is
$450 million, as I understand it?
Mr. Coonrod. The total conversion would be about $1.8
billion.
Mr. Porter. The Federal portion is $450 million?
Mr. Coonrod. Yes.
Mr. Porter. How much of that is equipment conversion and
how much is program production and development?
Mr. Coonrod. The way that we have broken this out is that
there are essentially three ingredients. One is hardware for
local transmission. The other is providing of local service and
the other is national distribution.
The amounts of money that would be appropriated to the
Public Telecommunications Facilities Program (PTFP) would be
used primarily for the hardware for the transmitter, the studio
totransmitter links and the master control, those things that
would be necessary to get a signal out to the public. The money that
would come through this committee, the----
Mr. Porter. How much of that is PTFP money then?
Mr. Coonrod. That is what the PTFP money would go for.
Mr. Porter. How much of that 450?
Mr. Coonrod. 450 minus 95.
Mr. Porter. So 355. The 95----
Mr. Coonrod. The 95 would be used for local service and to
make sure that there is the national distribution, that there
is a digital national distribution system in place so that
digital programming could actually be provided to the stations.
Mr. Porter. The production and development of programming
would be most of the 95?
Mr. Coonrod. I guess the answer to that would be it
depends. If we could get all of the money--if it were
predictable when we would get the money, the time frame when we
would get the money, it would be easier to answer that
question. But because this is the third year of the request,
and so far we have not gotten any of that money and as we see
things changing, what we are going to have to do is apply
whatever funds we do get to the most urgent needs. For example,
every station is going to have to have an emergency capability.
That is a local service. That is an essential local service.
How far along that will be when this money comes is not clear.
But certainly we would hope to be able to allocate a
significant portion of this money for program production.
Mr. Porter. How much money is spent now this year on
program production and development?
Mr. Coonrod. Nationally?
Mr. Porter. By CPB?
Mr. Coonrod. By CPB about a little over $50 million.
Mr. Porter. The question arises then, why do you need
additional money for digital program development, production
and development when obviously if everybody is converted to
digital, you are not going to do any more analog program
production and development, you are going to use your regular
funds for that?
In other words, is this money for conversion to this type
of programming a one-time thing and why would it be any
different than the money that you are using right now for
production?
Mr. Coonrod. The primary use of the money, the TV
programming dollars available through CPB is to develop new
national programming. The money that we are seeking here would
be for providing local services. So it would be to position
stations to be able to provide local programming and local
services. Now some of that would go toward equipment purchases,
but some of it would also go for establishing the training, the
expertise and the other things so that a station could be in a
position to take advantage of the new technology that will be
available. So we are talking about programming in that sense.
In other words----
Mr. Porter. In other words it is identical to the previous
question where you said there may be a number of different ways
of using this technology, but these stations wouldn't
necessarily know how, and they need to have some kind of a
national program to show them that and--in other words, it
isn't just for the programming, it is for--I'm not sure what
you mean.
Mr. Coonrod. It is for the ability to--to develop the
ability to develop this programming locally. In the absence of
this additional appropriation, a station would not be able to
fully take advantage of the digital technology. All the station
would be able to do is pass through a signal that came from a
central source. So the local nature of public television, which
is such an important part of its reason for being, the local
nature of public television would be compromised.
The quality of the programming that came from a central
source might be excellent quality, but it wouldn't have any of
the local education service, those kinds of services would not
be possible because----
Mr. Porter. They have local educational services now.
Mr. Coonrod. They do now, but because they don't have the
appropriate equipment to provide those services in digital or
they may not have developed the expertise in order to produce
those services in digital. If I can go back to the illustration
of the emergency alert service, right now every station
provides an emergency alert in times of crisis or tornado or
anything else. That is an essential local service.
With the conversion to digital, the station will still have
to be able to provide that service. There is nothing in the
PTFP set up that makes that possible, so the stations have to
find their ability to deliver that local service from the funds
that would be available from CPB, for example.
Mr. Porter. What I would like you to do, for the record,
would you provide in detail how you arrived at the $95 million
figure and exactly what it would get?
[The information follows:]
Federal funding for public broadcasting digital conversion is
intended to cover a portion of the actual cost of conversion. Public
broadcasters estimate the total cost of conversion to be $1.8 billion.
$450 million represents 25% of that total. Within the $450 million,
about 80% is reserved for basic transmission equipment needs to be
administered through the Public Telecommunications and Facilities
Program of the United States Department of Commerce. About 20% of the
total federal contribution is designated to CPB to facilitate, from a
national perspective, program distribution, production and development.
Within the broad categories of digital program distribution,
production and development are needs that far exceed the $95 million
being requested through CPB. CPB, in consultation with stations, is
continually evaluating these needs and planning for the best uses of
digital funding, once funding becomes available for distribution. Over
the course of the three years that we have advocated for these funds,
the basic needs have not changed but circumstances and priorities are
regularly reviewed. In considering the uses of funds for 2002 and 2003,
we recognize that future events may elevate certain needs above others,
leading to adjustments in priorities.
Based on current circumstances, if $20 million for digital funds
were approved and available today for distribution prior to the end of
the fiscal year, our priorities would be to secure needed digital
distribution master control and interconnection facilities at PBS and
fund some basic research and development of new content with
applications across media platforms. Fully building out PBS' digital
program distribution capacity is critical to future digital broadcast
capability. Individual station conversion to digital transmission is of
little value if the main national programming arm of public television
is unable to transmit digital programming. Program development funds
may be used for pilot projects to develop digital technology
applications that meet our public service broadcast needs and extend
the educational benefits of programming to encompass the entire range
of alternative platforms.
To the extend that the initial $20 million would allow, CPB is
prepared to provide a limited amount of financial support to encourage
innovation and efficiencies among stations in the construction of
digital facilities critical to digital program production and
distribution.
An additional priority is to ensure universal service where such
service may be in doubt. In those rare cases in which financial
hardship threatens public television's universal reach, and PTFP funds
cannot address the matter, CPB is prepared to use digital funds
appropriated to us to ensure universal service. This is a critical
program distribution issue, the scope of which may be knowable in part
in 2001, and more fully in 2002 and 2003.
Finally, again considering the use of funds beyond 2001, CPB
recognizes that stations must purchase emergency activation system
(EAS) equipment for their digital transmitters and that funds for these
FCC mandated devices is not provided for through the PTFP program. EAS,
if implemented nationally through the PBS system, would become part of
the interconnection distribution system. Potential benefits to the
system of a centralized EAS include efficiency, cost savings and
uniformity. If additional funds are provided beyond 2001, CPB will work
with all interested parties to address these needs.
Mr. Coonrod. Yes. I would like to do it two ways. One based
on having the money all at once, and another having the money
in sequence, so much per year.
Mr. Porter. You probably can assume so much per year. Mr.
Coonrod, thank you very much. You are doing a fine job. We are
trying to provide funding--I'm sorry, Mr. Wicker.
Mr. Wicker. I wonder if I can ask another couple of
questions.
Mr. Porter. Certainly.
PUBLIC BROADCASTING FUNDING SOURCES
Mr. Wicker. Mr. President, let me ask you, does CPB receive
any funds other than from the Federal Government?
Mr. Coonrod. It does. It receives about $9 million a year
annually from the Annenberg Foundation. But that money is not
allocated according to the congressionally established formula.
Mr. Wicker. So it is those two sources?
Mr. Coonrod. Primarily.
Mr. Wicker. With regard to public broadcasting in general,
what is the funding mix out there?
Mr. Coonrod. The funding mix for public broadcasting, in
this last year, CPB provided about 12 to 13 percent of the
total revenue for public broadcasting. The other sources of
revenue include State and local governments, local membership.
The largest single source of funding is membership, 25 percent,
these are the people who contribute voluntarily. There is
corporate underwriting, and of university sources because a
number of public radio and television stations are licensed to
universities. So there are a variety of funding sources.
Mr. Wicker. If you would supply that breakdown for the
record.
Mr. Coonrod. Sure.
PUBLIC TELEVISION LICENSEES
Mr. Wicker. You mentioned in your testimony and in the
submission to the committee, you mentioned a type of
programming that I would call academic or classroom, whether it
is direct teaching or teaching people how to teach, and then,
of course, as we know, there is the nonacademic type of
broadcasting, and here I am talking about television. Can you
give me a breakdown of how much of our television broadcasting
and public television nationwide is what I call academic or
classroom and how much is other?
[The information follows:]
Airing educational or academic programming is the primary
mission of university licensees, and in many instances, state
licensees. Local authority licensees focus less on educational
programming and more on community service and outreach. A
breakdown of public television licensee by type is provided
below.
One hundred and thirty one public television stations carry
the PBS Adult Learning Service. Through the PBS Adult Learning
Service, public television stations team with local colleges
and universities to air instructional programming. The public
television station in Jackson, Mississippi, WMPN, Channel 29,
broadcasts academic programs from the PBS Adult Learning
Service. The programs distributed by the PBS Adult Learning
Service are frequently the basis for distance education
courses.
Thirty-one public television stations and eight state
networks, including Mississippi ETV's EdNet, carry the
Annenberg/CPB Channel. The Annenberg/CPB Channel provides
professional teacher training courses in math, science, and
other subject areas. The Annenberg/CPB Channel is available,
free of charge, to classrooms and communities across the
country 24 hours per day, 7 days per week. Three types of
programs are available on the Channel: workshops, libraries,
and series. Nearly 45,000 schools and over 25 million homes
have access to the Channel.
The following comprise the 177 licensees in public
television:
Community......................................................... 89
University........................................................ 60
Local Authority................................................... 7
State............................................................. 21
______
Total TV...................................................... 177
Mr. Coonrod. I can supply it for the record. I can give you
a general answer now.
Mr. Wicker. Okay.
Mr. Coonrod. It is actually a very interesting question. I
don't want to take a lot of time here, but public television
grew out of two sources, one was educational television and one
was community television. The educational broadcasters tend to
have, as their primary mission, providing educational services.
So a State network in Arkansas or Alabama or Mississippi,
provides a large amount of educational programming, to use your
phrase, academic programming, as part of its basic service. It
also provides the other kind of educational programming as part
of its general public service. Other stations that grew up in a
different tradition, more of community service do less of the
academic programming and more of the other type. We have
thatbreakdown. We can provide it to you by station or aggregate it.
PROGRAMMING
Mr. Wicker. Both. One final question. My family can be at
home watching public broadcasting in Mississippi and if we miss
Quorum on Mississippi ETV, we have a chance to watch it on a
commercial station three or four days later. How much--and you
may not be able to tell me this, but I hope you can tell me
this on the record, how much of the programming of that sort
that is done by public broadcasting is also duplicated on
commercial stations?
Mr. Coonrod. I can make a general statement.
Mr. Wicker. All right.
Mr. Coonrod. The programming that you see on public
television is available exclusively on public television for
some period of time. Part of what we do and part of what PBS
does when it secures the rights to a show, it secures the
rights for that show for 4 or 6 years.
Once that licensing has expired, those programs can migrate
to commercial television. And in fact, one of the things that
public television has done over the years has been to provide a
source of quality programming for commercial television. But,
with one exception maybe, which is the science guide which was
a joint project between public television and Disney, the
programs that are available on public television are available
on public television exclusively for some period of time,
depending on what the terms of the license were.
What you do see is a lot of programming that was
established as programming that was of interest to a public
television audience is now available in a third run or fourth
run on cable television. That is, for example, A&E does the old
mystery series so you can see those kinds of programs.
Mr. Wicker. But if I am seeing that on public television, I
am not seeing new programming, that is what you are saying?
Mr. Coonrod. That's correct.
Mr. Wicker. Thank you, Mr. Chairman.
Mr. Porter. Is Ken Burns doing anything with CPB or any of
your other stations?
Mr. Coonrod. There is a new series that is currently in
development, and I am not sure when it is scheduled to premier.
It is a multi-part series on jazz. It was part of the trilogy
of Civil War, baseball and jazz.
Mr. Porter. Thank you. The subcommittee will stand briefly
in recess.
[Recess.]
Tuesday, April 4, 2000.
NATIONAL EDUCATION GOALS PANEL
WITNESS
KEN NELSON, EXECUTIVE DIRECTOR
Mr. Porter. Subcommittee will come to order. We continue
our hearings on the budget for 2001 with the National Education
Goals Panel, and we are pleased to welcome, once again, Ken
Nelson, the executive director. It is nice to see you.
Mr. Nelson. Thank you, Mr. Chairman. It is nice to see you
and other members, and as previous people have said, I would
like to echo, we certainly wish you the best in your future
endeavors.
I also would like to introduce, I have my budget officer
here today, John Masaitis and then also accompanying me is the
head of the Wisconsin office here in D.C., because Governor
Tommy Thompson is chair of our panel for this year, and this is
Sky Babb. So they are here as well. I will have some very brief
comments.
Ten years ago in his State of the Union, President George
Bush announced the National Education Goals, which he and the
governors had developed at the Nation's first education summit.
And in those words he said, ``education is one investment that
means more for our future because it means the most for our
children. That is why tonight I am announcing America's
education goals.'' President Bush knew that these goals were
ambitious, but he said ``the Nation will not accept anything
less than excellence in education.''
He and the governors also created the unique bipartisan
body of State and Federal officials called the National
Education Goals Panel, which was authorized by Congress in
1994. This year has been a very productive one for the goals
panel under the 1999 chairmanship of Governor Paul Patton of
Kentucky, and the 2000 chairmanship of Governor Tommy Thompson
of Wisconsin.
I would like to just mention, first of all, the panel
produced its ninth annual goals report. We have gone up the
calendar to the year 1999 with all of the present data
available on national and State progress, and then we also
deliver a more popular version of progress toward the goals for
the general public. The prior one is more of a data volume. All
of this material is on our Web site.
Then we go behind the numbers. As we have gotten older, in
other words, as we have gotten more data, we have gone behind
the numbers to say what is the meaning of this and how can we
derive the benefits of some of this for States, for State and
local policy-makers. So in going behind the numbers, we look at
our data and then we ask how did respective States do so well.
We found that Connecticut did very, very well in reading. Not
only did it have the highest performing, but it was a most
improved, which is a phenomenal thing. So we commissioned a
study to demonstrate how and why they got to such a high level
of achievement in reading, and we made this available for all
policy-makers at State levelprimarily, but local level as well,
with a policy statement in that. We did that 2 years ago for North
Carolina and Texas.
We also go behind the numbers with this edition Promising
Practices. We look at each of our goals and then we analyze
which States have done the best toward those goals in terms of
achievement. Then we go back to those States and ask the States
how they did it. Now, granted, we never say this is solid
research. It is anecdotal, but we call the right people in
those respective States, and we characterize their policies and
practices and then we put it in a publication, make it very
available for people and indicate a contact point in each State
on each of the goals.
In addition, Mr. Chairman, we had this past year a
celebration, as well as a special conference on the 10th
anniversary of the goals. Governor Tommy Thompson, our present
chair, and former Chair Paul Patton wrote this, an Ed Week
commentary on Continuity of Purpose and a Common Vocabulary,
indicating one of the benefits of the goals is that they have
provided that continuity of purpose and common vocabulary for
all people to work around and toward.
We also commissioned a 10th anniversary historical analysis
of how we got to Charlottesville, and it is interesting, the
fellow who wrote this, Manis Vinovskis, is in the audience at
this time, but this is a road to Charlottesville, and we have
done a series of historical studies about the goals and how the
goals panel has been able to report on their progress.
Mr. Chairman, this year our chair, Governor Tommy Thompson,
has a very aggressive agenda entitled ``high achieving schools,
the promise, the practice and the results.'' We will kick off
our year-long examination of innovation in the classroom on
April 13th with a nationwide video teleconference that will
illustrate how States, districts and schools can implement
criteria for quality improvement in education, and, by the way,
we have over 200 downlink sites already indicated on that, and
we are going to Web-cast that simultaneously.
In addition then, we will hold a series of hearings at
Governor Thompson's suggestion in Los Angeles; Burlington,
Vermont; Atlanta and Chicago to identify other successful
strategies to get all students to perform to high standards.
And a follow-up teleconference will share the recommendations
of that panel with the general audience.
Simultaneously, we have formed a Measuring Success Task
Force. This is, for the future, to recommend to the panel how
to best develop, use and report data for education improvement.
That is the core of our being, how do we best report data and
it is becoming more and more a policy-makers' necessity. So we
are providing, we believe, the best data in the country that is
comparable among States, but for future we realize, especially
using electronic means, as you were discussing with the library
people, transmission of data can be done instantaneously so a
parent can immediately know how well their child is doing in
that classroom or a teacher can better use data immediately the
next day, so data doesn't have to be delayed as long as it has
previously been.
We have asked former governor of Maine, John R. McKernan,
to chair this task force, and he was both panel member and a
former chair.
Those, Mr. Chairman, are some of our future endeavors,
presently engaged in, and we are asking then an increase of
$100,000 in our budget. This will primarily focus on our end-
of-the-decade reports. I indicated with this graph that we are
now at the ninth report. We are hoping to deliver the 10th
report next year once we have 2000 data for all of the States
on all of the goals and all of the indicators of the goals,
many of which are not reported in these annual reports. This
will be an end-of-the-decade report. It will be a mega report,
sort of our ultimate report for the decade on multiple
indicators for the goals and broken up for each State on each
data point between 1990 and the year 2000. So our request for
an increase is targeted to that endeavor.
In closing, Mr. Chairman, members, we look forward to
serving you, the Congress, the President, Secretary, governors,
State legislators with this information in a timely manner to
better achieve the national education goals and to also
escalate that progress. Thank you. I look forward to your
questions.
Mr. Porter. Thank you, Mr. Nelson.
[The information follows:]
Mr. Porter. In a certain sense, this setting of outcomes
standards sort of preceded the whole concept of GPRA, where we
do it now throughout the government by the President setting
specific outcome goals or standards for the country and then
our attempting to work toward them. The difficulty is we
haven't met any of them; am I correct?
Mr. Nelson. That is correct. Some States have met some, but
not all States have met all of them.
Mr. Porter. John Kennedy said we had to get to the moon
before the end of the decade and we did it. George Bush said we
had to better educate our children up to standards and we
didn't do it. Give me a kind of bottom line on the goals. You
know, some States are doing better than others I understand,
but overall are we getting closer, are we standing still on the
water? Give me an idea.
Mr. Nelson. Well, unfortunately, Mr. Chair, it is mixed.
But there is progress and, especially, I was looking at that
this morning in our report. We characterize in math and
science, for instance, all grades across the country, not in
all States, but as you compile it totally, the Nation has made
progress, and several States, some 35 States have made
progress. So in that category, in those categories' the
academic achievement is up at least in math and science. We
don't have some data on other academic subjects yet. That is
where the 2000 report will provide more of that.
Mr. Porter. It seems to me that maybe it was a couple of
years ago when we took the Timms test that we weren't doing so
well in math and science. In fact, compared to the rest of the
world, we were doing very poorly; am I correct in that?
Mr. Nelson. You are correct in that we did more poorly in
math and science in comparison to the other countries. It was
not a time to be proud. We believe the goals are going to
create greater energy around that and the fact that we have the
Timms study so we can benchmark to the best in the world, to
see how well we are doing, even if it is bad news, we have got
to report it as bad news. And it is interesting we have seen a
trend in the early 1990s, when the goals panel was first
created, there was a reticence among the governors to share
information and be compared to other States. Now they really
look for it. They want comparable information among States.
They want to be compared because they can leverage change in
their own States vis-a-vis other States, so hopefully in this
country against like a Timms standard.
Mr. Porter. This is a comment rather than a question, but
here we are, perhaps the leading technological Nation in
history, leading in so many different areas from information
technology to biomedical science and the like, and yet our kids
in school aren't doing very well in math and science overall,
though you are probably telling me we are making some progress,
and fortunately we have managed to attract to our country and
this is--I want your comment on it. Fortunately it seems to me
we have managed to attract to our country brilliant people from
all over the world who have come here because this is a place
of freedom and opportunity and have kind of filled in the gaps
for our native population which, in a way, seems in too many
instances not very well prepared in math and science, and also
seems to not want to go into those fields.
You know, it seems to me all the bright kids I know in my
district want to be stockbrokers or in an Internet company
instead of being researchers or scientists or the people that
develop the technologies that make our economy grow, and yet we
have drawn a lot from the rest of the world to fill that gap.
That is not something we want to rely on. We need to emphasize
the technological skills that keep us ahead among our own
people who are born and educated here, and we want to get young
people into these fields as career paths so that we aren't
going to be dependent upon a flow of talent coming from the
rest of the world. Can you comment on that for me? I know it is
kind of off the subject.
Mr. Nelson. Well, Mr. Chairman I certainly agree with you,
instead of a brain drain, I guess we have a brain influx in
this country which has been to our benefit. Partly for the
reasons you have cited. It is a very creative society, it is a
very challenging society, a very entrepreneurial society versus
other societies. I recall when I was State legislator in
Minnesota, we were working on getting more engineering degrees
produced in our State without having to rely upon people coming
from foreign countries. And I think that that continues. I
don't have a quick answer for that. I don't have a decent
answer for that.
I do believe the fact that we have set goal 5 as a separate
math and science goal has said this is of critical importance
for the country. It certainly was in 1990 when the goals were
set and the governors and the business community said we have
to ratchet up our interest and commitment to math and science.
So we also report on not just that achievement, but how many
students are now getting math and science degrees versus prior.
So in our little way, we are attempting to assist that
commitment, but it remains a very serious problem for the
country, I do believe.
Mr. Porter. Has any State met all of the goals?
Mr. Nelson. No, no, Mr. Chairman.
Mr. Porter. How many of the goals have been met by the top
State and what State is that?
Mr. Nelson. Well, 2 years ago we highlighted North Carolina
and Texas for being on the top in terms of most indicators,
there are 34 State indicators and they had achieved at top
rank, about 10 of them respectively. So we highlighted that.
Now you can look at respective States. Now Connecticut
obviously did very well in reading. More States are achieving,
the most measurable goal, of course, is ninety percent
completion rate for high school graduation or its equivalent,
and I think about 30 States are there now, maybe it is more
than 20, I would have to double-check, but we moved in the
right direction on that because I think this last decade even
the young people are seeing the worthiness of education and the
importance of it, so they are committed more to it themselves,
staying in school longer, realizing that high school degree
doesn't get you very far in our society.
We try to emphasize the respective States achievement
toward the goals as much as the Nation's achievement, because
we believe that is where the action is in the respective States
and in this particular periodical, or in this annual report, we
do highlight greatest improvement over time, highest performing
States and most improved. So we subdivide all States by each
indicator to try to positively identify those States who are
doing very well. It would depend on each goal. We would have to
look at each goal and by indicator to see how the respective
States are doing.
Mr. Porter. Thank you Mr. Nelson.
Ms. Pelosi.
Ms. Pelosi. Thank you, Mr. Chairman. Mr. Nelson, welcome.
Thank you for your testimony and for your service and your
interest in the education of America's children. I was
interested in our chairman's line of questioning that we had
these goals: President Kennedy's man on the moon at the end of
the decade, President Bush's Goals 2000 and it was interesting
to me to observe that when President Bush was president and the
governors came up with this bipartisan plan and President Bush
accepted it, everyone was very happy it was bipartisanship, a
common goal and a great deal of enthusiasm for it. It wasn't
really, until the Democrats lost the House, that people started
to criticize the goals, whether it had a different name, Goals
2000 or whatever it was, some of which came directly out of the
recommendations of the bipartisan governors committee and
signed off by President Bush.
In all fairness to him, if his own party--I don't want to
get into a political thing here, it has always been a mystery
to me and maybe you can solve it for me, I guess it was just a
different point of view within the party but how they began to
undermine the goals that were set forth in a bipartisan
fashion, approved of by President Bush wholeheartedly,
supported by him and something we were following the President
on. Can you comment on any lack of enthusiasm andhow that may
have impacted our success, my question?
Mr. Nelson. I will do my best. The Goals 2000 Program,
which was run out of the department, was more heavily
criticized by more conservative people throughout the country,
concern I believe about Federal influence or control. We made
it very clear that we report on progress toward the goals. That
is why we are separate from the department as a bipartisan
agency directly accountable to Congress. So we distinguished
ourselves from the Goals 2000 Program.
Ms. Pelosi. Just so I understand, now I understand the
distinction you are making now, do you think that Goals 2000 as
presented as an initiative by President Clinton is a departure
from the agreement the goals that were established by the
bipartisan committee, bipartisan governors initiative?
Mr. Nelson. That was established in 1994 and the same act
that created the goals panel. Prior to that time.
Ms. Pelosi. I understand, but is there a difference between
Goals 2000, or a major departure between Goals 2000 and the
1994 initiative versus what was signed off on by President Bush
and the bipartisan governors committee.
Mr. Nelson. I think the intention of the Clinton proposal
was to continue it. President Clinton was a lead Democratic
governor present at the Charlottesville summit, and the Goals
2000 Program would allow the States to create those kind of
policies and activities which would be toward goal achievement,
toward the eight national education goals.
Ms. Pelosi. So that would be the logical next step for
toward the implementation of what President Bush approved of
and the governors presented?
Mr. Nelson. I would think so.
Ms. Pelosi. My point, Mr. Chairman, is that one of the
reasons we may not have reached President Bush's call for all
of this improved education in a limited time is that his
mandate was undermined by other thinking on this subject, and I
don't mean to make this a political point.
Mr. Porter. I think you have made it a political point.
Ms. Pelosi. But I just think this----
Mr. Porter. Would the gentlelady yield on this and we can
discuss it without being charged on her time? I think it is
true that when Republicans took control of the House, the Goals
2000 Program was not valued very highly, and I suggest two
reasons for that. One was that the national party felt that
this money was mainly planning money. It didn't go to educate
any kids. It went for organizing at the State level the follow-
on to the goals that were set by the President, by the
Charlottesville conference, and I think mostly the feeling was
that that can be done by the States without Federal money, that
they didn't need any encouragement to do that because they were
already taking this up at a very high level as a priority for
each of the States, and that the money would be far better
spent by giving them money for programmatic use such as Title 1
or IDEA or others.
The second was that it ran right squarely into the
flexibility versus Washington control issue, that was a primary
issue with Republicans at the national level and has been ever
since, and the thrust of our thinking is that it is far better
to allow the States and the local school districts to use
Federal resources in a way that they feel is most appropriate
and most needed rather than to have Washington dictating that
this money has to go for Goals 2000 programmatic planning
rather than for something to educate kids or improve the
classroom.
Ms. Pelosi. I appreciate that, Mr. Chairman, but my
question to Mr. Nelson was, was that Goals 2000 a logical
initiative following the recommendation of the governors? Was
that consistent with what the governors had proposed and what
President Bush had signed off on, the Goals 2000 Program?
Mr. Nelson. Well, it was intended, I believe, to be grant
money for the States to use under the title of Goals 2000, but
I think they had a lot of flexibility in terms of what they
used it for, whether they chose to use it for goal achievement
or not I think was left up to the respective States.
Ms. Pelosi. I see. We are having--I don't know--the way
Republicans attacked the Goals 2000, it appeared that they were
disassociating either they were disassociating themselves with
what President Bush had signed on to himself, or because it was
a Democratic initiative, they were no longer interested in it.
When it was a Republican initiative, they did, and the reason I
mention it is because you mentioned President Bush in a way
that sounded like he didn't reach his goal, and in all fairness
to him, he was gone by then.
But I think it is really important for us if we are going
to reach our goals and we bring governors together and we put
forth a proposal that has bipartisan support by the governors
who have to deliver the service after all and the President of
the United States signs off, that if we, if Goals 2000 is a
departure from that, let us say that, but if it isn't, let us
recognize that we have changed course when we try to measure
success on this in a line springing from what gave birth to
your panel as we go from here with your very distinguished
chairman of the panel, or is that what we call them, chairmen,
each year of the panel?
So I don't know how, I mean, I don't know how--you are
answering for how you measure the success and the rest of that
and thank you for what you do.
Mr. Porter. Will the gentlelady yield just briefly again. I
want to put something in the record and that is because his
representative is here, Governor Thompson of Wisconsin called
me twice, I believe, two different years on this issue saying
that the Goals 2000 money was important, so there is a
difference of opinion within the Republican party about the
importance of this program. And yet I think that the bottom
line on it is that the flexibility and the need for money to go
for direct student services has won out over the idea of a
Federal planning program.
Ms. Pelosi. The point has been made. Thank you Mr. Nelson,
for what you do. Thank you, Mr. Chairman for putting on the
record that Governor Thompson supports Goals 2000. I appreciate
that. Thank you.
Mr. Porter. You have more time if you want to continue.
Ms. Pelosi. Well, I would be interested.
Mr. Porter. I took some of it.
Ms. Pelosi. I was interested in how you translate the
success in Connecticut in the reading program. What do you do
next? You did a study to see why they succeed and how they
succeeded. Then how do you make that available to the other
States? I started thinking about these children reading better,
and I think I missed your point there.
Mr. Nelson. What we did is submit this report Exploring
High and Improved Reading in Connecticut, and we
actuallycommissioned this study. We had somebody who had worked in the
Department of Connecticut who also then teaches at Harvard, Joan
Barron, to do the study for us through a series of interviews, but also
through a series of analyses of the data, and we tried to make our
studies as relevant to policy-makers as possible. So we had her break
out State education policies and practices and local district policies
and practices that were beneficial to the respective players in
Connecticut.
We actually went to Connecticut and released this report
there with a little press conference at a local school in
Hartford, low income school where the students had done very,
very well.
Ms. Pelosi. Do we know why they did well?
Mr. Nelson. Yes. They really focused a lot on teacher
development. They also used data very effectively at the local
level. They get feedback immediately on tests and assessments
how well students are doing, which is then usable by the actual
classroom teacher. They also share that information with the
community so that the community itself is fully informed about
how well the school is doing, that enables the parents to hold
the school more accountable where their students are.
At State level they have also provided resources to the
neediest of districts once they see a how a district is going
or a school building, they target money to that District. Some
of what we saw in North Carolina and Texas as well.
Ms. Pelosi. That's interesting. Are you making that
available to the Department of Education as well?
Mr. Nelson. Absolutely. It is on our Web site and we have
distributed it quite extensively throughout the States. We
consider our primary customers as State policy makers. That is,
governors, State legislators, chief State school officers,
school board members, and business education coalitions. So we
send them all copies of this.
Ms. Pelosi. I hope the Department of Education is getting
it too. Mr. Chairman, do we know who the members of the panel
are from the Congress? There are two from the House and two
from the Senate.
Mr. Nelson. Yes. I could respond. Congressman Goodling and
Congressman Martinez are on it, used to be Congressman Kildee
and now Congressman Martinez, are on the panel from the House.
From the Senate, it is Senator Jeffords and Senator Bingaman.
Ms. Pelosi. Thank you so much for your answer.
Mr. Porter. Thank you, Ms. Pelosi. Number 7 on the National
Education Goals states, ``every school in the United States
will be free of drugs, violence and the unauthorized presence
of firearms and alcohol and will offer a disciplined
environment conducive to learning.'' anecdotally, from reading
the headlines in our newspapers over the last few years, one
would say we are regressing from that goal rather than
progressing. You have data, though, that shows that in much
greater detail rather than anecdotal evidence. What would you
say we are doing in respect to that goal? Have we made progress
or are we definitely regressing?
Mr. Nelson. Mr. Chairman, we have four indicators under
goal 7, and as a whole, we are regressing. This is data from
1991 to 1998, some data is not as recent as 1998, but the trend
is not positive for the use of drugs, the sale of drugs,
victimization of teachers, and disruptions in class by
secondary school students. Those are trends in the negative
direction. There are some status quo trends. Sometimes we don't
have statistically significant variants in our data to report.
The one positive is that 10th grade students are reporting less
victimization, in other words, they were threatened or injured
at school less from 1991 to 1998, so that is a positive, but on
the whole it is a regress.
Mr. Porter. Well, here we are, we are spending a ton of
money on drugs, we are spending a good deal of money on safe
and drug-free schools, we have thrown money at these problems
for a long time and we seem to be going in the wrong direction.
Does your evidence show any reasons for this or you just have a
bottom line on it?
Mr. Nelson. I would have to go into a Promising Practices
document to see what respective States have done well on this
goal, and I could certainly get back to you on that, Mr. Chair.
We highlighted three States, South Dakota, Vermont and Nevada,
for having progressed positively on this. I think we would say
that our society has become more violent, and I guess we all
know that and certainly the Columbines have become more
prominent, and yet there is still pretty solid evidence that
schools are pretty safe places for a number of students to be.
Mr. Porter. Well, it seems to me that this goal seems to be
very important to achieving the other goals. If you don't have
discipline in the classroom, if you have firearms brought into
the school, if you have drugs and your students under the
influence of drugs, if you have violence against your teachers,
I don't know how you can have any learning go on in an
environment like that. So it seems to me a very important one,
and it seems to me we are falling way short of where we ought
to be in respect to it, and I don't know that anybody has
really given us any answers that work. Do you agree with that?
Mr. Nelson. Well, we share your concern, Mr. Chair, and so
does the general public. It is the goal that they are most
concerned about, it is most visible and obviously it is the one
that generates more passion and feeling because of the safety
of our children.
Mr. Porter. How long does the Chairman have as a term, 1
year or 2 years?
Mr. Nelson. One year.
Mr. Porter. One year, so we have had what? How many
different chairmen have we had, seven or eight?
Mr. Nelson. Yes, I think Governor Thompson is our ninth
chair.
Mr. Porter. Ninth chair. I know Governor Thompson takes all
of this very, very seriously, and put it a very high priority
it seems to me, if you are going to work on one thing that
might make a difference. It might be this one among a lot of
very important priorities, and obviously we think that you play
a very valuable role and are doing a fine job there, Mr.
Nelson, and gearing to try to do everything possible to give
you the resources you need to do it even better.
Mr. Nelson. Thank you very much.
Mr. Porter. Thank you very much for appearing. The
subcommittee will stand in recess until 2:00 p.m.
Thursday, March 30, 2000.
CORPORATION FOR NATIONAL SERVICE
WITNESSES
HARRIS WOFFORD, CHIEF EXECUTIVE OFFICER
WENDY ZENKER, CHIEF OPERATING OFFICER
ANTHONY MUSICK, CHIEF FINANCIAL OFFICER
MATT DUNNE, DIRECTOR, AMERICORPS*VISTA
TOM ENDRES, DIRECTOR, NATIONAL SENIOR SERVICE CORPS
Mr. Porter. The Subcommittee will come to order.
We continue our hearings on the fiscal year 2001
appropriations with the Corporation for National Service. And
we're pleased to welcome Senator Harris Wofford, the Chief
Executive Officer. Senator Wofford, we commend you on your
service not only in the legislative branch but now most
recently in the executive branch. You've done a fine job and
there I'm going to miss you.
Please proceed with your statement. Again, my apologies for
having to curtail our hearing today. When the minority requests
that we do not hold hearings during appropriation bill debate
on the Floor, we have to accede to that request. And that
request was made, so we had to close down our hearings for the
last day and a half and squeeze a bit here. So I apologize for
that.
Mr. Wofford. Mr. Chairman, thank you so much. I'd like to
introduce Wendy Zenker, the Corporation's Chief Operating
Officer and Tony Musick, the Chief Financial Officer, our new
Chief Financial Officer. They both helped us make great headway
in improving our operations and financial management.
Also I want to introduce Tom Endres, who you've seen
before, the Director of the National Senior Service Corps, and
Matt Dunne, the new Director of AmeriCorps*VISTA, and the
Director of AmeriCorps as a whole, Deb Jospin, is behind me.
Matt was recently sworn in by VISTA's founder, Sargent Shriver.
Both Matt and Tom bring energy and vision to the helm of these
two essential programs.
Mr. Chairman, let me begin by thanking you and members of
your Subcommittee for strong support of these programs. You've
been steadfast in recognizing the importance of national
service and in providing resources necessary to improve and
expand the Senior Corps and VISTA. So thank you.
I'm here to present the President's budget request for
national service programs in your jurisdiction. The President
calls for increases in both the three senior programs and in
AmeriCorps* VISTA. Let me bring you up to date on important
developments in each of these programs and on progress that's
been made in the last year on improved financial management.
For more than three decades, the three senior programs have
been at the forefront in placing older adults in service to
American communities. This year is the 35th anniversary of
Foster Grandparents. Together, Foster Grandparents, Senior
Companions, and RSVP have placed millions of older Americans in
volunteer opportunities that strengthen communities and change
lives.
The fastest growing segment of our population is the number
of Americans over the age of 55. As they retire from their
working career, they are going to be, they already are, a
tremendous resource to help solve community problems. National
Service is the vehicle to make senior power a vital force in
meeting the needs of America.
Toward that end, the President's budget request supports
the progress of local programs in implementing the Programming
for Impact initiative. The Senior Corps has successfully moved
from how much time and how many senior volunteers do we provide
to what are our senior volunteers getting done in our
communities.
Our Government Performance and Results Act report, to go to
you very shortly, will show that the Senior Corps is meeting
our goals.
For fiscal year 2001, our emphasis is again on
strengthening existing projects. Specifically, our goal is to
ensure that local projects have the technology they need to
support a growing volunteer base. That's why a significant
share of the overall $9.7 million increase requested for the
Senior Corps will be devoted to much-needed technology
improvements.
Another national service program is marking an anniversary
this year. It's VISTA's 35th year in the fight against poverty.
VISTA has provided more than 130,000 Americans the opportunity
to fight poverty in every State. Today VISTA is now almost
6,000 strong, about double its force in 1992.
One of the outstanding strengths of the VISTA program has
been its tradition of cutting edge programs that demonstrate
the value of service in building communities. As Sargent
Shriver said in swearing him in, our new VISTA Director is well
suited to carry this tradition into the 21st century. Matt
Dunne was the youngest assistant majority leader whip in the
country as a member of the Vermont House of Representatives.
He's also been the marketing director of a successful software
company. He has the drive, the commitment, and the
entrepreneurial spirit to help VISTA flourish.
Our requested increase for AmeriCorps*VISTA, which totals
$5.4 million, will bolster three central program initiatives
that keep VISTA on the front lines of anti-poverty efforts
today. AmeriCorps*VISTA has already established itself as a
national leader in the fight to bridge the digital divide. Our
request will strengthen these crucial efforts to close the gap
between the haves and the have nots in technology of the
internet and the information highway.
In recent years, a growing portion of AmeriCorps*VISTA
resources have been focused in helping children read well by
the end of the third grade. Our 2001 request enables a full 40
percent of VISTA resources to be focused on literacy.
AmeriCorps*VISTA has also made it a high priority to assist
those who are moving from welfare to work. For 2001, we will
increase support for job creating activities that provide
credit and capital to low income individuals making this
transition.
Like the Senior Corps, AmeriCorps*VISTA has already made
significant headway in matching its program goals to tangible
outcomes and measurements, something I know you over the years
have been emphasizing yourself. VISTA has met or exceeded our
Results Act goals in key categories. We will continue to
emphasize the importance of strong outcome measures in the
VISTA program.
Since the President asked me to head the Corporation, I've
made it my top internal priority to strengthen our management.
To guide these efforts we crafted and implemented a
comprehensive Action Plan to improve our stewardship of Federal
funds. I can report that we've already completed more than 80
percent of the tasks include in this Action Plan. We now have a
strong and deep management team in place to lead our business
operations.
Since last year, we've added an exceptionally gifted Chief
Financial Officer, Tony Musick. We've also appointed a Deputy
CFO and a new Chief Information Officer. And this team, along
with our outstanding Chief Operating Officer, Wendy Zenker, has
brought vigor, rigor and discipline to the Corporation's
business operations. With their leadership, we've installed and
implemented a new core financial management system that
dramatically improves the Corporation's financial
accountability.
Soon, I'll be able to provide to you the results of the
Corporation's fiscal year 1999 financial statement audit. The
Corporation has received the audit report and has provided a
response. We expect a final report to be issued shortly, and I
will directly communicate those results to you.
We know we've come a long way, and we know we still have
some distance to go to achieve our goals. Mr. Chairman, this is
likely to be the last time you will hold the gavel in a hearing
on appropriations for the national service programs, a fact
that gives all of us a great sense of loss. We have appreciated
your wisdom, your guidance, your thoughtfulness, and your
support. You played a central, critical role in making national
service a vital part of this Nation's civic life.
Like you, my tour of duty will be ending later this year,
so this will probably be the last time I appear before this
Committee. It's been a great privilege to head the Corporation,
to work with you and the Subcommittee and to see national
service win more and more bipartisan support in Congress and
nonpartisan support around the country. Thank you.
Mr. Porter. Senator, thank you very much for your kind
words. Your plans are to return to academia?
Mr. Wofford. Maybe a little bit. [Laughter.]
Mr. Porter. Maybe.
Mr. Wofford. And to champion the cause of national service
as a private citizen.
Mr. Porter. Wonderful. Well, as I say, you've done a
wonderful job there, and the country appreciates your service,
both in the legislative branch and the executive branch.
Now we have to talk about the financial audit a little bit.
We understand that, as you said, the 1999 audit is going to be
released very soon, we understand as early as tomorrow.
Mr. Wofford. We would hope so.
Mr. Porter. And as you also indicated, it shows progress in
reducing the number of material weaknesses. But it still will
not be a clean audit. Is that the correct understanding?
Mr. Wofford. Right. We have a clean audit on the initial
basic statement of financial position, and disclaimers on the
related two statements.
Mr. Porter. And that will indicate a level of progress
above the 1998 audit. What would you expect for the year 2000?
Will you be able to get a clean audit then, or a qualified
opinion or what?
Mr. Wofford. I'd like you to hear from our Chief Financial
Officer, or Chief Operating Officer. But let me just say that
we believe the progress we've made this year in implementing an
entirely new state of the art financial management system and
other very significant things that have enabled the National
Service Trust, through web based reporting and remedial work
with the digital imaging system relating to the 150 some
thousand members of the Trust, have put us in a position, a
good solid position, to move to clean opinions next year.
But I'd like you to hear from those that know more about
this. They've been an extraordinary team who had the
difficulty, Mr. Chairman, this year, of going from financial
reporting system, that like many government agencies, was
antiquated and out of date, to an entirely new system. They
converted it during the year, and kept our flow of resources to
the several thousand grantees and agents of the Senior Corps
and VISTA going while converting to this system, a process we
had to do in order to comply with Y2K problems. Which we did,
we made it, and we kept the ship moving.
Mr. Musick. Mr. Chairman, I think it's probably
inappropriate to say that we will get a clean opinion. I think
the thing that we try to do is to continue to improvethe
activities of the organization. For example, this past year, when
you're bringing on new staff and you're putting in a new financial
system, and we had the old system for 10 months, which was our problem
in the previous year, 1998, it's very difficult to say what you can do
in that period of time.
In addition to that, there were so many process changes.
When you bring on a new system, you're changing all the
accounting practices that people enter data and have to follow.
So there was a lot going on.
I think we are making incremental improvements. I think
we're improving the links between the system so the data will
be entered once, and then it will be passed electronically. But
my hesitancy is that I don't control the audit. That's through
the IG. And they come in as an independent look. And really for
me to say yes, we're going to get a clean opinion, I don't
think that's really appropriate. All I can really promise is
that we're going to work hard to try to clean up the things
that were still a problem.
From what I understand from the auditors, we really had one
major issue this year. And we tried to overcome that to the
very end. And we don't know if we had had more time we could
have. But there was just a lot of difficulty in converting to
the new system and trying to do everything. And I think that
was the problem.
But again our goal is, of course, to get a clean opinion on
all statements and move that way.
Mr. Porter. Well, our job is to pressure you to do that.
Mr. Musick. Yes, sir. [Laughter.]
Mr. Porter. And we're doing that. I will leave a note for
my successor to be after you next year, how's that?
Mr. Musick. Sounds good.
Mr. Porter. Senator, the programs have been unauthorized
for four years, I understand. Is there any progress on
reauthorization? Do you expect any of them to be reauthorized
this year?
Mr. Wofford. We are hopeful that the Corporation and all
its programs will be reauthorized. We expect the
reauthorization bill to be introduced within a month. We have
strong bipartisan groups in both Houses that have stepped
forward to be the co-sponsors. We should be able to report very
soon to you the schedule and proposed steps in both Houses.
Mr. Porter. In response to a question submitted for the
record last year regarding a stipend increase in the senior
programs, the Corporation indicated that a 5 cent increase,
equaling $1 per week per volunteer, does not make
administrative sense and is generally viewed negatively by
volunteers. My understanding is that stipends have not been
increased since fiscal year 1998.
Are you requesting a stipend increase in the senior service
programs in the next fiscal year? And what is the Corporation's
position on providing a 5 cent increase?
Mr. Wofford. Could I ask Tom Endres, the Director of the
Senior Corps, to respond?
Mr. Endres. Mr. Chairman, in considering a possible bill
for the reauthorization, we've committed as an organization
that we would fight for an increase once over the authorization
period should that move forward. Our current plans with the
amount of money the President is requesting in this particular
budget would not allow us to do a stipend increase in 2000.
Obviously we believe, and are concerned about the level of
stipend necessary for Foster Grandparents and Senior Companions
and are tracking that.
If we had our preference, our preference would be to
increase the stipend more than 5 cents, just because we believe
that Foster Grandparents volunteers deserve it. We believe it's
absolutely necessary to the program to sustain the current
level of current volunteer involvement. And as I mentioned from
an administrative perspective, it is much easier to do in one
fell swoop.
Mr. Porter. We are about to remove the earnings limitation
or offset for seniors 65 to 70. And I think the President has
already said he will sign that. What effect will that have on
the volunteers?
Mr. Endres. We'll have to analyze that, Mr. Chairman. We
haven't really begun to do that. We'll have to really step back
and as that proposal moves forward, carefully assess the
impact. I have not had a chance to do that.
Mr. Porter. Would that obviate the need for a stipend
increase where people actually end up with more in terms of
personal revenue?
Mr. Endres. All I can say at this time, Mr. Chairman, is we
really have to look at that carefully.
Mr. Porter. I would ask that you do that analysis and
submit it for the record when you've completed it. I realize
it's going to take some time to do it, but we'd like to see
that and see what effect that might actually have.
Mr. Endres. I'd be happy to do that, Mr. Chairman.
Mr. Wofford. That's a good question, Mr. Chairman. We were
just agreeing we want to get the answers for ourselves and to
you.
[The information follows:]
Mr. Porter. It may make some significant difference to
people that are volunteering for the programs.
Last year, Congress enacted language stating that no funds
could be used to provide tax-free stipends to volunteers whose
incomes exceeded the income guidelines established by Congress
for stipends paid under the Foster Grandparent and Senior
Companion programs. This provisionwas put into place because of
concern that limited Federal dollars should only go to people who meet
the means test established by Congress.
Of course, we encourage volunteering by all segments of
society, but the idea behind creating an income threshold is
that persons above this income level are able to afford to
volunteer without a Federal subsidy. I see your budget proposes
to remove this language this year, and I presume this is
because you plan to pay people above these income thresholds
for their volunteer efforts.
Why would you propose to remove this language, and what is
the average annual income of a retired senior living solely on
Social Security?
Mr. Wofford. I'd like Tom Endres to first comment on that.
Mr. Endres. Mr. Chairman, we have followed to the letter
the directions provided to us by your Committee. We have heard
loudly and clearly the message of the Appropriations Committee
and the priority to maintain and continue to expand
opportunities for low income people.
We intend to follow the Committee's direction and
instruction. And again, we have done so. As far as next year is
concerned, we do not intend to use appropriated monies to
provide any incentives for people who do not meet income
eligibility requirements for the programs. We do, and are
offering a new approach to senior demonstration programs and in
so doing, we are shifting the focus from determining particular
improvements that we can make in the existing programs to the
issue of how do we really develop sufficient numbers of
opportunities through the existing programs and other programs
to meet and keep up with the growing aging population within
our country.
The issue we want to study is really the issue of helping
large, non-profit organizations figure out how they can
mobilize significant numbers of seniors to further their
organizational missions and meet particular objectives of their
organizations. If in the implementation of that program we want
to or find the need to provide for an intensive, which may mean
a 15 hour week commitment for a year, we've determined from
prior demonstrations that that particular role, a commitment of
a year, 15 hours a week or more, is really an important role if
we're going to help local organizations expand their use of
other volunteers.
But if we use such a role in our approach to
demonstrations, we will do that by borrowing a notion that's
been successful for VISTA in recent years, and that's a cost
sharing approach. Or we will develop partnerships so that any
incentives that are provided in the demonstration program will
come from non-appropriated sources.
Mr. Porter. Like what?
Mr. Endres. We might ask foundations, try to develop a
partnership with an existing foundation who has an interest in
expanding senior service opportunities in the country. We might
look to other philanthropic approaches or corporations. We
might ask the organizations that we fund demonstrations through
themselves, an organization like Big Brothers Big Sisters, or
Lutheran Social Services of America, to actually contribute to
the support of those roles which we feel are important.
Mr. Porter. Wouldn't this be an area where the earnings
limit would be particularly important, since this would affect
the higher income people much more than the lower income
people? In other words, people who are above the threshold
would get a better break than others who may have already had a
break because of the amount that they could earn and not have
the offset. Again, I think that's going to have an effect
that's probably going to be positive.
Do you think that people need to have some form of reward
to recognize their worth? In other words, is there some
element, not of monetary income, but of recognition, that says
``this makes me a part of the organization and shows that I'm
doing something worthwhile?''
Mr. Endres. Yes, Mr. Chairman, I think that that's an
important factor. In addition to that, I believe that to really
ask people to commit a year, on a 15 hours per week basis, it
does require some kind of an incentive or recognition for them
to make that commitment, particularly if we're going to ask
them to take on some of the high priority needs facing our
local communities.
Mr. Wofford. Tom, you might just suggest the dimension that
so far the Senior Corps has been testing, which is, if I'm
right, about an average of $150 a month for those that do 15 or
20 hours. Am I correct?
Mr. Endres. That's correct. Through the Seniors for Schools
programs that we have been managing, and will be completing the
final year in that, what we found is that the incentive of, on
average, $150 a month to defray out of pocket expenses for that
year-long commitment of 15 hours a week, is about what it
takes.
And what the participants in the demonstration program are
telling us is that, without that incentive, they would go back
to serve typically what we find is served through the RSVP
program, Retired and Senior Volunteer Program, which is on
average three to five hours a week. So without that incentive,
somehow it makes a difference to the nature of the commitment
and the time that they're willing to devote.
Mr. Porter. I think you could even see it for those of us
that run for public office. It used to be that people would
just come in and volunteer. But then they got the feeling that
if they had some sort of compensation, they'd actually be a
part of the campaign apparatus and have status and it was
meaningful. Not necessarily money, but just recognition that
they were an important part of the staff.
Senator Wofford, I'm pleased to see that your budget
justification this year includes some performance indicators.
And I'm especially pleased to learn the progress you've made in
the Programming for Impact effort. However, from the
information presented in the budget justification, it looks
like many of the performance indicators you are tracking
measures outputs, rather than outcomes. And most of these
measures, which are designed to track outcomes, still do not
contain data.
When will you be able to start reporting actual data on
your program's performance?
Mr. Wofford. I would like you and your staff to review the
Results Act report, the GPRA report that in the next few days
will be coming to you, to see if you still have that concern
when you read the full detail. Only some fragments of the
preliminary results were in the budget presentation.
Actually, it is such an important question, it's related to
both VISTA and the senior program. If briefly Matt Dunne and
Tom Endres could comment on that, I'd appreciate it.
Mr. Porter. All right.
Mr. Dunne. Thank you, Mr. Chairman. First of all, I was
delighted when I came on board, I think it's nine weeks ago,to
be able to review a set of goals that are set out as clearly as they
are in our GPRA report. That allows someone who is coming in and trying
to get up to speed quickly a sense of the priorities, where we're
heading and where we need to allocate our resources.
Many of the GPRA goals that you have seen and that we've
reported on and that we will continue to report on get to the
core of what we feel we have control over in VISTA. And that
includes the number of volunteers that we're able to acquire,
making sure that they have a positive experience, making sure
that they are supported effectively, and that they complete
their year of service. And that's one of the things that we
look to as one of the major things that we can control.
I do know, however, that you also have interest, as do we,
in the ultimate impact of those services on the outcomes for
the beneficiaries that they're serving to help. And to that
end, we have taken on a couple of different kinds of studies.
And we are continuing to look for other ways to measure that.
I would point to, since you have had an interest in
literacy in the past, a study that was just completed, which I
believe we provided, which was on the D.C. Reads program, which
was a local demonstration project we did. And we just did an
evaluation of year two. And in that evaluation, we were able to
take quantitative analysis on a longitudinal basis to look at
improvements in our target audience in those areas, to see that
they were actually improving their literacy and being able to
most importantly catch up to their peers at the same level and
be able to then be on an even playing field when they enter the
later years of school, which are frequently the most difficult.
I would encourage you to look at the summary of this
report, because I think it's in line with what you're looking
for. We're also undertaking a large AmeriCorps-wide analysis of
literacy programs that we're involved in. That will look at
other Reads programs that VISTA is involved in, as well as
other literacy programs on a more macro basis across the
country. And that should be available in September.
My hope is to incorporate those into future GPRA goals and
allow us to measure ourselves against those.
Mr. Endres. Mr. Chairman, in response to the Government
Performance and Results Act, we've set particular goals for
each of the three programs. In the Retired and Senior Volunteer
Program, we have set a goal of 20 percent of the Retired and
Senior Volunteers assigned through a position description that
specifically defines what those volunteers will be
accomplishing in the community. And we're pleased to report
that over 32 percent of the Retired and Senior Volunteer
programs have assignments now that are specifically oriented
towards outcome assignments.
What we've done then is we've taken each of the programs
and we've completed an accomplishment report. And we're happy
to provide the accomplishment reports as part of the record, so
that we're able to see then within those 32 percent of
assignments exactly what is being accomplished by the Retired
and Senior Volunteer Program.
[The information follows:]
Mr. Endres. Similarly, for the Foster Grandparent Program,
we set a goal this first year, 50 percent of all the
assignments. And the goal that we have achieved is 64 percent.
And again, we've done an analysis of the accomplishments that
those 64 percent Foster Grandparents are achieving.
In the Senior Companion program, the goal, because the
Senior Companion program within it had a requirement for a care
plan, which included some definition of what it was that a
Senior Companion was going to achieve in relationship to the
care plan for the client, we established a very high goal for
the Senior Companion program of 75 percent of all assignments.
And we've achieved that mark.
So we believe that our system is working, and that we have
set up a third party survey system that will actually capture
the accomplishments that the programs are achieving on an
annual basis.
Mr. Porter. Well, I would just say that obviously, we like
to know how many volunteers there are and how many dollars are
being spent and how many centers may be maintained and the
like. But what we really want to know, and what's really
important to us is what difference you're making in people's
lives, and is the money really buying what we intend it to buy
in helping people live better or live longer or live more
helpfully or the like.
And so those are the goals that we want to focus on. And we
want to keep you working toward that end and making certain
that that's what you're telling us as we go along, and that
you're meeting those goals.
Mr. Wofford. Mr. Chairman, could I just say that, and I
speak for the Corporation, we wholeheartedly agree with you. We
are particularly interested in applying service to great goals
and show that you can reach them. The literacy efforts are
focused largely on seeing in the fourth grade reading tests, at
the end of the third grade, we close the gap from 40 percent in
the country, we play a critical role in programs that close the
gap between the 40 percent that do not pass the basic standards
grade level test at the end of third grade, a great proportion
of whom head to disaster thereafter. And we want to help
achieve that goal, we want to measure it community by
community, school by school.
Same way with the new digital divide effort. It's going to
be measurable in very clearly tested ways whether those that
are not getting any knowledge or any access to computers and
the information highway, particularly young people, getit. I
think increasingly, and we will press for that, we have those goals and
we give you reports year by year.
Mr. Porter. Yes, sir.
Mr. Wofford. You and I are getting those reports from a
little distance.
Mr. Porter. Yes, and if we see that the money is not
getting what we expect to get, then we have to re-think the
program and make sure we are supporting something that gets
results for people. That's the whole purpose.
Well, I'm sorry to have to cut this hearing short. As I
explained, we need to do that. And I very much thank you for
your testimony and for your service, Senator. And I thank all
of you for answering our questions.
And we'll take a short recess at this point.
Mr. Wofford. Thank you, Mr. Chairman.
Thursday, March 30, 2000.
NATIONAL MEDIATION BOARD
WITNESSES
ERNEST W. DUBESTER, CHAIRMAN
STEPHEN E. CRABLE, CHIEF OF STAFF
JUNE D.W. KING, CHIEF FINANCIAL OFFICER
Mr. Porter. The Subcommittee will come to order.
We continue our hearing on the fiscal year 2001
appropriations with the National Mediation Board. We're pleased
to welcome Ernest W. DuBester, Chairman of the Board.
And before you give your statement, Mr. Chairman, I'm
advised by my staff that your budget justification was very,
very late in arriving, in fact arrived only last week. And we
need to have the budget justification in time so that we can
review the materials and prepare for the hearings. And I would
ask that you give your personal attention to ensuring that that
comes to the Subcommittee in a timely fashion next year and
this problem is not repeated.
Please proceed with your statement.
Mr. DuBester. Good afternoon, Mr. Chairman. Let me just say
I will give that my personal attention and I apologize to you
and the Subcommittee for the delay in the statement's arrival.
And any time that you need from me in terms of sorting through
information or asking questions subsequent to the
Subcommittee's hearing today, I'm obviously willing to provide
to expedite your work and that of your staff.
Introduction of Witnesses
Accompanying me today to my left is Stephen Crable, our
Chief of Staff. And to my right is June King, our Chief
Financial Officer.
Summary Statement
I've submitted a brief summary statement which I
respectfully ask be incorporated into the record. I also would
ask that while we formally transmitted to you, Mr. Chairman, a
copy of our annual performance report, if I could, when we're
concluded here, if I could personally hand you a copy, I'd
appreciate that opportunity.
Mr. Chairman, as you know, we're a small agency. But I
believe we have a large mission, namely to assist in the
constructive resolution of a variety of labor management
disputes in the airline and railroad industries. Beyond the
importance of the work that we do, I think it is often
misunderstood by many the extent of our responsibilities and
the volume of our work. For example, high profile matters such
as the resolution of the collective bargaining dispute
involving U.S. Airways and the flight attendants, in which the
Board played a role and I personally played a role, are quite
visible and well understood by the general public.
But in fact, on a daily basis, we're handling
responsibilities that involve several hundred carriers in the
airline and railroad industries that involve almost a million
employees. And many of those carriers are not as well known,
and you don't think about them on a day to day basis.
But I would say to you, Mr. Chairman, that notwithstanding
that fact, over the last few years, we've made a concerted
effort, responding to a large extent to the message that we've
heard from you and this Subcommittee, to try to do more with
less. And toward that objective, I would just refer you in our
budget submission on pages two to three, that if you just look
at the appropriation for the years between 1994 and 1999, that
six year period, you will see that at the end of that period,
we were still receiving an appropriation after six years that
was lower than that we had received in 1994.
And again throughout that period, we made an effort to
improve our productivity, our efficiency and the quality of the
services that we provided to all the parties in the airline and
railroad industries.
Now I would submit to you, Mr. Chairman, that in a sense we
are the victims of our success. Because our intense efforts
over the past several years, which include revamping our work
force, a major reorganization that you were helpful in seeing
us through, the upgrading of our services, the increase in the
number of programs that we offer, have been very well received
by the customers we serve in the airline and railroad
industries. And I believe that you should have heard that or
will be hearing that in the near future.
But it has also led to a dramatic increase in the demand
for our services. For example, in the last fiscal year, we
closed 180 cases which is more than 200 percent above the
number of cases that we closed for the five year average
between 1994 and 1998.
STAFFING
And we achieved this result, I would emphasize,
bymaintaining the pursuit of doing more with less. Because in one very
meaningful respect, throughout this entire period, we have been very
understaffed. Currently as I sit before you today, we are more than 15
percent below the ceiling that we are authorized to have in terms of
the number of employees, or full time equivalents, as you understand.
And I would suggest that to maintain the current level of
services for our projected caseload in the mediation area, the
agency is going to require additional mediators. And I would
point out that this is projected within this budget request.
ALTERNATIVE DISPUTE RESOLUTION
Another reason for the increased demand for our services
involves an initiative that we launched in 1997, which we call
the Dispute Resolution Initiative. And its purpose essentially
is to assist representatives in the airline and railroad
industries to learn and apply more constructive and less
confrontational methods for resolving disputes.
And I will tell you as part of that initiative, Mr.
Chairman, it involves our agency and our staff providing
training and education to the parties, both in new techniques
to improve the quality of collective bargaining, to provide
alternative ways, as I said, that are more constructive and
less confrontational, that can bring us to both quicker and
more positive resolution of some of the disputes that we face.
PUBLIC-PRIVATE PARTNERSHIP
Toward that end, one initiative that we've launched this
year that we're kind of excited about, which among other things
provides an opportunity, we believe, for a unique public-
private partnership, which can maintain and complement the
quality of services we've been providing and perhaps defray
meaningfully the extent to which our resources are needed to
provide that endeavor.
And that involves an initiative with one of our local
universities, the George Mason University, where we worked out
an opportunity where we hope to create an interdisciplinary
center at the law school at George Mason, along with one of
their institutes, which is the Institute for Conflict Analysis
and Resolution, which is one of the original such institutes
for conflict resolution in this country.
And we're very excited about the opportunity there. As I
indicated, we hope that it can provide both a supplement and a
complement to our ability to provide the training to the
airline and railroad customers that we're currently providing,
as well as to assist in our professional development program
for our mediators.
And the startup costs for that initiative are also part of
the budget request for this next fiscal year.
SECTION 3 ACTIVITIES
Finally, I would just mention that in our appropriation for
fiscal year 2000, Congress included an increase of $500,000
over the request for the purpose of reducing section 3 case
backlogs by improving the availability of arbitrators through
increased arbitrator compensation. And we provided to the
Subcommittee, Mr. Chairman, a brief report on the results,
which are limited in terms of time as to the impact of that
supplemental appropriation.
ARBITRATORS' SALARIES
I would just point out briefly that it involves an effort
in a vital part of our statutory mission, by which we have
statutorily the obligation to pay for arbitration proceedings
in the railroad industry, whereby we can increase the daily
rate to the arbitrators that we use for that business to the
level of $300. And I would just say, it would be the first time
that they've had an increase since 1982. So it's been almost 20
years.
And number two, I would point out that in the rest of the
private sector, the average rate that most of these neutrals
receive is about $600. And obviously we have what I would call
a competitive disadvantage in terms of attracting and retaining
quality neutrals to perform this service. But we think that
this increase, at least, will go a long way and has already
shown evidence of going constructively towards the ability to
both resolve our grievance arbitrations more efficiently and
hopefully reduce the number.
ARBITRATION PILOT PROJECTS
In addition, we have a number of pilot projects that we've
initiated with the cooperation, again, of the parties that we
work with in the railroad industry. And we hold out great hope
that they also can improve both the efficiency with which they
are resolved, but also long term reduce the number of cases
that contribute to our backlog.
And so we have a non-traditional pilot project that we had
with one of the class one railroads, the Norfolk Southern, and
one of the organizations on their property, the Brotherhood of
Locomotive Engineers, that had very good results. There's been
a major initiative agreed to this year involving all four class
one railroads, and another organization, United Transportation
Union, which both represents the largest number of employees in
the railroad industry, but also is the largest user of the
section 3 process.
And this is a commitment to the grievance mediation
project, which again we think holds a lot of potential for both
improving the efficiency of the handling of these kinds of
disputes as well as reducing the number long term.
So I've submitted that report. I'm happy to answer any
questions that the Subcommittee has about any area, of course.
I just want to add, since it was mentioned earlier, and of
course it's a public announcement, that as one who has spent
more than 50 percent of his life in Government service, which
is about 15 years, and I know you've announced you're
anticipating the end of 20 years of service here in the
Congress, that I appreciate that public service. I appreciate
the role that the Subcommittee has played both in considering
and understanding our mission. And, I wish you well in the
future.
[The prepared statement of Mr. DuBester follows:]
Mr. Porter. Thank you very much for saying that.
I was looking at the appropriations over the last five or
six years as opposed to the President's requests to the
Congress. And we have either come very, very close in two of
the six years to the President's request. In three others we
exceeded it very substantially. And in only one have I noticed
that were substantially under the President's budget request.
One is, well, first, let me say that you have a very
important role and we know you need resources to do your job
well, and our job is to get you the resources that you need, so
that you can avoid the kinds of conflicts that shut down
portions of our transportation industry, and obviously cause
great disruption to commerce and cost the Nation, as well as
individuals, a great deal of resources and time.
But you're telling me you're doing such a good job with
less, I'm inclined to say maybe we ought to keep it less and
keep you doing the good job.
Let me ask a question about commuter rail. It seems like
every five or six years, we have a major confrontation that
affects commuter rails that the Congress eventually ends with
legislation. Are we likely to have that any time soon, or have
we passed that by already?
Mr. DuBester. Well, we constantly have, given the number of
commuter rail properties that exist, mostly in thenortheast
corridor, but one near your home, Metra, and for a variety of reasons I
will just say to you that Metra has been able to deal with their
business, if you will, in a fairly distinctive way. And in fact, I
don't think it's inappropriate to say that we actually have them
visiting our offices tomorrow to share their experiences with our staff
and with the board.
But I would say, Mr. Chairman, while I'm aware of the
matters that you refer to, that I would say during my time on
the board, which is now going on seven years, and I'm pleased
with respect to the role that the Congress plays in these
matters of public interest and involving interstate commerce,
that these matters have not come before Congress during that
time. And they've been resolved through what I would call the
statutory processes and the processes of collective bargaining,
almost always with our mediatory assistance.
So I'm hopeful that that record will continue. And while I
know that there are a number of unresolved disputes involving
again, mostly the commuter rail properties in the northeast
corridor, I don't have any reason to believe that they're going
to require turning to you for assistance, if you will, or
imposition of any kind of solutions.
Mr. Porter. What was the last time Congress had to
intervene? It was some time ago, you're telling me. Over seven
years, you're saying.
Mr. DuBester. Well, I would say over seven years, and I'd
be guessing with preciseness, even though I can remember some
of the disputes in the 1980s more, where I think Congress had
to involve themselves, one involving the Long Island Railroad,
I recall. There may have been another one. I can remember one
involving either Metro North or New Jersey Transit.
The Long Island Railroad is one that comes to my mind, and
that was in the 1980s.
Mr. Porter. Time flies when you're having fun.
Mr. DuBester. Exactly right. [Laughter.]
Mr. Porter. How much of your increase, your increase is
what, $850,000? Does that sound right, in round figures?
Mr. DuBester. In round figures, I'd say a little less than
that, but in round figures, yes, sir.
Mr. Porter. How much of that would go to this George Mason
University initiative? That's a new initiative.
Mr. DuBester. Yes, sir, Mr. Chairman. It's $180,000.
Mr. Porter. And are there other participating entities
besides the board and the University?
Mr. DuBester. Well, what we anticipate is, and this is
where we will get the complement to our recurrent training and
education services, we are in the throes of establishing a
steering committee which I think will rotate probably on an
annual basis. And the steering committee will probably consist,
again, of representatives of some of the major airlines and
major railroads and their employee representatives.
That is why again I characterize this initiative as one
that holds the potential for a unique public-private
partnership. Because we're hopeful that a lot of the resources
that we currently need to think about or allocate for these
educational and training purposes will be borne by the parties
themselves with our assistance and cooperation.
But the actual initiative itself, other than what I just
said, is basically an effort to create, as I said, an
interdisciplinary center at the University with our
involvement.
Mr. Porter. A final question, pertaining to case closure
rates. You've stated, the investment made by the Board over the
past several years in recruiting new mediators and upgrading
the skills of existing mediators likewise paid dividends during
the fiscal year through a dramatic increase in case closures.
And you've described that. The statistics provided indicated 76
percent reduction of cases closed in fiscal year 1999, and in
your closure forecast rate for fiscal year 2000 and 2001, you
indicate you cannot sustain the rate that was achieved in
fiscal year 1999.
Why was the rate higher in fiscal year 1999 and why can't
you maintain that kind of rate in the ensuing years?
Mr. DuBester. Well, we believe that the rate was higher in
1999 for a couple of reasons. Generally just the positive
response to our constant attempts to persuade the parties to
pursue more constructive ways of resolving their disagreements,
if you will, and then providing meaningful assistance.
But in particular, the one distinctive feature involves our
dispute resolution initiative. In fact, I have a brochure on
that which I'll provide for you, Mr. Chairman, when I give you
our annual performance report. And that involves now a number
of matters, a number of cases that we never had before. We
launched that in 1997.
So fiscal year 1999 was really the first time when we saw a
large number of matters before us involving training and
education of the parties in a variety of major disputes to help
them provide alternative ways of resolving disputes that
minimize if not eliminate the potential for confrontation.
For example, and this is not even reflected in fiscal year
1999, we recently assisted in an agreement being reached
between Continental Airlines and the flight attendants. They
agreed with our assistance to use what I'll call a non-
traditional alternative dispute resolution process for reaching
their agreement. And it's certainly again indicative of a
growing trend and response.
The reason why I say that we cannot maintain that is, with
all due appreciation to the comment you made about wanting us
to keep doing more with less, is we are understaffed. We are
probably six to eight below staff with our mediators. I would
say while they're all dedicated, hard working people, that if
we don't give them some relief in terms of spreading out the
work that they are currently performing, we're going to lose a
lot of the talent that we currently have. And I think that
would really be unfortunate.
Mr. Porter. Do we assume correctly, Mr. DuBester, that the
figure you're requesting is the figure that was submitted to
OMB by you?
Mr. DuBester. Yes.
Mr. Porter. So that if you got an appropriation of this
magnitude that would solve the problem of having too little to
work with?
Mr. DuBester. Yes, it is, Mr. Chairman. And we would be
committed to making it work with that, of course.
Mr. Porter. All right. Thank you very much for your
testimony. I'm sorry, again, to have to cut the hearing short.
We're going to do our best. As I said earlier, you perform
a very important function in our society. You're very correct
that people only hear about what you do when something goes
awry and breaks out into a dispute that gets out of control.
That's I think unfortunate, that people don't understand that.
We do. And we're going to do our best to provide the resources
you need.
Mr. DuBester. We appreciate that very much, Mr. Chairman.
Mr. Porter. Thank you very much.
The Subcommittee will stand in recess until 10:00 a.m.
Tuesday next.
[The following questions were submitted to be answered for
the record:]
Wednesday, April 13, 2000.
UNITED STATES INSTITUTE OF PEACE
WITNESSES
RICHARD H. SOLOMON, PRESIDENT, UNITED STATES INSTITUTE OF PEACE
CHESTER CROCKER, CHAIRMAN OF THE BOARD OF DIRECTORS, UNITED STATES
INSTITUTE OF PEACE
HARRIET HENTGES, EXECUTIVE VICE PRESIDENT, UNITED STATES INSTITUTE OF
PEACE
CHARLES E. NELSON, VICE PRESIDENT, UNITED STATES INSTITUTE OF PEACE
Introduction of Witnesses
Mr. Porter. The subcommittee will come to order. Before we
recognize the United States Institute of Peace, I want to read
into the record that this is the last regular hearing of this
year. We have had 77 total hearings; 32 hearings for the
Department of Health and Human Services, 10 for the Department
of Education, 7 for the Department of Labor, 13 hearings for
independent agencies under our jurisdiction. We have had 61
Members testify and 190 public witnesses testify individually.
This is a huge workload, and I want to thank the members of
our staff. Tony, Carol, Susan, Jeff, Francine, and Tom have
done an absolutely marvelous job for us. They are true
professionals. We are dependent on their knowledge and judgment
for the decisions that we make, and we are blessed to have such
capable and honorable people serve as our staff of this
subcommittee. I know that Members on both sides of the aisle
feel this way.
Our last but not least, the United States Institute of
Peace, and we are pleased to welcome Dr. Richard H. Solomon;
the Director; Chester Crocker, the Chairman of the Board of
Directors; Harriet Hentges, the executive vice president, and
Charles Nelson, the vice president.
Nice to see all of you. I apologize for the long delay and
appreciate your patience.
Dr. Solomon.
Opening Statement
Mr. Solomon. Thank you, Mr. Chairman. It really is an honor
again, for my colleagues and myself, to have this opportunity
to report to you on our work and specifically to review with
you our request for our fiscal year 2001 appropriation request
of $14,450,000. This amount is an increase of just about a
million and a half dollars over the Institute's fiscal year
2000 appropriation. This increase is much needed to make
possible, in particular, expansion of our Balkans work, further
development of our conflict resolution training activities,
creation of new educational programs, and to help fill a gap in
the Arab-Israeli peace process--I am sorry, the Israeli-
Palestinian peace process.
INSTITUTE ACCOMPLISHMENTS
Fifteen years have passed since the Institute's creation in
1984. Can we say that we have made a difference? Mr. Chairman,
I believe the answer is an unqualified yes. We can say with
confidence that the work of the United States Institute of
Peace is strengthening our nation's ability to deal with
conflicts around the world by political processes and to
achieving America's foreign policy goals by means short of war.
How is this so? How can we make that statement? We are
training professionals in conflict management and peacemaking
skills. And there is now a worldwide network of more than 150
former Institute fellows serving as professionals in conflict
management around the world. As examples I might cite Adnan Abu
Odeh, who was selected as the chief political adviser to the
new King of Jordan; or Colonel Jim Warner, who commanded the
U.S. brigade in Tuzla after his year with us as an Army Fellow.
As I indicated, these individuals are some of the over 150
former Fellows who are the alumni of our programs. They are the
human embodiment of the work and the purposes of the Institute
of Peace, the people who are implementing the skills that are
the result of our training programs.
The Institute is helping former adversaries find common
ground. There is a deeper understanding among communities in
conflict--Kosovar Albanians and Kosovar Serbs, Chinese from
Taiwan and mainland China, Palestinian and Israeli youth--of
the costs of unending conflict as a result of the frank and
constructive dialogues facilitated by the Institute.
We have shown senior officials in such places as Indonesia
and Bosnia how processes of reconciliation and justice can help
create sustainable peace through the rule of law. We have
expanded the range of policy options for senior officials here
and abroad through the workshops and writings that are much of
our work day to day, giving alternatives to the use of force--
most notably, perhaps, through the efforts of our Korea Working
Group.
We have developed flexible and mobile training programs to
help professionals in many countries become state-of-the-art
conflict managers--in the Balkans and Southeast Asia and
elsewhere.
Institute publications, now widely used in university
teaching and research, are expanding the body of knowledge
about the underlying sources of conflict in today's world and
approaches to dealing with them.
We are developing curricula on conflict resolution to help
educators attract the next generation of practitioners and
thinkers to careers in international affairs.
As a result of our work, a growing number of leaders from
the U.S. and abroad now turn to the Institute as an
independent, nonpartisan forum to address questions of
international conflict. In the past 2 years, world figures, led
by President Clinton and including the Presidents of Ecuador
and Peru, and Mr. Chen Shui-bian, the newly elected President
of Taiwan, have chosen the Institute as a platform for major
policy addresses or as a vehicle for policy development
workshops. They tell us that we are making a difference for
peace.
PROMOTING PEACE IN THE BALKANS
Mr. Chairman, let me briefly review the programs that we
propose to expand in the coming year. First and most time-
urgent are activities designed to build and keep the peace in
the Balkans. The Institute has made a special effort in the
Balkans for 5 years, developing a mixture of mutually
reinforcing programs both on the ground in the region and here
in Washington.
Our projects in the Balkans are extensive and numerous. We
are supporting peace implementation efforts in Croatia, Bosnia,
and Kosovo and activities designed to prevent further armed
conflicts in Serbia, Albania, Macedonia, and Montenegro.
When Serbs and Albanians met at Rambouillet in early 1999,
two of the delegates had had the benefit of Institute training
programs in negotiating skills. We are currently working with
the U.S. Army to provide conflict resolution and negotiation
training to Serbs and Albanians in the U.S. sector of
operations, and we are collaborating with the State Department
to bring Kosovo Serbs and Albanians together to develop a
tolerance for ethnic differences in Kosovo.
The themes of our Balkans work are stabilization and
security, prevention of new or escalating conflicts, and
support of indigenous and regional efforts to promote peace and
security. To these ends, we will use additional funds requested
for fiscal year 2001, among other things, to expand the efforts
to bring Serbs and Albanians in Kosovo into dialogue; focus on
reconciliation efforts in Brcko by bringing together local
groups; support grass-roots conflict prevention efforts in
those parts of Montenegro where future violence may break out;
continue to support the creation of a truth and reconciliation
commission in Bosnia; work to prevent conflict in Macedonia and
Albania, specifically through conflict resolution training as
well as sessions of facilitated dialogue; and we plan to work
with educators in the Balkans who are now at the front lines of
conflict prevention as they promote curriculum reform and
textbook revision related to conflict resolution.
In Washington, the Institute's Balkans Working Group
continues to provide a unique forum for administration
officials, regional experts, and private sector NGOs active in
the Balkans to exchange information, develop policy options,
and build consensus on steps needed to secure peace in that
region.
We strongly believe that our peacekeeping efforts in the
Balkans are an essential element to stabilizing that troubled
region and protecting our national investment in peace there.
National Security Advisor Samuel Berger and U.N. Ambassador
Richard Holbrooke have acknowledged our important role in this
regard. Secretary of State Madeleine Albright has written to me
that it is her hope, quote, that the Institute will be able to
expand its resource base both to carry on its important work in
this region, and to meet new challenges as they arise, close
quote.
CONTINUING EXPANSION OF PRACTITIONER TRAINING
Closely related to our Balkans work are efforts to expand
training activities for practitioners in conflict management
and negotiation skills. Of all the Institute areas of activity,
our training program has shown the greatest growth and
evolution over the past year. We are benefiting from the
seasoned leadership in our training efforts of Ambassador
George Ward, who, encouraged by your support for this work, Mr.
Chairman, has rapidly developed our training programs.
By several measures, the ongoing expansion of the
Institute's training activities has been notably successful.
The number of persons trained increased by 400 percent between
fiscal year 1997 through fiscal year 1999. This current fiscal
year we project another increase of 65 percent in the number of
individuals trained over last year.
Perhaps just as, or more, important than the numbers of
individuals trained, training evaluations are enthusiastically
positive, with former students telling us of concrete instances
in which Institute training helped them better manage real-life
conflict situations in their professional assignments. The
Institute's worldwide network of partnering training
organizations has been strengthened, and our partners regularly
provide financial and/or in-kind support for our joint efforts.
We continue to train practitioners involved with conflict
management in every area of the world. We maintain strong
institutional associations abroad with a range of international
organizations. Within the United States we work in cooperation
with the Department of State, the Agency for International
Development, the Department of Defense, the Federal Mediation
and Conciliation Service, and federally-funded research and
development organizations.
Let me mention just two of our many training initiatives to
illustrate the nature and the variety of our programs. Police
training is an interesting example. Physical security, of
course, is crucial to postconflict stability, as is a keen
understanding of local circumstances. These are the objectives
of our police training as in a recent orientation program for
all U.S. police officers who volunteer for service as
international police in Bosnia, Kosovo, and East Timor. We will
also train police, together with local Balkan officials,
community leaders, and international police monitors on
problems of policing in a democratic political environment.
And there is a program entitled Women Waging Peace. The
institute has played an integral role in training a worldwide
network of women leading conflict resolution efforts in their
local communities. This past year we worked with 110 women
community leaders brought together at Harvard University from
10 different zones of conflict around the world to address
their own experiences in conflict management and resolution.
The increased funding requested for fiscal year 2001 will
be devoted to working with vulnerable governments and local
organizations in Southeastern Europe and the former Soviet
Union to reduce the likelihood of ethnic and religious
conflict. Our objectives are to prevent new Bosnias and
Kosovos; to upgrade the skills of Americans, both civilian and
military, who are assigned to work in peace operations; and to
focus on conflict areas in Africa, Asia, and Latin America.
EDUCATING THE EMERGING GENERATION
Now let me briefly comment on our work in educating
emerging generations. To create a less violent world, we have
to do a better job of educating new generations of potential
leaders about the difficult challenges they will face, the
options that they might have in responding to future conflict
situations, and an awareness of the range of peacemaking skills
available to professionals. We are therefore proposing to
expand significantly our educational activities, both within
the United States and abroad.
In the United States we plan to double the number of
Institute-run, high-demand faculty curriculum enrichment
programs, allowing us to work with hundreds of high school,
college, and graduate school faculty from New York to Hawaii
who are teaching the emerging generation of potential
peacemakers. Similarly, building on Institute-supported
cutting-edge research, the annual peace essay contest and path-
breaking Institute books on negotiating skills and the art of
third-party mediation, we plan to intensify the development of
teaching materials--written, audiovisual, andinteractive--to
prepare this next generation.
Outside of the United States, we plan to work with faculty
in countries in conflict using educational programs as a means
of building conflict resolution capacity.
SUPPORTING THE ARAB-ISRAELI PEACE PROCESS
Finally, we propose to fill a gap in the Israeli-
Palestinian peace process. Peace between Israelis and
Palestinians will require cooperation on a myriad of routine
legal issues: Which laws apply? Whose court has jurisdiction,
and who will enforce the court's decision? Without a fair legal
process, a minor issue such as an automobile accident can
become a larger political incident, and too often does.
At the request of senior Israeli and Palestinian officials,
the Institute has organized a special dialogue on Palestinian-
Israeli legal matters, working under a previously nonoperative
provision of the Oslo Accords. The Institute is requesting for
the coming fiscal year additional funds to help build
professional relationships between these two legal communities
to help them jointly explore a range of common operational
issues, a process that they have not been able to undertake
without outside facilitation and that no other international
party is now supporting.
The Israeli and Palestinian Ministers of Justice have both
expressed to us their appreciation of the Institute's efforts
in this area and requested our assistance in developing further
joint activities designed to promote day-to-day relationships
grounded on the rule of law. Senior U.S. officials also have
urged us to expand this effort as an important element in the
overall Middle East peace process.
Given the substantial increase in the Institute's
programmatic work, Mr. Chairman, it is important that we
maintain the strength and effectiveness of our administrative
and support units. For this reason we are planning a modest
increase in staffing for the Institute's publications and
administration activities.
DEVELOPING A PERMANENT HEADQUARTERS
Before concluding, Mr. Chairman, I would like to touch on
two other activities that I think are worthy of mention here.
As you know, the Institute is continuing to advance its project
for a permanent headquarters facility at 23rd Street and
Constitution Avenue here in Washington. Fundraising is ongoing,
and we have now raised over $2.5 million from private sources,
and I am pleased to say that just yesterday we received from a
private family foundation a $1.5 million donation to this
project.
At the building site, the Institute has completed boundary
and topographical surveys, and is conducting the analysis
required for what is technically termed an ``architectural
program.'' That is an assessment of how much space we need to
carry out our work now and in the future. This survey has
established the size of a building that can be constructed on
the site and the rough dimensions of a facility that will serve
the Institute's needs as best we can anticipate them well into
the new century. We expect to move forward in selecting an
architectural design team later this year.
UTILIZING INFORMATION TECHNOLOGY
Let me stress, Mr. Chairman, that the Institute's permanent
facility will be more than a bricks-and-mortar institution. We
intend it to be, in the argot of our times, a ``clicks-and-
mortar'' enterprise. As part of the architectural work, we are
designing a cyberstructure for this building. This is the
``clicks'' part of the equation, to capture the benefits of the
telecommunications revolution, to give the Institute the kind
of global outreach that is now made possible by advanced
communication technologies, but without requiring a major
increase in staffing size.
As an example of the power of this technology, I might
mention that we recently began Webcasting our current issues
meetings, and one such recent session, which was a review of a
book that we recently published on the challenges of
negotiating with the North Koreans, reached a global audience.
During this Webcasting session, we had a real-time call-in
question over the Internet that came in from, of all places,
Mongolia--as well as from other parts around the world. This
gives us a dramatic example of the kind of global outreach that
this new technology affords the Institute.
In closing, Mr. Chairman, 15 years is enough time for us to
have made an impact, but it is clearly too short a time to
fully realize the promise of the Institute's charter from
Congress. I believe we have laid a solid foundation in our
programs that will train the talent for better managing
international conflict well into the 21st century. A century
from now I believe our successors will look back and be
appalled by the primitive way that we dealt with conflict in
this just-concluded 20th century, not to mention in earlier
times.
Before I conclude, I would like to give Dr. Chester
Crocker, the Chairman of our Board, an opportunity to make a
comment or two about our work.
EXPRESSION OF APPRECIATION
Mr. Crocker. Thank you very much, Ambassador Solomon.
Mr. Chairman, it is great to be with you again. This is the
last of a long series of hearings you have held, and I will be
very brief.
I want to say a word of thanks on behalf of the Board of
Directors for your support during the past 6 years that you
have been Chairman--and long before that as well--on your
service in this committee.
You have heard Ambassador Solomon say that we are making a
difference. And he is right, but I would like to add that you
have made a difference in your support for this organization.
We appreciate it. Your commitment to our training and education
programs has urged us on so that today we can hardly keep up
with the demand for our services. And I think what Ambassador
Solomon has indicated, that we are scrambling to keep up with
the demand for our work, and we are going to keep ahead of the
curve if we can. And we appreciate your support. This
investment, yours and ours, is a long-term commitment to
America's future and for a future of goodwill and peace. This
is what this Institute is all about.
We wish you well. We thank you for your support, and we
hope to stay in touch. Thank you, Mr. Chairman.
PLANS FOR PERMANENT HEADQUARTERS
Mr. Porter. Thank you for those very kind words. I have
been a fan of this concept and this institution from the very
beginning. And let me ask some kind of nuts-and-bolts questions
first. What was your first year appropriation, doyou remember?
Mr. Solomon. About $5 million.
Mr. Porter. We haven't made nearly enough progress. All
right.
How much money is needed to build the building? I realize
you are not even into the architectural program, but what do
you estimate you need to get this done?
Mr. Solomon. We are raising money for three purposes:
first, the physical construction of the building; second, we
want to raise an endowment for operations and maintenance
costs, to keep up the facility so that we are not drawing so
heavily on our annual appropriation; and third, a small
endowment for program-related hospitality.
I should also add, built into this effort are the costs of
fundraising, which we are trying to keep to a minimum, and also
the architectural work. We now estimate that the total cost is
going to be something in the range of 50- to $70 million.
Mr. Porter. How much of that is nonendowment fund, in other
words, actual construction, do you estimate?
Mr. Solomon. The first very rough cut of cost based on
square footage estimates was something in the range of 25- to
$30 million.
Mr. Porter. Well, Dr. Solomon, I need to correct--I
described your position as Director. You are president of the
U.S. Institute for Peace.
Mr. Solomon. I feel like a quarterback.
EXPANDING SUPPORT FOR THE INSTITUTE
Mr. Porter. You are the quarterback then.
I think the Institute of Peace has more than met our
expectations over the years. You are really everywhere where
there is need for conflict resolution and ahead of the
existence of many. Unfortunately, human beings have a
proclivity to continue to create them at too large a rate. It
is like dealing with human rights problems. There seems to be
an unending supply, and you hope to reduce that over a period
of time, and that is, of course, what your purpose is in
reducing conflicts and heading them off before they can do real
damage.
It seems to me that--and these are comments more than
questions--but it seems to me that not enough is known outside
of government circles about your work. I doubt very much that
most Members of Congress know much about it at all, and somehow
we have got to correct that because they ought to know about
it. They ought to be inspired about it. They ought to be
supporters of it. And we need to do something to change that
lack of knowledge, and I am stating the issue without stating
how to do it. It is hard to do, obviously, and I realize that,
but somehow there has got to be a greater understanding, at
least outside this subcommittee, of what it is you do and why
you are making a difference as you are.
Mr. Solomon. Could I just comment on that briefly?
Mr. Porter. Sure.
Mr. Solomon. We fully realize the importance of trying to
both broaden understanding and support in Congress for our
work. What we have learned over the last few years is that,
given our modest size as an organization, it is particularly
important for us to work with congressional staff, who are the
main folks focusing on our work. We make a consistent effort to
invite staff to our programs, and in other ways make sure they
understand what we are up to.
Secondly, we have designed a number of programs to be held
here on the Hill to make it easier for the Members to
participate in programs. For example, one of our very inspiring
programs is called Seeds of Peace and brings together
youngsters from Israel, from the Palestinian areas, from the
contending areas of Cypress, and from the Balkans Teenagers at
this very impressionable age deal with each other in a
supportive environment, draw out their hostilities, their
stereotypes, and get to see that they can work together. We
published a book on this experience and held a book-launching
party here on the Hill that had, I think, seven or eight
Members of Congress come to the event. So it is those kinds of
activities we work on to try to broaden understanding here in
Congress.
The irony is, Mr. Chairman, that in some ways we are better
known abroad than we are in this country. If you go to the
Balkans, if you go to South Korea, if you go to certain areas
in the Middle East, you will find that the Institute of Peace
is better known than it is here in Congress.
Mr. Porter. We have got to change that. That, for example,
getting young people together who might otherwise learn only
one side is, to my way of thinking, wonderful work that we need
to provide tremendous support for, and we are not doing nearly
enough to make that happen. Are there any similar institutions
in other countries like yours; in other words, that are
separate agencies, not part of their diplomatic apparatus?
Mr. Solomon. There are a number of private foundations and
some government-supported institutions.
Mr. Porter. Where are the countries that have government-
supported institutions?
Mr. Solomon. Canada, Norway, Switzerland. There are a
number of foreign affairs-oriented organizations--what you
might call ``think tanks''--in Indonesia, in Japan, in China,
not necessarily directly oriented to our work, and we have
begun to do some partnering with these folks. But, again, our
resources are stretched to the limit.
What we are finding, and our Chairman just underscored this
for me, is our use of the Web site--our ability to reach out
through electronic mail, and our Institute Web site, is turning
out to be an extremely cost-effective outreach vehicle for this
institution. We find that our Web site is now visited by people
around the country and the world over 10,000 times per week
when there is some particularly active event under way. We have
had on occasion 10,000 hits per day on our Web site, so we are
finding this is a very cost-effective and a dramatically
visible way of reaching out to people interested in our work.
INSTITUTE RELATIONSHIP WITH EXECUTIVE BRANCH
Mr. Porter. Describe for me your relationship with our
State Department, realizing that you have many people who have
been at the State Department on your faculty. But is there a
good working relationship and a positive experience in the two?
Mr. Solomon. I guess the way to put it is as the State
Department, and the National Security Council and the Pentagon
learn about our work, we are under increasing demand to work
with them--in no small measure because we have certain
resources they don't have. Their own budgets are stretched and
they increasingly turn to us and look to partner with us in
ways that are increasingly operational.
When I first came to the Institute some 6 years ago, the
policy planning staff of the State Department asked that we
collaborate in a study of what was then a notion of
``preventive diplomacy.'' Since that time our work with
theState Department has become increasingly operational. For example, a
few months ago State asked us to organize for them a seminar with
senior Indonesian officials--the Minister of Human Rights, the Attorney
General, and several others--to explore how other countries had dealt
with the legacy of human rights violations. So we, working with the
State Department, put together such a program.
Last fall our Chairman and our Executive Vice President,
Harriet Hentges, convened a meeting at the Lansdowne Conference
Center of the Kosovar Albanian leadership, to try to get them
to see the role they could play in the peace process in Kosovo.
We offered similar activities to the Serb communities. We did
one program with Kosovar Serbs in Sofia, again with State
Department collaboration or encouragement. So we are
increasingly moving from an institution generating knowledge to
one that is becoming quite operational.
Mr. Porter. You then see yourselves as both teachers and as
operations people? You see both roles?
Mr. Solomon. Teachers in the sense of educators, trainers
in the sense of preparing professionals for operational roles,
and to some degree playing a hands-on operational role on our
own part.
Mr. Porter. If we are having a negotiation--a part in the
negotiation between Israel and the Palestinians, let's say, how
are you brought into this process? Are you invited in by our
State Department for a specific role? Do you initiate this
yourself saying, we have a role that we can help play? How do
you go about becoming a part of this process, or is it just
automatic?
Mr. Solomon. The answer, in a sense, is ``all of the
above.'' The example I mentioned of our work with both the
Palestinian and Israeli officials on rule of law promotion
really came about because of the initiatives of Neil Kritz, who
runs our Rule of Law program, but the State Department involved
in overall responsibility for the peace process supported this.
Mr. Porter. Did they call you and say, we need you to do
this? In other words, how do you get into the process?
Mr. Solomon. Once we had demonstrated an initial success
through contacts by Mr. Kritz, then we got a call from the
officials saying, ``we need more of this.''
There is another example I might cite. We ran a facilitated
dialogue between the Chinese from Taiwan and from the China
mainland several months ago. This was before the recent
election. These are people who had stared at each other across
the Taiwan Strait but had never met face to face. They had 3
days of what turned out to be a promising dialogue. They saw
where their differences were, but expressed an interest in
cooperation. Following the Presidential election, we are now
being approached by people on the Taiwan side to help them
further develop a dialogue with the mainland. So it is an
interactive--it is an active/interactive process.
In the case of the legal activities, our Chairman reminds
me that Father Ted Hesburg, who, as you know, is on our Board,
is on the so-called ``anti-incitement commission,'' which is
part of the Wye agreement. This commission encourages Israeli
and Palestinian communities, through their press, their
textbooks, not to incite more hostility and stereotypical views
of the other. Father Hesburg has been dealing with the people
in the region, and he has played a role in stimulating
awareness of what the Institute could do in the rule of law
area.
NEED TO PUBLICIZE WORK
Mr. Porter. Dr. Solomon, it seems to me, for example, the
Balkans, although it drops off the major news focus, it is a
huge success story. Yes, there are still problems, but think of
the fact that people aren't getting killed there. People are
living in relative peace. We are teaching younger generations
to be sensitive to one another and through your efforts in an
area where people have killed each other for a long, long time
whenever they got the opportunity to.
The point I want to make here is not enough people know
that it is a success, and not enough people get information as
to the role of the U.S. Institute of Peace in respect to that
success. I am not saying you should hire a publicist, but--I am
serious about this--but I do believe that you have to somehow
get up on the screen of the news networks, not necessarily the
nightly news, but the analysis--I don't know, the New York
Times Magazine, whatever resonates with people, what you are
doing and how you are helping to make a difference.
I realize there is some risk in that: If something goes
wrong, you also get part of the blame. But it seems to me we
have got to sort of raise consciousness that this effort is
going on in our country, that we are providing this leadership
out across the world, that other people in the world understand
it and appreciate it, and that you are making a difference in
holding down the level of conflict and anticipating heading off
conflict everywhere.
Mr. Solomon. Mr. Chairman----
Mr. Porter. I know you are going to say you need more money
to do that.
Mr. Solomon. No. What I was going to say is that you just
helped me in a little debate we are having internally. We
looked at the issue of hiring someone to further our press
outreach and have a trade-off between bringing someone in to
raise our visibility in that regard versus putting staff into
other areas of activity.
UNMET BUDGETARY NEEDS
Mr. Porter. That gets back to the money thing. Do you have
a professional judgment budget that you submit; in other words,
your wish number?
Mr. Solomon. We generally look at what we can cope with
roughly at our present size of activity.
Mr. Porter. Let me ask it this way: What was the number you
submitted to OMB before this number found its way into the
Presidential budget?
Mr. Solomon. $14.9 million.
Mr. Porter. About $500,000 more.
Mr. Solomon. The point I wanted to make is we had a
discussion with them and came to an agreement on a number. We
asked for the additional amount, but ended up agreeing with
them on a smaller figure.
Mr. Porter. If you had $5 million more in your budget, what
could you do with that money that you can't do now?
Mr. Solomon. There are several areas of activity that I
think are worth expanding. One, we have unfunded educational
programs at the undergraduate level that I think are worth
expanding, and to some degree at the graduate level--again, to
attract new generations into this work. I think we could very
usefully expand the number of Fellows who we bring to the
Institute. One of the unique aspects of our work is that we
don't have a permanent research staff even though all of my
colleagues who are on the staff have their areas of expertise.
There is a tremendous demand to be a fellow of the Institute of
Peace for a year and work on some war- and peace-related issue.
About half our fellows are foreign nationals. It is very hard
for folks from Northern Ireland, from the Middle East, from the
former Soviet Union to find anopportunity to come to this
country and work with colleagues from the United States on issues of
conflict management in their countries. We could expand the number of
our fellows, let's say, by 10.
We could make an important investment in the infrastructure
of electronic outreach, which has a tremendous leveraging
effect on our work. For example, our National Peace Essay
Contest: we now reach 7- or 8,000 kids around the country. We
have the capacity through the Internet, through Webcasting,
through teleconferencing, to start reaching 10 times that
number. States around the country are beginning to wire up
their classrooms. So we could, again, take the work that we do
and give it much more outreach through a modest investment in
the technology that will enable us to do so electronically.
I am tempted to ask my colleagues how they want to spend
the money.
NEED FOR MORE EDUCATIONAL FUNDS
Ms. Hentges. Let me add some specifics to what Dr. Solomon
said. One of the areas we cut back after we submitted our
budget to OMB was work supporting education in foreign zones of
conflict. We think that some of the work we do now with high
school and college and university teachers in the U.S. is
valuable. We requested funds for doubling that effort in the
U.S., but we can also do that work in the Balkans and some of
the other zones of conflict. But we had to scale that back.
Right now all we have been able to plan is some help with
textbook revision and curriculum reform, but there is certainly
more that can be done with educators there.
We also have, I think, some programs with the next
generation in the zones of conflict where you replicate the
successful experience of dialogue across differences. So I
think that is an important area. Very often the training
programs that we do lead to facilitation opportunities because
of the information we provide and the confidence that they
begin to have in us because of that experience. And so I think
there are a number of ways that that could be expanded as well.
Mr. Crocker. Mr. Chairman, if I could respond quickly to
that challenge as well. This is an organization that has no
slack in it at all. In fact, it is negative slack, and I have
been on this Board for 9 years, most of those years as
Chairman. I sometimes feel like it could be for life unless the
appointment process can move a little swifter. In my experience
looking at the organization grow and develop and reach out,
there are lots of situations where we simply do not have the
manpower, the person power, the horsepower to send out a
response team to assess a situation, an opportunity, for
example, for program development, for training, for education,
for facilitation. We just don't have the horses. We are very
much stretched.
So we feel--I think I can speak for everybody here--that
there would be times when you wish there were just one or two
more people who could respond to that situation at fast break,
whether it is Indonesian transition, the development of a real
humanitarian crisis in Sierra Leone where you might be able to
do something.
Mr. Porter. Well, I apologize for having to--we could talk
a great deal more because you are doing so many interesting
things. It seems to me there is a great deal of creativity and
imagination going into how you can make a difference with a lot
of different programs aimed in a lot of different directions
that shows people are really thinking these things through, and
trying to change behavior, and anticipate problems. And I love
the idea of working with young people in conflicted situations
to try to change the result in the future. I think that is
very, very important work.
We need to do a better job on your funding. At one time
there were active hostile enemies in the Congress in the early
years. I think that that has changed, although I don't want to
test it to find out. I think that that has changed. And what we
need to do is to find a way to give you additional resources so
that you can take advantage of the opportunities that are there
to make further difference, and I am not sure quite how to do
that, but I know I would like to do it and want to do it, and
we are going to have to look at creative and imaginative ways
on this side to see how we can make the growth of this
institution occur at a faster rate and allow you to do much
more of what all of us understand is God's work and makes a
difference in individual and country lives that is so important
to the future of life on this planet.
So thank you for the wonderful job you do, and we will do
our best to try to reflect that in our appropriations process.
Thank you all for being here.
Mr. Solomon. Thank you, Mr. Chairman.
Mr. Porter. The subcommittee stands in recess until May 2
at 10:00 a.m.
[The following questions were submitted to be answered for
the record:]
Thursday, April 6, 2000.
NATIONAL COUNCIL ON DISABILITY
WITNESSES
KATE PEW WOLTERS, VICE CHAIRPERSON
ETHEL D. BRIGGS, EXECUTIVE DIRECTOR
Mr. Porter [presiding]. The subcommittee will come to
order.
Introduction of Witnesses
We continue our hearings on the budget for fiscal year
2001, and are pleased to welcome Kay Pew Wolters, the Vice
Chairperson, accompanied by Ethel D. Briggs, the Executive
Director of the National Council on Disability. Nice to see
you.
Please proceed with your statement and then we will see if
we have questions.
Ms. Wolters. Thank you. I believe that you have my prepared
testimony for the record. And I have some brief remarks in
addition.
Before I begin, I bring greetings from our chairperson,
Marca Bristo, who is from your fair state, Illinois. And I
would also like to congratulate you on your upcoming retirement
and thank you for your support over the years. We have enjoyed
working with you and your staff. Thank you very much.
Opening Statement
First, I will present you with an overview of NCD and our
work, and highlight some specific areas of our work during the
last few years. Then I will present our proposed budget for
fiscal year 2001, with an explanation of this proposal.
Finally, I will make a few closing remarks and then welcome
any questions.
NCD is an independent Federal agency makingrecommendations
to the President and Congress on disability policy that affects 54
million people with disabilities, regardless of age, disability type,
perceived employment potential, academic need, specific functional
ability, or any other circumstance.
NCD is comprised of 15 members appointed by the President
and confirmed by the U.S. Senate. Our members span from the
East Coast to the West Coast. We come from all walks of life;
we come from rural and urban areas, we are culturally diverse,
and we represent all disabilities.
UNIQUE ROLE OF THE NATIONAL COUNCIL ON DISABILITY
Established in 1978 within the Department of Education, NCD
was designated as an independent agency in 1984 so that it
would be in a unique position to offer objective and
independent expert advice to the Congress and the
administration.
Our authorizing legislation, the Rehabilitation Act,
provides a very broad mandate covering all aspects of
disability policy. While many government agencies deal with
issues and programs affecting people with disabilities, NCD is
the only Federal agency charged with addressing, analyzing and
making recommendations on issues of public policy that affect
people with disabilities.
NCD recognizes its unique opportunity to facilitate
independent living, community integration and employment
opportunities for people with disabilities by ensuring an
informed and coordinated approach to addressing the concerns of
people with disabilities and eliminating barriers to our active
participation in community and family life.
Major Accomplishments During FY99 and to Date
I would now like to highlight some of the major
accomplishments of NCD during fiscal year 1999 and to date.
As a result of recommendations that were made from hundreds
of disability leaders in 1996, and compiled in our report
``Achieving Independence,'' NCD is currently coordinating a
multiyear study on the implementation and enforcement of
several civil rights laws for people with disabilities,
including the ADA, the Individuals with Disabilities Education
Act, or IDEA, the Air Carrier Access Act and the Fair Housing
Act.
On March 18, 1999, NCD released a ground-breaking report
documenting the ineffective enforcement of the Air Carrier
Access Act since the law's passage in 1986. NCD's report,
``Enforcing the Civil Rights of Air Travelers with
Disabilities,'' contains recommendations on how to improve
enforcement, including changes to the law and improvements for
the Department of Transportation.
Unfortunately, NCD found that although things have improved
since the Air Carrier Access Act was passed in 1986, people
with disabilities continue to encounter frequent significant
violations to their civil rights. When we complain, we
encounter an enforcement effort that is both inconsistent and
limited in scope.
The Department of Transportation and Secretary Slater have
addressed many of our concerns in new rules and communications.
MINORITY OUTREACH
Now I would like to take a moment to elaborate on NCD's
outreach to people with disabilities from diverse cultures. NCD
has conducted several meetings and hearings to gather
information from people with disabilities from diverse cultures
and rural areas. As a result, NCD published its 1999 report,
``Lift Every Voice: Modernizing Disability Policies and
Programs to Serve a Diverse Nation.'' The executive summary of
this report was released at the White House Forum on Disability
and Cultural Diversity that also celebrated the ninth
anniversary of the Americans with Disabilities Act. The forum
convened by the White House and NCD, with support from the
Leadership Conference on Civil Rights, focused on how to
improve outcomes in education, employment, and civil rights
enforcement for people with disabilities from diverse cultural
backgrounds.
I am delighted to tell you that in May, NCD will conduct
Think Tank 2000, Coalitions for Advancing the Civil and Human
Rights of People With Disabilities From Diverse Cultures. The
Think Tank is a brain child of our second vice chairperson,
Judge Hughey Walker and will include invited leaders from
diverse cultures include people representing grass-roots
disability and traditional civil human rights groups as well as
the Chairs of the Congressional Hispanic, Native American,
black, and Asian and Pacific American Caucuses.
The purpose of Think Tank 2000 is to highlight common
causes and identify key strategies for eliminating barriers to
civil and human rights for people with disabilities from
diverse backgrounds. An action plan from Think Tank 2000 will
then be presented to the President and to the 106th Congress.
The committee will hear more about Think Tank 2000 at next
year's hearing.
NCD receives literally thousands of telephone calls, e-mail
messages and letters from concerned individuals and
organizations about disability issues. With continued
refinement of its award-winning Web page that receives more
than 600,000 hits per year, and e-mail capabilities, NCD's
outreach to its constituents continues to grow in record
numbers.
Current Activities for FY 2000
NCD's proposed priorities for the current fiscal year 2000
include the implementation of a policy fellowship program for
new and emerging leaders with disabilities, completion of a
study of Federal policies affecting access to technology for
people with disabilities, and completion of the first phase of
the Disability Civil Rights Monitoring Project which looks at
implementation and enforcement of disability civil rights laws.
NCD will continue its studies that monitor the
implementation and enforcement or the Fair Housing Act
amendments and section 504 of the Rehabilitation Act.
We will conduct briefings in the 10 Federal regions to
gather input on the national enforcement agenda developed from
the Disability Civil Rights Monitoring Project reports.
On January 20th, NCD released its report, ``From Privileges
to Rights: People with Psychiatric Disabilities Speak for
Themselves.'' NCD board member, Rae Unzicker, presented the
report on behalf of NCD at the winter conference of the
National Association of Protection and Advocacy Systems. The
report is based on NCD's testimony from mental health
professionals, lawyers, advocates, and relatives of people with
psychiatric disabilities and from people with psychiatric
disabilities themselves.
They describe in graphic detail how people with psychiatric
disabilities have been beaten, shot, isolated incarcerated,
raped, deprived of food and bathroom privileges, and physically
and psychologically abused in institutions in their
communities.
This testimony resulted in a number of recommendations for
change in the way people with psychiatric disabilities are
treated. The most important is the elimination of coercion.
``From Privileges to Rights'' calls on the President and
Congress to address the many problems faced by people with
psychiatric disabilities and ensure that they are fullyand
substantively involved in the making of policy changes that will enable
them to claim their full citizenship rights.
With regard to the Disability Civil Rights Monitoring
Project, parents, students, and disability advocates braved a
blizzard to participate in NCD's January 25th news conference
highlighting the release of its ``Back to School on Civil
Rights'' report. The report confirms what parents and children
with disabilities have repeatedly told NCD, that noncompliance
with the Individuals with Disabilities Education Act, IDEA, has
persisted in some States over many years, placing enormous
burdens on children and families. NCD also found too many
parents of children with disabilities continue to spend endless
resources to overcome obstacles to their child's basic right to
an appropriate education, often at the expense of their
personal lives, their careers, and their family's financial
security.
Planned Activities and Budget Request for FY 2001
And now on to our current requests: NCD is requesting
$2,615,000 for fiscal year 2001, which is an increase of
$215,000 above that appropriated for fiscal year 2000. These
additional funds will primarily be used to cover operational
costs, such as the cost-of-living and rent adjustments, three
FTEs, and funds for research and contractual.
In fiscal year 2001, NCD will build upon fiscal year 2000
activities. Our proposed activities for 2001 include the
continuation of the second phase of the Disability Civil Rights
Monitoring Project, which includes continued work from studies
on the Fair Housing Act and the Rehabilitation Act that began
in fiscal year 2000; an assessment of the process for
addressing the civil rights compliance of various agencies at
the regional and State levels; and a review of the
implementation of the United Nations Standard Rules for the
Equalization of Opportunities for Persons With Disabilities
within the U.S. Federal agencies dealing with international
disability issues.
NCD's fiscal year 2001 initiatives capitalize on NCD's
ability to play a unique and valuable role in the Federal
policy process. With this requested increase, NCD will continue
to strengthen the linkage between the administration, Congress,
and the growing but often overlooked constituency of people
with disabilities.
In fiscal year 2001, we are proposing to undertake major
and important initiatives designed to markedly improve
disability policy in this country. We have historically
operated in a cost-effective manner, with a small core staff to
identify issues and coordinate research projects.
Closing Statement
In conclusion, we are very excited about our planned
activities for 2001. As an independent Federal agency
representing the concerns, needs, and interests of our
constituents, and yours--currently 54 million Americans with
disabilities and their families--we will continue to provide
the President and Congress with timely information and advice
on the most important issues facing all Americans with
disabilities.
I hope that you will contact NCD at any time, should you
need information regarding issues affecting people with
disabilities. Thank you for providing us with an opportunity to
present testimony on our 2001 budget request, and I would be
happy to answer any questions you might have.
[The information follows:]
Mr. Porter. Thank you very much. That was a very fine
statement.
We have 54 million people with disabilities out of a
population of approximately 270 million. Do we have any
historical figures as to whether the numbers are going up or
down or steady?
Ms. Wolters. Do you know, Ethel?
Ms. Briggs. Basically, the number of people with
disabilities is increasing. The reason is because of
technology. For example, a person could have had an automobile
accident 10 years ago that would have been fatal. Today, we
have medical technology that would keep those people alive and
they become people with disabilities.
Mr. Porter. I just had the son of one of my former chiefs
of staff severely injured in an automobile accident, both head
injuries and internal injuries, and they said 10 years ago he
never would have had any chance. He's a 14-year-old boy. Two
weeks later he is up walking around. He still has, obviously,
very severe problems resulting from the accident. But they said
he would never have survived, so that is very understandable.
I would like you, Ms. Wolters, because you are going to
know more about this than anyone, to look at the direction of
the life of people with disabilities, first in the United
States and then worldwide, and tell me whether we are going in
the right direction--not in terms of policy; I know you deal
with policy. I want to know the results. Are their lives easier
or better? Are we moving in the right direction? Do you
understand?
Ms. Wolters. Yes, I think I understand your question; and
the quick answer to that is, yes. We are moving in the right
direction, because the other direction was so bad.
And there is one thing that we cannot change, and that is
attitudes. Some of that is changing, but some of the attitudes
towards people with disabilities are still discriminatory, are
still in ways that thwart us. I think that laws can help change
those attitudes without a doubt; and the laws that are in place
right now have helped us amazingly in many ways. At 42 years
old, I can tell you that when I went to a segregated school
through 12th grade, there was no law to protect me. And now
there are laws to protect people who are going through the
education system.
Therefore, I was not given the education and the
opportunities that I should have been given. I survived
nonetheless, but it is amazing to me the opportunities that
young people now have that I did not have as a young person.
And so, I can only tell you that things are, yes, definitely
getting better.
Is there a lot of room for improvement? Of course, there
is.
Mr. Porter. Look worldwide for me, because we have a
population worldwide that is increasing very rapidly. We have a
lot of places on the planet where there is not any substantial
level of health care that could help people. What is happening
to other people, outside the United States? I suppose to kind
of pinpoint it, Canada would probably be similar to the United
States or maybe even better, and in Europe it would probably be
good, but other places not.
Ms. Wolters. It is amazing to me in the last several years,
there have been numerous international conferences related to
disability issues in places that I would never have imagined
would even be thinking about these issues.
They are looking to us as the experts, the United States
and NCD as well. It says to me that there is movement, there is
evidence that there is empowerment and that there is awareness.
I think that from a physical accessibility standpoint, things
have definitely gotten better.
From a treatment issue, I think that there are some
cultural problems that none of us can get around that are very,
very disheartening, that are very much a cause of concern about
how other countries treat children with disabilities and that
is disheartening. All we can do, and what we are doing, is work
to make sure they have the proper information to make sure they
understand that children with disabilities will grow up to be
great members of their society.
Mr. Porter. It seems to me that this country is predominant
in so many ways at the moment, that we have great opportunities
to change the mind-set of the world in many different ways; and
this is an area where we can reach out, and I am sure you are
doing exactly that, to try to change everyone for the future so
that people with disabilities will have a better life. It seems
that the United States can project that kind of leadership.
Ms. Wolters. Your comment is so timely, Mr. Porter. As we
speak, the National Council is holding a 2-day conference on
international issues related to people with disabilities over
at the Washington Marriott, which is where I will be going when
I am done here and why our chairman is not able to be here.
Mr. Porter. We did not hold this hearing at a very timely
place, I am sorry.
Ms. Wolters. We were in town anyway, so we are happy to be
here.
Mr. Porter. You talked about IDEA, and we have jurisdiction
in this subcommittee over funding for IDEA, and we have put
substantial increases in IDEA funding that we hope will be very
helpful to young people with disabilities in school.
There is one thing that I want to pass along. We are such a
litigious society that often people go to an attorney right
away when they have a problem. I would make a suggestion that
you put out on your Internet site, or however you communicate,
that very often the first place that people ought to go is to
their Member of Congress.
We had a case in my own district, one of our school
districts was not providing the kinds of access and
opportunities, and there was a discriminatory attitude toward a
young person with a disability in one of our high schools. We
called them up, got the superintendent and talked to him
directly. The whole thing turned around without it costing $1.
They understood that we were watching them, that they were not
complying with the law in providing the kind of services they
should. It turned it around completely.
I think Members of Congress can save a great deal of
resources, a great deal of time, and get results very fast
because most of us do not sit on the sidelines. We want to help
people who need our help. It is a human thing and a political
thing, both. And I think that--tell people when they have a
problem, go see their Member of Congress, because they have
staffs that know these issues, and we are not afraid to tell
people when we think they are wrong.
Ms. Wolters. I appreciate that, and your district is lucky
to have somebody that is as concerned as you are about this
issue.
Mr. Porter. Well, I am lucky to have a staff like I have.
I think the most high-level case involving the ADA recently
is the Casey Martin case, where you have had a decision that
this young man, who has a disability with his leg--he has a
rare blood disorder or circulation disorder--has been ordered
by the ninth circuit to be provided a cart so that he can
compete in professional golf tournaments. You are probably
aware of this.
There is another case in the seventh circuit that was
brought by another individual against the United States Golf
Association, which is the one that handles amateur
competitions, and that case went the other way.
And right now, my understanding is that the ninth circuit
is seeking certiorari in the Casey Martin case to have the case
reviewed by the Supreme Court.
Do you get involved in this by way of discussion within the
Council or even by way of providing an amicus brief in the
court taking a position on behalf of the disabled individual?
Ms. Wolters. Yes, we have. Not in this particular case.
Mr. Porter. But you do this kind of thing?
Ms. Wolters. Yes, Mr. Chairman.
Mr. Porter. Why not in this case, just as a matter of
curiosity?
Ms. Wolters. I think partly because of staff resources. It
was not one that was brought to our attention by our
constituencies. While it is, I think, an important matter,
there were several other cases that some consumers thought were
probably more legally challenging that we have been involved
in.
Mr. Porter. I tried to say at the beginning this may not be
the most important case, but it is a case that is fairly high
level in the press.
Ms. Wolters. I understand.
Mr. Porter. And I thought maybe you might be involved in
it.
Information technology is changing our whole economy, and
maybe the whole world, in profound ways that we probably do not
fully recognize or understand yet. But one of the ways that it
is allowing people to work is to stay at home and work at a
computer.
How is this likely or how is it affecting people with
disabilities who often have had transportation problems, access
problems and the like?
Maybe this is a salvation for many people that will allow
them to be fully employed, gainfully employed and earning a
good income where they might not have had that opportunity
before. Are you seeing that, or am I missing something?
Ms. Wolters. It is a double-edged sword, Mr. Chairman. You
are right. Many, many people would believe that a bird in the
hand is worth two in the bush. To be able to have a job, to
have the employment, to have the money to be able to spend on
health care, et cetera, is certainly the primary goal.
But imagine the isolation. Imagine the isolation that
people with disabilities would feel working in their home day
after day after day.
I have some feelings about taking the Department of
Transportation off the hook. The Department might say all these
people with disabilities are going to work at home, so you do
not have to provide transportation. The same applies to taking
businesses off the hook by saying you do not have to provide
reasonable accommodation because you can go work at home.
To a certain degree, it gives us boundless options; to
another degree, it limits us incredibly.
Mr. Porter. You see, that is what people without
disabilities do not quite understand, because I did not see
that; and now when you say it, of course, I see it very
quickly. Yes, the isolation would be a very negative thing.
Well, it may help on the income side. I don't think it
should let the Department of Transportation or others off the
hook in any way, because people without disabilities do not
stay at home, they go out and do things; and people with
disabilities obviously need to do that also, and they still
need the access and the transportation to go about the rest of
their lives, beyond the employment part.
Ms. Wolters. I would think that the technology would be
able to help people with disabilities to be more integrated
into the work force.
Mr. Porter. Yes. Staff has prepared a number of questions
that are important on the budget. Some of them, you have
already addressed in your remarks. I think I am going to submit
the rest of these for the record and let you get to your
conference.
Ms. Wolters. Thank you very much.
Mr. Porter. Thank you very much for the job that you are
doing there, and we are going to do our best to provide the
resources you need.
Ms. Wolters. We appreciate it.
Mr. Porter. Thank you.
The subcommittee will stand in recess until 2 p.m.
Thursday, April 6, 2000.
ARMED FORCES RETIREMENT HOME
WITNESSES
DAVID F. LACY, CHIEF EXECUTIVE OFFICER/CHAIRMAN OF THE BOARD
BRIGADIER GENERAL JAMES F. HENNESSEE, DEPUTY DIRECTOR, U.S. SOLDIERS'
AND AIRMEN'S HOME
CAPTAIN JESSE H. VASQUEZ, MSC, USN, DIRECTOR, U.S. NAVAL HOME
Call to Order
Mr. Porter. The subcommittee will come to order. We
continue our hearings on the appropriations for fiscal year
2001 with the Armed Forces Retirement Home. We are pleased to
welcome Mr. David F. Lacy, the CEO and Chairman; Major General
Donald C. Hilbert, U.S. Army (Retired), and Captain Jesse H.
Vasquez, MSC, USN, Director, U.S. Naval Home. Gentlemen, we are
glad to see you.
You have a wonderful advocate on this subcommittee in Mr.
Cunningham, and Mr. Bonilla as well; and they are going to look
after you, as I am.
Good to see you. Please proceed.
Introduction of Witnesses
Mr. Lacy. Thank you, Mr. Chairman.
Honorable members, I am pleased to appear before the
committee today to testify on behalf of the Armed Forces
Retirement Home. You have my prepared statement, which I ask to
be entered into the record. I am accompanied today by
representatives of our two facilities. On my left, is Captain
Jesse H. Vasquez of the United States Navy, who is the Director
of the United States Naval Home in Gulfport; and on my right is
General James F. Hennessee, U.S. Army (Retired), who is the
Deputy Director of the United States Soldiers' and Airmen's
Home here in Washington, D.C.
General Donald C. Hilbert, U.S. Army (Retired), was unable
to be here today. He is the Director of the United States
Soldiers' and Airmen's Home, but because the hearing had to be
rescheduled, he was unable to be here. We are sorry about that.
Opening Statement
First of all, I cordially invite each member of the
committee to visit our homes to visualize the services and
needs of our residents. You gain a much better understanding of
our mission and the need for our existence when you have the
opportunity to chat with residents who survived the Bataan
Death March; experienced the Japanese attacks on Pearl Harbor,
Midway and Guadalcanal; liberated Nazi death camps; spent years
as U.S. prisoners of war in Japan, Germany, and Korea; flew
helicopter combat missions in Vietnam; served as renowned
Buffalo Soldiers; and served in all-black and Puerto Rican
infantry units during the World War II and Korea.
Our doors are always open to you. Please come and visit
with these heroic veterans. They are indeed living treasures of
this great Nation.
In order to support these distinguished veterans, we are
requesting a $60 million operations and maintenance budget for
fiscal year 2001. These funds will provide a continuum of care
to support 1,770 residents of which 280 are in long-term care.
Our capital outlay fund request for fiscal year 2001 is
$9.8 million, the bulk of which is for the third phase of
construction of the United States Naval Home's health care
facility. Construction begins in fiscal year 2001, and is
scheduled for completion in fiscal year 2003. The existing
long-term care unit was designed around 1970, and the assisted
living units were originally independent living units. Neither
setting meets current retirement home standards nor do they
meet standards for handicapped accessibility.
The fourth and final phase of the health care facility will
be a part of the capital request in the fiscal year 2002 budget
at a cost of $6.3 million. We appreciate your continued support
for this multiyear project. The remaining capital request this
year supports capital repairs and replacements at the U.S.
Soldiers and Airmen's Home.
EFFICIENCIES AND ECONOMIES
Members of the AFRH board, the homes, and the two local
oversight boards have sought out efficiencies and economies of
operation by internal analysis, outsourcing, and by
implementing sharing agreements. During the period of April
through October 1999, the AFRH underwent a joint inspection
spearheaded by the Department of the Army. It was the Army
Inspector General's conclusion that the AFRH provides excellent
residential, social, and health services to its residents who
are predominantly satisfied with the care they receive.
The AFRH is following up on the recommendations that result
from this inspection. Currently, we are in the process of
conducting a most efficient organization study that was
recommended by the inspection team. The scope of this study
includes reviewing processes and procedures, organization,
structure, and staffing of the entire Armed Forces Retirement
Home. The study is scheduled for completion in August of this
year.
The audit of the Armed Forces Retirement Home fiscal year
1997 financial statements was conducted by an outside firm,
Brown and Company. The home received a qualified opinion, which
is a notable accomplishment among Federal agencies. We are
currently working with the outside audit firm to review our
1999 fiscal year financial statement. This audit actually began
very recently.
ADDITIONAL REVENUES
As you know, a large portion of the income to our trust
fund is tied to the active duty force size, which has
significantly reduced in the last decade after the Cold War
ended. This, in turn, had decreased the revenue on our trust
fund. We must now realize some increase in income so that the
Armed Forces Retirement Home trust fund will not become
insolvent. If the trust fund does not receive positive
financial intervention, we project that the trust fund will
become insolvent in approximately 2006. In addition to the cost
efficiencies described above, the Armed Forces Retirement Home
is taking many steps to increase revenue.
We continue to seek additional venues of funding by methods
such as our recently created Armed Forces Retirement Home
Foundation. In March 2000, the AFRH Foundation obtained
eligibility to participate in the Combined Federal Campaign
nationwide for the year 2000.
We also anticipate that the retired military voluntary
allotment program that we have established will provide the
AFRH trust fund with a steady increase in contributions in the
upcoming future. Last year, we received approximately $141
thousand dollars from retired military members through the
voluntary allotment program.
As you know, we are seeking to generate income from our
excess 49 acres of land at the United States Soldiers' and
Airmen's Home. The AFRH has received an appraisal report from
the Millennium Corporation, which conducted the appraisal of
the land. The AFRH is currently studying the options for the
best and most economic disposition of this land by lease or
sale.
The AFRH is anxiously awaiting the decision of the
Department of Defense to implement the 1995 congressionally
authorized increase in active duty pay assessment from 50 cents
to $1. The increase in the deduction from 50 cents to $1 and
the lease or sale of the 49-acre parcel of land are critical to
the future financial health of the AFRH trust fund.
In closing, I again ask you to remember the distinguished
veterans who served our country well when we needed them
themost. It is now our duty and moral obligation to be there when they
need us the most.
Mr. Chairman, we will be happy to respond to your questions
and look forward to continued support from the committee.
Mr. Porter. Thank you Mr. Lacy.
[The information follows:]
Mr. Porter. General Hennessee, let me apologize. I could
have looked up and seen that you were not General Hilbert, but
I was reading off of the notes of my staff.
I have to say, Mr. Chairman, that Duncan Hunter, who is a
very good friend of all of ours, goes out to the home
frequently, as you probably realize, and keeps us posted on
what is happening there, and often tells us about the people
that you described in your opening statement that are residents
there.
And we keep up--I have not been out for some number of
years, but we keep up through Duncan as to what is happening,
and he helps us a great deal.
Let's talk for a minute about the augmentation of the 50-
cent increase in enlisted active duty pay deduction. Why has
that not been implemented by the DOD?
Mr. Lacy. Well, I can't really speak for DOD. We have been
requesting this since it was authorized in 1995. We currently
receive about $7 million a year from the 50 cents that we do
receive, so if we were to receive the increase, it would
generate an additional $7 million each year.
Mr. Porter. What is preventing us from receiving the
increase?
Mr. Lacy. DOD has indicated to us that they want this
increase to be a part of a total solution to the funding
issues. We believe that this increase, together with an
appropriate sale or lease of the 49 acres, those two things
together, would be able to generate a total solution for the
long-term viability.
Mr. Porter. Well, they have had 5 years to help you get to
a total solution here. Congress authorized it. It seems to me
that it is something they ought to implement and get on with
it. That would certainly get you a long way towards the total.
Mr. Lacy. We certainly agree. It is at a very high level
within DOD at this point. They have continued to indicate to us
that things are looking positive for this change, but we have
not yet seen the change occur.
Mr. Porter. Well, I think we ought to put a little pressure
on them to get this done. The chairman of our committee, of
course, was once chairman of the Defense Appropriations
Subcommittee and keeps an active interest there. I think maybe
Duke and I ought to talk to our chairman and see if we cannot
apply a little pressure to get this thing done. It would help
you a great deal.
Mr. Lacy. We would certainly appreciate that support.
Mr. Porter. Fifty cents a month, I think people can afford
that.
The status of the property, the 49 acres, at one time there
was--and I don't remember the details, but the Archdiocese of
Washington, I think, is the neighbor there, and they were going
to buy it, but haven't; or there was some agreement?
Mr. Lacy. There was legislation structured that would have
required us to sell it to that party. However, we were able to
obtain a change in the legislation. The National Defense
Authorization Act in 2000 does require us to sell or lease the
land by the end of this fiscal year at the highest and best
economic use. Catholic University in that legislation is given
the option of matching the highest bid for that land if they
choose to do so. And we are in the process of taking the steps
to implement that law right now.
Mr. Porter. Have there been any bids for the land, other
than their own?
Mr. Lacy. No, so far, we have sought the appraisal and that
is undergoing some final study by DOD, and then we will go out
for procurement. We are taking some initial steps. I think we
have done the request for proposals for title search and
environmental study and so forth. So we are getting everything
lined up to be able to go out to the marketplace.
Mr. Porter. If this is not a proper question, do not answer
it, but what do you think the appraised value of the land would
be?
Mr. Lacy. Well, we have been advised that we need to keep
that information closely held because it could affect the
market.
Mr. Porter. That is why I asked it that way. I assumed you
might not want to share that.
Mr. Lacy. Thank you.
Mr. Porter. The capital outlay account asked for a decrease
of nearly $3 million, and you alluded to this in your oral
testimony. Why is that a decrease? Have you met the needs of
the Naval Home?
Mr. Lacy. The primary reason is, we completed a significant
renovation of the Sheridan Dormitory at the Soldiers' and
Airmen's Home; that was a multiyear capital project.
Mr. Porter. All right. If you look down the line on
eligible retirees and possible future residents of the home,
what do you see?
Mr. Lacy. We believe that there are going to be
approximately 20 million potential eligibles. About 1.1 million
of those would be retirees; we expect that that number of
people will remain relatively stable.
There is a slight dip, I think, in the year 2015. But
basically, for the next 15 years, we expect the market to hold
steady at that kind of level.
Mr. Porter. And are people now being turned away or are you
able to accommodate all who seek to live in the homes?
Mr. Lacy. We are currently able to accommodate folks.We
developed a waiting list when we were undergoing some renovation at the
Soldiers' and Airmen's Home, and I would like to ask each of the homes
to briefly respond to that question as well.
BG Hennessee. Mr. Chairman, speaking for the Soldiers' and
Airmen's Home, we historically have had a population of
residents in the range of 1,900 to 2000. In this decade that
has declined. Part of that decline had to do with our own need
to renovate facilities from the multiperson rooms with
bathrooms down the hall into something that was in sync with
the modern standard. We have done that. In the process, for
almost 2 years, we had to virtually stop entry of eligible
persons in order not to have to displace those who were already
in the home.
During that period, we accumulated a large waiting list of
several hundred. I am happy to report that we have now reopened
the sheridan dormitory, that has a capacity of over 500, it's
renovation had caused the waiting list. And we are in the
process of, we believe, eliminating all or the vast majority of
our waiting list.
So we believe that, come mid-summer, we will have
essentially no waiting list, but still have a population
substantially below that which was historical.
Frankly, we believe there are many more out there who need
and want to come to the homes, but the adverse publicity that
has been associated with what you heard our Chairman relate
here today, the financial solvency issue, the homes having
enough money for the long-term, for the future, is frankly
causing many who call and inquire about coming to the home to
delay making that decision because, I think understandably,
very elderly people--our average resident's age is 76--at least
in their own minds are casting their final lot, and they do not
wish to cast it somewhere where they might be displaced in
their 80s or 90s.
We are confident that there will be a solution. We tell
these people that. But still and all, until they can read in
the public press that the future of the homes is not in
jeopardy, there will be some, perhaps many, who want and need
our services very badly, but choose not to come. We see that as
our major problem. I should think right now we may be reversing
that perception among elderly veterans that the homes are truly
here to stay and that they can count on us. And we thank you
for your support in helping, by your statement, to let people
know that you stand behind what we do for the long term.
Captain Vasquez. Mr. Chairman, on behalf of the United
States Naval Home, we are happy to report that we have no
waiting list. You would think that that is a good thing, but in
essence it is not; because I have a total of 601 units, and I
have 162 vacancies this morning. The reasons for those
vacancies are identical to the ones that General Hennessee has
just enumerated, and that is the adverse publicity on the
impending insolvency of the trust fund would make it a very
unwise thing for our senior citizens to make such a decision
and risk a second displacement.
Mr. Porter. How much money is in the trust fund?
BG Hennessee. At the end of the last fiscal year, there was
$102 million in the trust fund.
Mr. Porter. And how fast are we drawing that down?
Mr. Lacy. The deficits each year are running on average
about $8 million to $10 million, depending on the capital
needs.
Mr. Porter. My final question is, is the number that was
submitted in the President's budget the same as the number you
submitted to OMB?
Mr. Lacy. It is within $150 thousand dollars on the O&M
side. OMB has been supportive. They did ask us to juggle some
timing on capital, but which was not a problem for us.
Mr. Porter. Couldn't you ask us for the $8 to $10 million
from the appropriation and preserve the trust fund?
Mr. Lacy. We could certainly do that. We have not had
support in the past for that kind of appropriation.
Historically, the homes have been funded from this trust fund,
and a direct appropriation would certainly close that gap.
Mr. Porter. Well, where does the money from the trust fund
come in? I guess maybe I do not know the mechanism.
Mr. Lacy. It comes from a number of sources. It comes from
the 50 cents from the enlisted active duty service people per
month. It comes from the fines and forfeitures from all of the
services. It comes from fees that we charge the residents based
on a percentage of income. Those have been increased over the
past 3 years based on congressional authority to do that.
Currently those fees are 40 percent for people in
apartments and 65 percent for people in health care. And then,
of course, we earn income off the investment of our trust fund.
Mr. Porter. But the trust fund is kind of an invested
checking account, in a way, because you are drawing in your
revenues from there, except for the ones coming from Congress,
and you are paying out your expenses?
Mr. Lacy. And we are paying out, that is right, and we are
self-sufficient. We have not relied on taxpayer money. All the
resources come from that trust fund. The problem is, we have
this gap because the fines and forfeitures and the revenue from
the 50 cents has decreased as the forces have been downsized.
Mr. Porter. If the 50 cents were $1, where would the trust
fund be?
Mr. Lacy. That would resolve the deficit related to our
O&M. It would still leave us a couple of millions of dollars
short for the long term and for capital needs.
Mr. Porter. If you sold the 49 acres and put those funds
into the trust fund and, from that, earned income, where would
that leave you?
Mr. Lacy. We believe that the best option for us may
actually be to have a long-term lease and generate income from
the lease of that land; and we would hope to be able to
generate in the $2-to-4-million-a-year range.
Mr. Porter. Those two things would bring you fairly close?
Mr. Lacy. Exactly right. They would actually, for the most
part, resolve the problem for the long term for us.
Mr. Porter. Finally--and I know I am running over my time,
but the increase, as we compute it, is 2.3 percent. I suppose
if you backed out the capital expenditures, it would be higher
than that and, therefore, higher than inflation. It just seemed
to us, looking at the numbers, it is below the rate of
inflation, which is obviously pretty low.
Mr. Lacy. Well, we have held our expenses very tightly over
the past decade. We knew when the AFRH was created in the early
1990s, which brought the two homes together, that this funding
stream was going to be in jeopardy, so we havetaken steps over
the years. We are actually operating at 26 percent less FTEs than we
were in about 1991 or 1992.
Our O&M budgets basically ran flat in absolute dollars for
the past 5 years--in other words, losing against inflation.
This is one of the first years we have had a slight increase in
O&M in 5 or 6 years and that is primarily because of required
pay raises that the government has passed. And those have
doubled up on us, in effect, and that is what is causing part
of the problem.
Mr. Porter. Let's see if we can make the year 2000 the year
that you get over this. It sounds like you and your directors
are doing an excellent job of managing the funds that you have
and keeping the homes up to standard and providing the services
that you ought to be providing. We just have to get this
financial problem solved somehow.
Mr. Lacy. Any support you could provide us, we would
certainly appreciate it.
Mr. Porter. We will do our best.
Mr. Cunningham.
Mr. Cunningham [presiding]. Thank you, Mr. Chairman. And
you are absolutely right. One of your biggest supporters is
Duncan Hunter, my seatmate right there, from San Diego,
California. If any of that property takes out the golf course,
though, he may oppose that. He is a big golfer.
You know, in a very bipartisan way, we are going to take
care of some of the other needs for our veterans. In many
areas, in rural areas, TRICARE, other Band-Aids for veterans'
health care that have been promised, have not lived up to the
promise that we have offered for our veterans. And we are
losing veterans every single day, especially from World War II.
We will, this year, pass a bill that offers prescription
drugs to the most needy of our citizens. We will not do it like
the Democrats want to do and make all prescription drugs under
the government, because we have many systems out there where
people do not have those needs. They have insurance, they have
the wherewithal to afford those kinds of things. And we will
not have a big government subsidy or program that controls all
prescription drugs. I think that is good.
Secondly, we will have HMO reform; and again, we will not
do it like the Patients' Bill of Rights that the Democrats
want, because in that particular bill, it not only sues the
HMOs--and I think the HMO, if they are guilty of some
negligence, then they should be sued. But if you have an
unlimited amount that you can be sued for in damages,
compensatory damages, you can imagine what that will do to the
cost of health care, to you or anybody else, whether they are
military or civilian, that qualifies for that.
The second aspect we will not allow is that under the
Patients' Bill of Rights, you can not only sue the HMO, but if
you have a business or a home and you hire an HMO to give your
people health care, then the liberal trial lawyers will come
down and sue the business who, in good faith, hired those HMOs
for health care for their employees; and we are not going to
allow that.
But we are going to have an HMO reform bill this year. We
are going to provide prescription drugs for the needy.
I think the bipartisan support of FEHBP on the part of both
Republicans and Democrats, the same thing that a civilian gets,
sitting up here and working for this government, health care,
you when you retire in the military are not afforded that.
It is a pilot program right now. The White House kind of
threw some cold water on it by telling people, if you get on
this pilot program, you may not be able to get back on the
other system when you come back, and it has been very narrowly
confined, so that in my opinion, it has not had an opportunity
to flourish.
But we are going to do that, too; and I think that FEHBP,
to keep the promise to our veterans for health care, is going
to be a big support for the things that you are trying to do in
the home as well, stand down for the homeless and things like
that that have gone forward. And I like to think that in this
decade, one of the things that we are looking at in this
committee that the chairman champions is medical research. The
genomics program, in which they did not think it was going to
be until 2012 before they could map out what took Mother Nature
millions of years, looking at our gene sequences, to determine
what genes cause cancer, what genes cause diabetes, and those
kinds of things; and they are doing that right now. And Dr.
Varmus, who has left NIH, but Dr. Klausner with cancer and
every--stem cell research, which you can take a veteran that
has burns or that has been paralyzed, or their children that
have juvenile diabetes, and even inject cells into that child
that produce insulin so they do not have to get blood tests.
These are some of the things, not directly related with the
homes, but they affect them in a very positive way. And I am
excited this next year and this next couple of years as far as
what we are going to be able to do, not only for veterans but
for the population in general.
I think Chairman Porter asked about all the questions I
wanted to ask as far as infrastructure and so on, and
especially I was going to ask the question about the sale of
the property, and I think probably lease is better. You have an
ongoing revenue out there.
San Diego, where I reside, has a buffer between Los Angeles
and San Diego so that we do not become a multicity where you
just go from one city to another, like Los Angeles, and that is
called Camp Pendleton. If you look at Washington, D.C., and all
of the massive housing developments that we have, and it is
growing also like everywhere else in the country, we have a
small area that we have birds and we have squirrels and we have
foxes; and when you talk about the environment out there--as a
matter of fact, those squirrels, they come up and you cannot
swish them away. You have to take care of those little black
squirrels that go right up your leg if they are not careful.
BG Hennessee. Residents feed them, Mr. Cunningham.
Mr. Cunningham. I know, and they expect to be fed when you
are out there; and if you do not feed them, they get upset.
So I want to commend all of you for what you do. So many
times our veterans are left behind. I look at Ron Kovic and
``Born on the Fourth of July,'' how that was mistreated totally
when he came back from Vietnam and a lot of people chastise Ron
Kovic, but the liberals reached out to him and for the first
time someone said, hey, come in with us. And in that kind of a
situation, it should be our United States Government that
reaches out to those individuals and says, hey, come on. We
recognize what you did for your country and we are going to
support you; and many of us feel that way.
So I do not chastise Ron Kovic, I think he is a victim in
many different ways and was used in many different ways. But I
want to thank you for what you did. And anything else youwould
like to say? Because the chairman frankly covered the questions that I
was going to ask you. But thank you and God bless you for what you are
doing.
The committee will stand briefly in recess.
[Recess.]
[The following questions were submitted to be answered for
the record:]
Tuesday, March 28, 2000.
NATIONAL LABOR RELATIONS BOARD
WITNESSES
JOHN C. TRUESDALE, CHAIRMAN, NATIONAL LABOR RELATIONS BOARD
LEONARD PAGE, GENERAL COUNSEL
HARDING DARDEN, BUDGET OFFICER
Mr. Porter. The subcommittee will come to order. We
continue our hearings on the budget for fiscal year 2001 with
the National Labor Relations Board, and we are pleased to
welcome the chairman, John Truesdale, for the second year, and
the new General Counsel, Leonard Page for the first time. We
are also pleased to welcome, Harding Darden. Harding Darden is
the Budget Officer.
Mr. Truesdale.
Introduction of Witnesses
Mr. Truesdale. Thank you, Mr. Chairman. You have already
introduced our new General Counsel, Leonard Page and our Budget
Officer, Harding Darden, a man on whom I rely heavily, and we
have placed him here in the middle so he can most conveniently
be of help to me and Mr. Page.
Also I would like--as you know the NLRB, by practice, three
members of the President's party and two members not, and today
we have one of the Republican members of the Board with us, Mr.
Peter Hurtgen.
At the outset, I want to convey the agency's gratitude for
your fairness to the NLRB during your years as Chairman of this
subcommittee. Your dedication to our mission has been felt not
only by agency staff, but by the many stakeholders whom we
serve. And with the Chairman's permission, I will just give a
brief summary of my statement which is submitted for the
record.
Opening Statement
I appreciate this opportunity to appear before you once
again as Chairman of the National Labor Relations Board to
testify in support of the agency's budget request for fiscal
year 2001. The fiscal year 2001 budget before you request an
appropriation of $216,400,000 so the NLRB can fulfill its
responsibilities to protect the rights and enforce the
responsibilities of employees, employers and unions under the
National Labor Relations Act. This request will enable the
agency to administer and enforce the Act effectively and
efficiently by providing the necessary resources to, one,
diminish the current case backlog in the field and before the
five member Board; two, continue our information technology
program; three, better train our staff to ensure the consistent
and fair adjudication of cases.
In developing its strategic plan for fiscal year 2000-2006,
the NLRB revised its performance goals to focus on the two
functions fundamental to the agency mission; to resolve
questions concerning representation impartially and promptly;
and also to investigate, prosecute and remedy unfair labor
practice cases by employers or unions impartially and promptly.
To repeat what I told this committee last year, my sole
agenda as Chairman has been to intensify our efforts on the
primary function of the five-member Board which is getting
cases out, in particular, our oldest cases. I and my fellow
members of the Board have adhered to my pledge to this
committee last year to avoid political entanglements, to avoid
proposing or commenting on substantive legislation, and to
attack our oldest cases and reduce our pending caseload.
BOARD PERFORMANCE GOALS
My colleagues and I continue working hard to get the
Board's caseload down to a level that would befit an efficient
professional adjudicatory organization. With this in mind, the
Board has set ambitious case handling goals in both the fiscal
year 2000-2006 strategic plan, and the fiscal year 2001 annual
performance plan.
Last year our goal was to issue all representation cases
over 2 years old and all ULP cases over 3 years old. As
indicated in my statement for the record, we achieved nearly 90
percent of the goal. Our goal this year is to issue
representation cases more than 20 months old and unfair labor
practice cases over 30 months old. The Board's fiscal year 2001
performance measures will strive to issue all representation
cases that have been pending more than 18 months and all unfair
labor practice cases pending more than 24 months in fiscal year
2001.
We will continue to ratchet the goals down until there is
no case pending at the board more than 1 year by fiscal year
2006.
FISCAL YEAR 2001 REQUEST
The nature of the work of the NLRB is very labor intensive.
Therefore, most of the budget is dedicated to personnel costs,
77 percent, and rental payments to the General Services
Administration, 11 percent.
The fiscal year 2001 budget request of $216,400,000
represents a 5.2 percent increase over that of fiscal year
2000. The additional 10,700,000 we seek for fiscal year 2001
would cover mandatory adjustments in employee compensation,
complete the agency's information technology modernization
effort, support training in case handling and use of new
technology, and provide for an additional 55 FTE over the
fiscal year 2000 FTE level of 1,947 to help diminish the
current backlog in the field and headquarters.
Mr. Chairman, the critical role of the NLRB in contributing
to economic stability and facilitating the unimpeded flow of
commerce is the fundamental justification for the fiscal year
2001 request before your committee. In order for the Board to
permanently eliminate unwarranted delays and maintain
consistently low backlogs, it is clear that there must be
continued cooperation and consensus in the labor management
community and in Washington in support of maintaining a fully
staffed and funded Board to effectively protect employee and
employer rights and to promote the peaceful resolution of
disputes under the National Labor Relations Act.
The National Labor Relations Board respectfully requests
favorable consideration by the Congress to enable the agency to
effectively enforce the Act and protect the rights of all
parties covered by it. This concludes my statement. When the
General Counsel has completed his statement, my colleagues and
I welcome the opportunity to answer any questions you may have.
Mr. Porter. Thank you Mr. Truesdale.
[The prepared statement follows:]
Mr. Porter. Mr. Page.
Statement of the General Counsel
Mr. Page. Chairman Porter and members of the subcommittee,
you have my written statement for the record. I would like to
give you a brief oral summary.
Thank you for this opportunity to testify today regarding
the NLRB's funding request for fiscal year 2001. I have been
serving as the General Counsel since late last year under a
recess appointment. The President has nominated me to a 4-year
term. That nomination is pending before the Senate Committee on
Health, Education, Labor and Pensions. My service as General
Counsel is the capstone of a career in labor law and it is
truly an honor to have been chosen for this important position.
I will be brief because I know you are busy and because you
have the benefit of the wisdom and service of NLRB Chairman
John Truesdale, as well as our long time Budget Officer,
Harding Darden.
I came to the NLRB at an auspicious time, following a
number of years in which the most predictable thing about the
agency's funding was its unpredictability. We now seem to be on
a stable path. I can well understand the corrosive effect that
an uncertain budgetary picture has on an agency such as the
NLRB where relatively minor fluctuations in funding can have
profound implications for staffing levels, compensation, and
all aspects of operations.
Under this year's budget the agency has been able to embark
on a multiyear stabilization program by staffing up, conducting
extensive training and increasing investment in information
technology. The request for fiscal year 2001 is a modest 5.2
percent increase. This will enable the agency to meet mandatory
pay increases and other cost factors, and more importantly, to
continue its path to stability in staffing levels, training and
technology.
The Board Members and I recently had a retreat at which we
and our senior staff identified strategic goals for the next 5
years under the Government Performance and Results Act. We are
revising our strategic plan accordingly and will be submitting
it to Congress later this year. However, without stability and
predictability in our funding, this plan would not be worth the
paper it is written on. So again, I urge your favorable
consideration of this request.
Lastly, Chairman Porter, although I am a newcomer to those
proceedings I am well aware of the support that you have shown
the NLRB as Chairman of the subcommittee. I want to thank you
for that support and to wish you well in your future endeavors.
Again I thank the committee for this opportunity to appear
today, and we look forward to answering any questions you may
have.
Mr. Porter. Thank you, Mr. Chairman and General Counsel.
[The prepared statement follows:]
Professionalizing the NLRB
Mr. Porter. I think it has been particularly fortunate that
you've come out of retirement, Mr. Truesdale, to take over this
position. The perception for Mr. Page's background information,
the perception on this subcommittee and elsewhere in the
Congress was that each of your predecessors tended to
politicize this agency, and I think that led to the very
problem that you have referred to, Mr. Page, in your testimony
and that is the unpredictability of the funding levels as
people saw that as the--as not proper for an agency that
administers a law.
Now I think we are perceiving that you are
professionalizing the agency rather than politicizing the
agency, and I for one want to make sure that you have
predictable increases that allow you to do your work. We are a
Nation of laws, and if we don't have our adjudicatory agencies
able to do their work in time, then that breaks down our entire
system. So I am anxious to see the professionalism that both of
you bring to this task, the lack of politicalization that has
occurred, at least perceived to be occurring in the past, and
therefore we want very much to provide you the resources that
you need to do your work properly.
With that I am going to call on--I would tell my colleagues
from California and New York that Mr. Dickey was here at the
time the hearing started, although he had toleave and under our
rules he is called on first.
Mr. Dickey.
Mr. Dickey. I won't take that long. Mr. Chairman, and that
is unusual with this panel for me to say that I won't take that
long, but I want to go over this, Mr. Chairman.
Mr. Truesdale, I want to go over what I see as progress.
When I took a position on this committee, we were told at the
time that there were 32--an average of 32 section 10(j)
injunctions that were issued being issued every month. It was
onerous. It was putting people in court before they knew that
they had a problem. We took out after it, and we found a lot of
political arguments and maneuvers and I became very adamant
about it. But all the time I was being told by industry and
business we need this agency. And I said, well, we can't stop
in the middle of this, and we have to push forward.
I want to tell you that I sure appreciate what you've done.
Chairman Porter said it better than I, but it is a privilege to
see it come where it is supposed to be, where both sides will
acknowledge the need and both sides are appreciative of the
existence of an agency. Before you got here that was not the
case, and it was frankly embarrassing that we were using this
agency for those reasons. I think we are doing all right, and I
have one question about salting abuse, and let me see if I can
get that done.
SALTING ABUSES
There have been 8 hearings on salting abuses. Have you
reviewed the record of these proceedings? Do you know about
them?
Mr. Truesdale. Have I reviewed the congressional hearings?
Mr. Dickey. Right.
Mr. Truesdale. I have read of them. I have not had an
opportunity to read the transcripts.
Mr. Dickey. Among other abuses reported, several salts have
testified that unions have instructed their agents to lie,
sabotage and generally work to destroy nonunion companies whose
employees have no interest in the union. What steps are being
taken to combat this clear abuse of our Nation's labor laws?
SECTION 10(J) INJUNCTIONS
Mr. Truesdale. Congressman Dickey, before I answer that
question, just so I won't forget, I appreciate very much your
kind words. I do think there might be some disconnect between
your figures and ours. My understanding, although this largely
took place before I returned to the board, the high water mark
of section 10(j) injunctions was something like 104 for the
year. The figure you are referring to is 32 recommendations to
the General Counsel.
What happens is the regional directors make recommendations
to the General Counsel vis-a-vis 10(j)'s. The General Counsel
and his staff review them to determine whether in his opinion
that is a proper recommendation. They come then to the Board.
If he does not think section 10(j) is warranted, it is short-
stopped right there. But if the General Counsel thinks that it
is, it comes to the Board, and my understanding that the Board
authorized something like 104, but we would be glad to supply
that for the record.
Mr. Dickey. When things got better I asked about it and
they said it was down to 4 a month. That would be 48 a year.
The complaints have died down as far as my constituents and
their employers, and I think it is a credit to you all, and
there is not a corresponding harm is being done as a result of
being reasonable.
SALTING CASES
Mr. Truesdale. Getting back to your question about salting,
as Chairman Porter indicated before, which he referred to as
professionalizing the agency, we do think of ourselves as
something of a labor court. General Counsel is like the United
States attorney. We have a group of administrative law judges
who hear the cases, observe the witnesses, resolve the issues,
identify the legal precedent involved, and issue decisions
which can be appealed to the Board, and we, in that respect,
are like an appellate body. Our decisions can be appealed to
the circuit courts and to the real courts, so I don't have any
illusions of grandeur here.
All of that is background to say that there are cases in
the pipeline, which raise the kind of issues that you posed
just then, so I don't think it would be appropriate for me,
since we do have such cases in the pipeline and even I think
some at the Board which raise those issues, which I think
perhaps it wouldn't be appropriate for me to volunteer an
opinion.
Mr. Dickey. I withdraw the question, but you know what I
mean.
Mr. Truesdale. I do.
By the way, I am pleased that you were able to be here. You
said just before the hearing got underway that you wouldn't be
able to stay. I am glad you were able to stay.
Mr. Dickey. The beeper is going to get me in just a second,
but I am listening to what you all have to say.
Mr. Porter. Ms. Pelosi.
Ms. Pelosi. Thank you, Mr. Chairman. And Mr. Truesdale. It
is always a wonderful day when you are here because it is
always interesting to hear you. Mr. Darden, thank you for your
service to the NLRB as well.
I am a supporter of the NLRB. I think it is very important
for American business and American workers to have you function
in the best possible way and with the most certainty in your
funding stream, so that you remove all doubt what you are able
to do. I will get right to my questions.
INFORMATION TECHNOLOGY
Mr. Truesdale, how does your fiscal year 2001 budget plan
strengthen technology to manage cases?
Mr. Truesdale. The Case Activity Tracking System which is
attempting to move our database into the most current efficient
system that we can, has currently been deployed in 40 of our 51
field offices, and we have 33 regional offices, and then
several subregional or resident offices. It has been deployed
in 40 of those 51 field offices, and we expect that that will
be completed by the end of fiscal year 2000 and that it will
have been completed in headquarters in early 2001.
There are a number of technical aspects of our information
technology program, which I could either supply for the record
or turn to General Counsel Page, because it mainly involves
information under his supervision.
Ms. Pelosi. As you wish.
Mr. Page. I can tell you we are spending about 6 percent of
our budget on information technology, and I believe that is
consistent with most government agencies. But we are about
halfway through a 3-year program to bring our systems up to
date. We had the 4 or 5 lean years of budgets and, no surprise,
information technology went by-the-by, largely.
In addition to the CATS system which we hope to have up and
running at the end of the year, we are developing an internal
intranet so we can connect our 50-some offices with Washington
and assist our field attorneys in doing research and getting
information.
AGENCY WEB SITE
Part of our continuing expenditures on information
technology also go to our Web site, which is highly regarded
among practitioners. In fact, we are getting about 1 million
hits a month which is really surprising. NLRB.gov is the Web
site. It is very user friendly. It is set up very well so John
Q. Public can get information about the agency and as I have
said, we have had very good reports from union and management
attorneys in the field that it is a very helpful Web site. That
is part of what we are spending our money on. And of course,
any time you have a national network like this, we have to
spend a little money on security. At any given time we are
upgrading or replacing about 25 percent on an annual basis of
the actual hardware itself, the servers, the computer
equipment, but we can give you a more detailed written report.
We are getting there on information technology and with another
good budget we will--I hate to use the word, but we will be in
the millennium.
Mr. Truesdale. I will add to that. While it is very
difficult to quantify, understand that some of these
initiatives might possibly be translated into, say, perhaps 10
FTE that we do not need because of people can get information
they need in the kinds of ways that General Counsel Page has
mentioned.
Ms. Pelosi. Doesn't it generate some work when you have all
of those hits?
INFORMATION OFFICER PROGRAM
Mr. Truesdale. I think mainly through the information
officer program, for example, instead of people filing charges
with us, we are able to point them in the direction that they
ought to go. That is not our bailiwick. We would say that
belongs to Wage and Hour or EEOC or State labor boards or what
have you.
Ms. Pelosi. Interesting.
Mr. Page. You can't file charges or petitions through the
Internet yet for many reasons. But on the information officer
we get about 173,000 contacts a year. We are talking about
people either calling or walking into an NLRB office, and we
only internally convert that into a case in, I think it is 6
percent.
Ms. Pelosi. Is that so?
Mr. Page. The rest are referrals to other agencies or just
advising the individual that their complaint is simply not
within NLRB's jurisdiction. But we do get a lot of public
contact through the information officer approach.
DISPOSITION OF OLDEST BOARD CASES
Ms. Pelosi. Mr. Truesdale, could you just go into a little
more detail about the success the board has had in getting
cases out this year?
Mr. Truesdale. Well, as I indicated in my opening
statement, we concentrated very hard last year on getting our
oldest cases out. The goal last year, and I almost hate to say
this because it is such a grim goal, but nevertheless, it is
the facts that we were faced with, but our goal last year was
to get out any unfair labor perhaps older than 3 years and any
election case or representation case that was more than--I
think it was 24 months. And we managed to reach that goal in
about 90 percent--we managed to reach about 90 percent of our
goal.
The reason those cases were so old was because of Board
member vacancies and turnover. It is very difficult without
taking up the committee's time and going into the problems that
that creates. It tends to send cases back to square one and
creates chaos in the Board's decisional process. Our high
watermark in our pending caseload was in February of 1999,
which was 733 cases.
Ms. Pelosi. What was it at the end of the year?
Mr. Truesdale. On March 1 of this year it was 683.
Now, the reason it didn't go down further than that when we
knew there would be a price to pay by concentrating on our
oldest cases, these cases were old, not only because of the
problems of turnover and vacancies, but also because they were
the most difficult cases. They had resisted the efforts of
prior Boards and prior Board members to get those cases out. We
concentrated on those. We thought we would be doing the
greatest service by getting those cases out. We did, however,
manage to reduce our overall caseload by 7 percent. Once we get
more current in our caseload we will be able to do better in
that respect.
Ms. Pelosi. Thank you very much, Chairman Truesdale.
Mr. Porter. Mrs. Lowey.
AGENCY STAFFING
Mrs. Lowey. Well, Mr. Truesdale, Mr. Page and Mr. Darden.
Thank you for your important work. Following up on the caseload
that was not addressed, your testimony speaks to a continuing
problem in NLRB regarding staffing, and my understanding is you
had 2,085 positions at the conclusion of the Clinton
administration, and because NLRB was targeted for cuts this
year, you will have only 2,002 positions, and that is up
significantly from previous years.
Last year we gave you a significant increase to add staff
given some very important steps in organizing the agency, could
you testify, could you give us a better handle on what
additional staff you would need in order to meet your goals in
closing these cases?
Mr. Truesdale. Our target, our goal, with the money that
Congress gave us for this year is to reach an FTE of 1,947 by
the end of this fiscal year. We currently, as of today, have
about 1,830 FTE. Hiring people is not something we can snap our
fingers and they appear. We got our budget from Congress at the
end of November this year. We embarked on hiring. Of course
that is in the middle of the law school year. There are a
number of technical problems in authorizing for 1,947 FTE by
the end of fiscal year 2000. Our goal by the end of fiscal year
2001 is--2,002 FTE by the end of fiscal year 2001. That is 55
additional FTE that we are seeking in this budget that we are
presenting to you today. So we are moving towards that figure
in making progress with the money that Congress has given us.
Mrs. Lowey. You said that you are moving toward the 2,002
figure?
Mr. Truesdale. Right. First that 2,002 is for fiscal year
2001. That is the next year.
Mrs. Lowey. Right.
Mr. Truesdale. This year the funds that Congress has given
us is to hire up to 1,947, and that is the figure that we are
en route to as of now.
Mrs. Lowey. Is the 2,002 figure adequate to address your
goals?
Mr. Truesdale. We believe that it is.
FILING CHARGES ON THE INTERNET
Mrs. Lowey. In another area, you have been handling cases
that are getting weightier in terms of the paper that is filed.
Can we do anything besides provide resources for staff to
lessen your load? Is the weight of the material that is
submitted to you adequate? I was particularly interested in Mr.
Page's comments that you can't file charges yet on the
Internet. I would be interested in both. Is all of this
paperwork absolutely essential, and are you movingtowards a
time when you can possibly file charges on the Internet?
Mr. Truesdale. I am going to leave that last question to
General Counsel Page, but the weighty cases that we are talking
about isn't really a problem of pieces of paper like charges,
it is a problem of the records that are developed in the
litigation of cases. Of course the parties are the ones that
develop those records under the eye of the administrative law
judge, but I think perhaps the cases are more difficult,
perhaps they are more keenly challenged, however we might put
that.
But filing charges over the Internet is not going to
resolve that problem. It just may make it easier for someone to
file a charge, but today they can mail it in. It is a piece of
paper. It doesn't contribute to the weightiness of cases.
Mr. Page. If I may add to that, our real workload is case-
driven, or in many cases, the number of election petitions that
are filed and from all indications we still anticipate a volume
of about 6,000 petitions for elections per year in fiscal year
2002, and about 30,000 unfair labor practice charges.
Obviously, if we have an adequate staff that is the best
way we can deal with our backlogs and develop a current
inventory on the processing of cases and deciding them at the
Board level.
Internet charges could be a problem. As I indicated,
information officers receive about 173,000 contacts from John
Q. Public. And only about 6 percent of those are actually
translated into some sort of agency action. Our statute only
protects individual employees who are engaged in protected
concerted activity. Many members of the public believe that we
are some sort of a just-cause agency when it comes to
employment discipline and discharge. So we have to disabuse
them of that concept. In addition, a lot of the members of the
public think we are the one agency that deals with all labor
matters, whether it is a Fair Labor Standards Act or Social
Security concerns, so a lot of what we do are referrals to
other agencies.
I think we would have to be very, very careful before we
think about filing charges through the Internet. We might get a
lot more paper than we--or at least electronic transmissions
than we can possibly deal with.
CASE INTAKE PATTERNS
Mrs. Lowey. With regard to the 30,000 unfair labor charges
that you do get, I am assuming that is yearly; is that correct?
Mr. Page. Yes.
Mrs. Lowey. I would be interested in the pattern. Are they
from a particular part of the country? Are there particular
industries? Could you discuss an analysis of those charges?
Mr. Page. Well, a lot of the charges are of course
surrounding election campaigns or petitions. Of course we are
driven by what unions are doing in this area and we are looking
at this constantly, and we are shifting resources between
regions to accommodate that. We have, at the moment, 33
regions. We are downgrading Peoria, recently announced, so we
will have 32 regions and that is just an indication of how we
are reacting to some of these shifting patterns.
But in addition, we will also get charges where unions and
employers are not able to resolve their contract disputes and
there are strikes and lockouts. That is the other opportunity
where we get some business.
Mrs. Lowey. I am not worried about you getting adequate
business. But I wonder if there are 30,000 cases a year, are
there patterns? Are they coming from particular unions,
particular parts of the country, and my next question and
following up is going to be are there actions or is this your--
maybe it is not your role that you would take to head it off,
or is your responsibility just to react once the case is
abroad?
Mr. Page. When a petition is filed, we have to react.
Mrs. Lowey. I know that. Are there patterns, do you see
repeated actions in a particular part of the country or with
particular unions or management?
Mr. Truesdale. We can supply for the record because it is
in our annual reports where these charges are filed by State.
We do have those records by State. I don't believe that they
will show any particular pattern. Although a particular State
may be more industrialized than another rural State and have a
greater incidence of cases. But other than that, I don't think
that there would be any particular pattern, but we can supply
for the record, I believe we can supply--I know we can supply
by State and I also believe that we can supply how they are
filed by industry, manufacturing and so forth. We will be glad
to supply that for the record.
[The information follows: FY 1999 data not yet available.]
Mr. Truesdale. But as for your question, can we head it
off, no. We don't have the authority. If an unfair labor
practice was something you could see taking place across the
street, we can't go over there and stop it. We approach totally
according to who comes to us and files a charge, who comes to
us and files an unfair labor practice, so it would be beyond
our authority to go out. We can't, for example, go to a plant
and have some kind of an educational mediation program. That
would get us into almost instant trouble, I think.
Mrs. Lowey. Thank you.
ENFORCING THE RULE OF LAW
Mr. Porter. Thank you, Mrs. Lowey.
Well, whether you are called an adjudicatory body or a
judicial body or a quasi-judicial body, you are part of arule
of law. You are what takes violence off the streets and political
influence out of the equation and sets objective standards to judge
actions by, and you are an important part of our judicial system in
adjudicating, in the first instance, a lot of disputes that would end
up exactly in those areas and did end up in those areas. We respect
that and we want to encourage you.
I would say right now there is something that may be
happening regarding the rule of law that all of us ought to be
concerned about. It has nothing to do with you, but out there
there is a little boy, Elian Gonzalez, who has been adjudicated
by the court to be returned to his father in Cuba, and whether
you agree with that decision or not, it is going to be a
decision of a court, and there is going to be a request on the
community to deliver him according to that decision or to
appeal the decision.
It seems to me very important to this country that we send
messages to the community that the court's order has to be
obeyed. I have already sent a message to our two--there is
actually more--representatives in Congress that represent areas
in Florida that are highly populated by the Cuban American
community that this is very, very important that we observe the
law.
I think this country sort of sets the standard for the rest
of the world, and if we don't live according to law, many
others won't and many others don't and we are trying to get
them to move in our direction and protect basic human rights
and one of which is to organize and collectively bargain and
exist in a free labor and free society. I have some questions
about workload.
CASE INTAKE PROJECTION
According to your budget justification, 33,000 unfair labor
practices were filed with the NLRB in 1999, an increase from
fiscal year 1998. For fiscal year 2000 and fiscal year 2001,
you are projecting 36,000, which is a 9 percent increase. Am I
correct so far?
Mr. Truesdale. I thought we were projecting a stable intake
of cases.
Mr. Page. I thought that was 30,000 charges and 6,000
election petitions for 36,000 cases.
Mr. Porter. All right. So the number of unfair labor
practices would be going down?
Mr. Page. I think it is about level.
Mr. Porter. Is the 33,000 ULPs for 1999 correct?
Mr. Page. No. It is 27,000.
Mr. Porter. 27,000 charges. And you are projecting it going
to 30,000?
Mr. Page. About 30,000. Again, we view it as almost level
with the last several years. It has been hovering in that
range.
Mr. Porter. So it is more or less level?
Mr. Page. Right.
FIELD RESTRUCTURING
Mr. Porter. Then that question doesn't apply.
Your budget justification notes that in November, you
announced restructuring initiatives affecting six field office
locations. What efficiencies do you expect from this
initiative, how will it enable you to reduce your backlog of
cases and where are the six affected offices located? Will any
of them be closed?
Mr. Page. Let's start first with the Peoria region which is
being downgraded. What will happen there is the senior regional
director and the assistant director and the regional attorney,
those positions will be filled out of St. Louis, an adjoining
region, but the office physically will stay there. What we
obtain by downgrading that office is, of course, relief in the
annual salaries of the higher executives at that office, and
perhaps some efficiencies by simply having a somewhat smaller
office in Peoria. But the Peoria region or the office will
still be there to deal with the public in that area, receive
charges and petitions.
Mr. Porter. Why are you downgrading the office?
Mr. Page. Primarily caseload. Let me--since I know from
personal experience, the Caterpillar cases gave that office a
lot of work for a number of years, and now that that dispute
has settled, it just didn't seem to us that they had an
adequate caseload to justify being a full flown region.
Mr. Porter. In each of these office restructurings, you
have made the same kinds of decisions?
Mr. Page. My predecessor established a restructuring
committee that looked at a number of our smaller offices and
considered several other locations for possible restructuring.
But late last fall, we recommended that Peoria is the one that
should be downgraded. The other particular offices we saw some
justification for keeping them at their level.
Mr. Porter. Again, I have some other questions for the
record, and many of the questions were already asked. But
again, we are very encouraged by the professionalization of
this office. We do want to provide the kinds of resources that
you need to do your work effectively and efficiently and
prepare for the future, in other words, the technologies that
you need to do it even better and we appreciate the fine job
that you are doing.
Mr. Truesdale. Let me say again how much we have
appreciated the support and assistance you have given to us
during the years, and I would like to echo what General Counsel
Page said, all best wishes to you in the years to come.
Mr. Porter. Thank you so much. The subcommittee will stand
in recess until 10:00 a.m. tomorrow.
[The following questions were submitted to be answered for
the record:]
Thursday, April 13, 2000.
SOCIAL SECURITY ADMINISTRATION
WITNESS
KENNETH S. APFEL, COMMISSIONER OF SOCIAL SECURITY
Introduction of Witnesses
Mr. Porter. The subcommittee will come to order. We are
continuing our hearings on the independent agencies before the
subcommittee with this morning the Social Security agency. We
are delighted to welcome Commissioner Kenneth Apfel, and, Mr.
Commissioner, you do a marvelous job there. You have done a
marvelous job in every assignment you have had in the
government, and it has been for us a real pleasure to have
worked with you and your people during the time that I have
been Chairman and you have been Commissioner. So we are happy
to see you today.
Opening Statement
Mr. Apfel. Thank you, Mr. Chairman. It is an honor to be
before the committee and an honor to see my colleague Tony
McCann sitting next to you. I also hold him in very high
regard, as I do you, Mr. Chairman.
I am pleased to be here today to present the President's
fiscal year 2001 appropriation requests for the Social Security
Administration (SSA). Accompanying me is Yvette Jackson, Deputy
Commissioner for Finance, Assessment, and Management.
This budget is about providing financial security for older
Americans and for American families after the death or
disability of a wage earner. More than 90 percent of our total
FY 2001 budget of $461 billion is permanently appropriated and
will be paid in monthly benefit payments to 45 million Social
Security beneficiaries.
But our annual budget request is also about providing
quality service each and every workday to millions of claimants
and beneficiaries. The budget requests before you today cover
our program administration costs and our general fund-financed
programs.
This year's funding requests are especially vital because
we are now preparing for a rapid and unprecedented increase in
agency workloads. The baby boomer generation is aging, with
many of these 76 million men and women now in their late
forties and early fifties. We estimate that new retirement and
disability benefit claims will increase by 23 percent over the
next 10 years, or roughly double the level of increase in the
past decade. SSA is working hard to prepare for these coming
challenges.
Let me briefly outline three areas of emphasis in the
administrative budget request now before you: efforts to
strengthen our strategic management, ensure program integrity,
and continue to make improvements in our solid and reliable
public service delivery.
I believe that we can influence the direction of change
only if we have a long-term vision of where we want to go. The
anticipated workload increases, together with future customer
expectations, rapid change in information technology, the
retirement wave facing our agency's own workforce, and an era
of limited government resources, create a compelling need to
develop an organizational ``vision'' that looks beyond our
current 5-year planning horizon. I have, therefore, created a
``2010 Vision'' initiative that will outline our view of
service in the future--what work we will do in 2010, and how we
will do it. This 2010 Vision will describe how SSA should
respond to trends in our external environment, such as
increased information technology. And the 2010 Vision
initiative will shape SSA's Strategic Plan, and drive all of
our budgeting and performance planning.
The second area that I would bring to your attention is
SSA's program integrity efforts. The public rightfully expects
us to be vigilant stewards of its tax dollars. SSA understands
this obligation. We have a zero tolerance policy toward fraud
and abuse. Over the last 4 years we have doubled the
investigative staff of our Office of the Inspector General
(OIG). The FY 2001 budget supports further anti-fraud efforts
by OIG, and by our field offices across the country. We have
specific and strong initiatives to prevent overpayments in the
Supplemental Security Income (SSI) program, safeguard the
integrity of our disability programs, and improve agency debt
collection practices. I would point out that about 10,000
workyears are now dedicated to continuing disability reviews
(CDRs) and redeterminations of SSI income. This represents
about a doubling of staff resources over the past few years.
A third area of emphasis is our efforts to maintain and
improve service delivery. For several years, in response to a
request from this subcommittee, SSA's annual budget has
included specific workload and performance commitments
commensurate with the funding levels requested. In FY 1999 we
met or exceeded our commitments for 800-number service and for
periodic CDRs and SSI redeterminations processed. But, as I
indicated in the FY 2000 SSA operating plan, some workload
processing goals have now been reduced from levels in the FY
2000 budget plan, including service goals for the 800-number
and processing goals for disability claims, hearings, and SSI
redeterminations.
The challenge of maintaining service levels and striving
to meet expectations in a time of growing workloads is creating
very real stresses and strains on our organization. The
President's budget request now before you will allow us to
ameliorate the situation through several initiatives. For
example, the President's budget request will support
technological enhancements to maintain telephone service
performance at the FY 2000 levels, increase benefits paid
through direct deposit, and expand electronic service delivery.
As of this month, in fact, our electronic services included an
on-line retirement planner that allows individuals to
interactively compute estimates of their future Social Security
retirement benefits.
The President's administrative budget request for SSA is
$7.134 billion. Reductions to this request may lead to lower
levels of service than are now provided. That service includes
answering 57 million calls to our 800-number with a 92 percent
5-minute access rate, completing more than 2 million SSI non-
disability eligibility redeterminations, and processing more
than 2 million disability claims and holding about 580,000
hearings.
This budget request is fiscally prudent and supports our
continuing efforts to provide the best public service possible,
by what I honestly consider the most dedicated workforce in
government.
Let me also note that, as requested by this Committee, I am
providing information on the Commissioner's FY 2001 budget
prepared last fall, as required by law. In this budget, I
requested $7.356 billion for SSA's FY 2001 LAE account. This
requested level of funding would allow for a moderate increase
in staffing to handle increased workloads and improve service.
And my budget request would intensify our efforts to prepare
for the agency's own anticipated retirement wave by bringing on
new staff that could be mentored by experienced employees.
Before closing, let me voice my very strong support for the
President's $35 million FY 2000 supplemental appropriation
request for SSA. This request will fund one-time costs for
implementation of the historic legislation signed by the
President on April 7 eliminating the retirement earnings
testfor retirees who are at or above the normal retirement age.
Mr. Chairman, I again want to thank you for this
opportunity to present SSA's budget request to this Committee.
With your approval, I will submit for the record full written
testimony discussing the appropriation request in greater
detail, and I will be happy to answer any questions you may
have.
But before closing, Mr. Chairman, I wanted to indicate
that, as you pointed out, this is probably my last time
appearing before you in your role as Chairman of this
Committee. I must tell you that the commitment to this agency
that we have had from you as Chairman has been very, very
strong and has been noticed. Your commitment to push us as you
have on Porter commitments, and establishing formal mechanisms
to be able to measure our performance and benchmark that
performance against what we actually do, has improved the
agency and how it works. When I am gone, when you are gone,
when your staff is gone, I believe these will be legacies that
will be part of our future, and will help us as an agency serve
the American public in a much better way. So, I regret seeing
you leave as our Chairman and all I can say is it has been a
real honor working with you over this time.
Mr. Porter. Thank you for those very generous comments.
[The information follows:]
Mr. Porter. I am going to have to call a recess for this
vote. Hopefully I will bring back some other members of the
subcommittee with me, and we will have some very tough
questions for you. Stand in recess briefly.
[Recess.]
RETIREMENT BENEFITS
Mr. Porter. The subcommittee will come to order.
Mr. Commissioner, we get the National Institutes of Health
here, and the Directors all come to testify, and I get to get
free medical advice from them, but now I am about to turn 65,
and it just occurred to me that since we have passed this
repeal of the offset for earnings after 65 and before 70, that
I might be able to be able to draw Social Security beginning in
a few weeks. Is that true?
Mr. Apfel. That is true. You could start whenever you
wanted to at age 65, if you wanted to.
Mr. Porter. Something is wrong with this. What am I
supposed to do a few months prior to reaching 65, notify the
nearest Social Security office that I am about to reach that
pinnacle?
Mr. Apfel. You will also be getting a letter from SSA
indicating there have been changes to the retirement earnings
test and to call us if you want to claim benefits. And you can
also get an assessment as to what your benefits would be now,
starting at age 65. Your work will not reduce your Social
Security benefit.
Now, given your years of Federal service, there is an
offset for part of your Social Security because of the civil
service pension that you have accrued and that you will start
collecting when you retire. So that will have to be taken into
account to determine exactly what the right dollar amount is.
Mr. Porter. But there is no offset while I am still working
and not drawing a pension.
Mr. Apfel. That is correct, there is no offset while you
are still working. To help clarify this, if you decided, Mr.
Chairman, not to claim benefits until you were, say, 70, your
Social Security benefit would be a lot larger than it would be
if you started before age 70. This is called the delayed
retirement credit. If you don't collect benefits early, you, at
your age, would receive about a 6 percent increase each year
that you delay your retirement benefits until age 70. For many
people that is still a good enough reason not to claim benefits
early, and it really depends on every person's individual
circumstances. The delayed retirement credit will be going up
from 6 percent a year within the next roughly decade to 8
percent a year. At that point in time, unless someone expects a
fairly short life expectancy, receiving the delayed benefit may
very well be to their best advantage.
I can't comment about whether you should in your own
personal circumstance, claim benefits starting at age 65. But,
you can get that information from any local SSA office and
determine what your civil service and Social Security benefits
will be. Both will continue, if you want to collect both, if
you continue to work after age 65.
Mr. Porter. Sounds to me like I shouldn't. At least if I
have some kind of life expectancy, it sounds like--you are
telling me it would be 30 percent higher if I waited until age
70, or roughly.
Mr. Apfel. I would not in a public hearing give you that
kind of public advice, but we could talk about it right
afterwards if you wanted.
Mr. Porter. We have one of your offices right here in the
building, and they tell us anything we need to know. They are
very good at that. I thought I would ask.
Mr. Apfel. I am very pleased to hear they are very good at
responding to your questions. We try to do that all around the
country.
MEASURING PERFORMANCE
Mr. Porter. Mr. Commissioner, again, you have focused in
your testimony upon performance measures and your willingness
to work with the subcommittee to help fashion them, and I know
that the goals are often difficult for the agency to reach. Yet
over the years technology and changes in business practices may
have made some of the standards we set several years ago
outdated. For example, one of the standards for800-number
service is percentage of callers who successfully access the 800-number
within 5 minutes of their first call. In this day and age, I would
think that time to access the 800-number would be measured in maybe
seconds rather than minutes. Have you done anything--for each of these
standards--telephone waiting time, on-time appointments, disability
claim processing and so on. Do you have a specific company or
organization that is world class and uses these standards, what is
world-class for these functions today? Have you measured that?
Mr. Apfel. There is a series of different performance
measures that you have indicated. There is no one single
standard for disability processing or even for 800-number
service, but there are a number of private sector entities that
have different standards, and we have had conversations with a
number of them. Indeed, this summer we are holding a conference
with the private sector to discuss how we have measured our
customer input and how we could improve those measures using
some private sector examples. This is one of our steps to try
to improve how we measure customer service.
How do we determine these world-class standards? Part of it
is really directly related to the Porter commitments. We
receive customer input, but it has to be balanced against our
resources to be able to assess what is practicable to establish
as a standard. Over time, we look internally within the
organization. We have improved our standards over time. If we
look at the hearings process improvement plan we have tried to
improve processing times of appeals in disability claims, and
we are also looking at the 800-number as well as other areas to
improve.
I point out the 800-number because I think it is a very
telling example of what is good quality service. When we were
surveyed by Dalbar a number of years ago, we were rated as one
of the very best in the world at that point in time. It wasn't
just access that they looked at. They also looked at quality of
information. We didn't rate as highly on access as we did on
what we did when people got through. We were very, very good
about the quality of product that we provided when an
individual got through. So our access was somewhat lower. It
has improved considerably since the time of the Dalbar study on
access. But you also have to be able to measure what happens
when someone gets through.
Let me give you three numbers which I think are important.
An individual calls our 800-number and gets through, and we
handle that individual in that first call. We complete their
business. Satisfaction rates are 98 percent. If somebody can't
get through to our 800-number and, once they do, we can't
handle their concern on that call, their satisfaction rates are
47 percent. Now, here's the third number. If someone has
trouble getting through but, finally does get through, and we
handle their problem in that very first call, their
satisfaction rates are 85 percent. So, clearly just focusing on
the length of time would be a mistake, and having all of our
emphasis on reducing or improving the 95 and 5 or improving
busy rates is one variable, but it needs to be only one
variable.
It is very clear that the public, from our surveys, wants
to know how quickly it can access us. But once you get in, can
we deliver? By and large we do, but we need to measure all of
those things so that we can provide a very high-quality product
to the public.
Mr. Porter. I don't see them as alternatives. You want to
do both because 98 percent is pretty darn terrific.
PEW SURVEY
Mr. Apfel. It is remarkable. Today in the paper was a new
Pew survey that just came out on customer satisfaction. I
looked at it thinking, okay, I am going to have a hearing
before Mr. Porter today. I better read this article very
carefully. And it is pretty clear that the Pew survey showed
some very solid numbers: for our beneficiaries about an 82
percent customer satisfaction standard; for the payroll
offices, the businesses that deal with us, 77 percent
satisfaction; less with the tax-paying public, 57 percent. Now,
they have less contact with us, but really we need to think
about that. Our customers aren't just our beneficiaries. Our
customers aren't just the payroll offices that are providing
receipts for the system. It is also the American public, the
tax-paying public. They are our customers as well.
This is one of the reasons why our Social Security
Statement, I think, is so important for the American public. We
are mailing 125 million this year to say here is what Social
Security is, here is roughly what you are going to get out of
the system, and here are the challenges that it faces. We've
received a very positive response. What we have got to do is
build up customer satisfaction. Our customers are not only the
payroll offices. They are not only the beneficiaries, but it is
also the tax-paying public. So we have got to do all three of
those, and they all looked pretty good in that survey today.
Mr. Porter. I like the way you think. I think you are
exactly right.
Ms. DeLauro.
TAKING ADMINISTRATIVE BUDGET OUTSIDE THE CAPS AND OFF-BUDGET
Ms. DeLauro. Thank you very much, Mr. Chairman.
Mr. Commissioner, thank you. Good to see you this morning.
Sorry I was late.
There has been some discussion lately of taking the Social
Security administrative expenses outside of the caps and off-
budget. Let me just get your sense of that, what you think
about that, and how would you see something like that working?
Mr. Apfel. Ms. DeLauro, there are a couple of different
issues here. One is whether Social Security administrative
costs are considered on-budget or off-budget. The second issue
is whether they are inside or outside of the caps.
Now, the new budget resolutions call administrative
expenses that are directly related to Social Security, off-
budget. I think this is a good change. The Administration
supports it.
The second issue is whether the administrative costs should
be outside of the caps that you deal with on a yearly basis.
The Administration has not taken a position formally for or
against this, but, I can tell you as Commissioner, I support
the notion of taking Social Security administrative costs
outside of the caps. I think the pressures that we are under
are going to be very, very real in the future. At least half of
our financing comes through the payroll tax, and I believe that
we are going to be under pressure as future waves of retirees
come in. Taking SSA's administrative costs outside the caps
will provide both relief to this Committee--the committee
wouldstill be responsible for determining our funding level--but if SSA
were outside of the caps, it would relieve some of the pressures for us
in terms of providing quality service to the American public. So I
personally support the notion of taking SSA outside of the caps.
ACCOUNTABILITY FOR FUNDING OUTSIDE THE CAPS
Ms. DeLauro. What do you do with that in terms of--is that
then emergency spending? What is the methodology of
accountability?
Mr. Apfel. The accountability, I believe, would still come
through the Appropriations Committee to determine on an annual
basis what our administrative costs should be. Being outside of
the cap would enable the Committee to take a more clear picture
of that. Given the fact that half of SSA's administrative
resources are coming from the payroll tax to fund our
organization, it seems to be legitimate. There is an analogy
here to some extent to HCFA and to the unemployment insurance
areas as well.
Again, I want to reiterate for the record, the
administration has taken no position here, but I must say as
Commissioner I support the idea because we are under enormous
funding restraints. We lost some resources again last year in
the budget. We face enormous challenges in the future. And it
is very hard to compete against the Head Start program and NIH,
as we do currently.
IMPACT OF PROPOSED SOCIAL SECURITY PROGRAM CHANGES ON WOMEN
Ms. DeLauro. My concern is how do you build in the
monitoring or accountability if it is just then--we just--it
doesn't fall into any structure. But you made your point about
the Appropriations Committee and where then one can have some
ability to say things or--this is meeting the goal or we are
looking at exploding costs, and then no way to deal with that.
But thank you for your comments.
Let me just say it this way. Have you conducted an analysis
of the impact that proposed changes to the Social Security
System could have on women? And if you can discuss briefly the
implications and then give us a more detailed analysis for the
record.
The reason why I ask this is I find I spend a lot of time
just, you know, in the district, the way other Members do, in
talking to all kinds of groups. I just find that there is a
real lack of understanding in the public about women and Social
Security and what changes to Social Security can mean for
women. And I do the best I can in trying to get around and talk
about these things, but I think we need to engage in a public
education on the issue, especially when you are dealing with
pay inequity for women and what that translates to in later
years with regard to Social Security and with regard to
pensions and everything else, and how, in fact, while there
might be difficulties at the moment, and I have been in groups
with younger women, older women who complain about it, but they
have no idea what can befall them if some of the changes that
are being discussed were made to the Social Security System. So
let me ask you to comment.
Mr. Apfel. I think this is a critical issue and we are
doing everything we can to educate the public. Indeed, Barbara
Kennelly, our Associate Commissioner for Retirement Policy----
Ms. DeLauro. Great lady.
Mr. Hoyer. Where is she from?
Mr. Apfel. I am not sure. Maybe Connecticut.
Ms. DeLauro. The great State of Connecticut.
Thank you, Mr. Hoyer.
Mr. Apfel. Our Associate Commissioner for Retirement Policy
has spent a great deal of time on the issue of women and Social
Security. Women face special challenges like lower pay, more
years out of the labor force, and they rely more on Social
Security than men. We also look at 5 percent of aged married
women are poor, but roughly 20 percent of single elderly women
are poor; 22 percent divorced; 20 percent never married; 18
percent are widows. The poverty rates for women are
significantly higher than they are for men. Widows make up
about two-thirds of the poor, aged population of women.
So there are very special issues here, and we have done
what we believe is appropriate to get information out about the
issues of women and Social Security.
You had asked for some specifics on the implications of
various proposals. We have provided that to the Congress, to
the Senate, and we will provide that for the record here as
well. There are about five options that have been looked at.
One is the normal retirement age and whether it should be
raised. That is one option that is out there. Actually an
increase in the retirement age is a relative positive for women
as opposed to cost-of-living adjustments. If COLAs are reduced
because of longevity for women, there is a negative impact for
women.
Computation years. We provide benefits based on the highest
35 years of earnings. Given the fact that women are out of the
labor force for a number of years, many times more often than
men, increasing the number of computation years has a negative
effect on women compared to men. Meanwhile, across-the-board
cuts in Social Security would mean a larger dollar cut for men
because of the higher Social Security payment, but it is a
larger cut in total income for women because of their reliance
on Social Security in total. So we have explored a number of
these different options and can provide that for the record,
which we did over in the Senate.
[The information follows:]
Mr. Apfel. Also, we have done work on exploring
enhancements to the Social Security benefit for widows and for
low-income workers, which are primarily women; and for SSI
program changes to the general income exclusion. An individual
can receive SSI, but if they receive Social Security, they lose
most of the SSI benefits. So that benefit has now been frozen
for many, many years.
I also can provide information for the record on three
different proposals that are out on looking at ways to enhance
benefits for women. Overall, this is a critical issue, I
believe, for the country over the course of the months and the
years ahead as we move on this system. Sixty percent of our
beneficiaries, adult beneficiaries, are women. We are a women's
program. It affects the lives of everyone, but particularly
women, particularly widows. We will provide this for the
record, and I support all the efforts you are making to
increase our education on this issue.
[The information follows:]
Ms. DeLauro. Thanks very much. I appreciate your efforts
and those of my colleague and good friend Barbara Kennelly. I
think we have a unique opportunity through our offices and the
people that we reach. This is absolutely at the heart of what I
believe our jobs are all about is to provide people with this
kind of information in any way that we can and--I speak for
myself--I can, which we can get this to the broadest--and we
can do it district by district. That is the advantage of why we
are here is to make this information available or have the
kinds of forums and so forth where the material can be
presented and people can just understand it. They can decide
what conclusions they come up with. But I think that we need to
be at the center of--particularly on this system which has had
just an unbelievable effect on people's lives, and we cannot
afford to be cavalier in the way we--you haven't--cavalier in
the way we approach its future. Thanks very much.
Mr. Apfel. Thank you.
Mr. Porter. Thank you, Ms. DeLauro.
Mr. Hoyer.
COMMISSIONER'S AND PRESIDENT'S BUDGET REQUESTS
Mr. Hoyer. Thank you, Mr. Chairman.
Mr. Commissioner, you requested, as I understand it, $7.356
billion in your budget. You received approximately $7.1
billion, am I correct, for the administrative budget, $7.134
billion; am I correct? I didn't want to start with a hard one.
Mr. Apfel. That is the President's request, yes.
Mr. Hoyer. You asked for $7.356 billion. That is a $200
million difference.
Mr. Apfel. Yes.
RESOURCES, STAFFING, AND OUTPUT
Mr. Hoyer. You referred in your statement to staffing
levels. I have been very concerned for the last 18 years I have
been on this committee as we have seen Social Security staff
levels decrease very substantially. I am not sure--I don't have
the figures in front of me, but there have been very, very
substantial reductions, certainly since the 1981, 1982, and
1983 levels. I want to ask you specific questions, but I want
to ask them in that context of whether you have enough people
to do the job as we expect.
And you talked to the Chairman about response levels and
the different satisfaction levels, depending on whether or not
responses were prompt and accurate. Would you describe your
staffing, how that is linked to performance, and apply specific
examples? In other words, what is the difference between your
$7.356 billion and the $7.1 billion that you have requested?
What price are we paying in terms of service and performance?
Mr. Apfel. Those are very key questions, Mr. Hoyer. One of
the tremendous improvements in establishing performance
commitments and performance standards is to be able to link
resources, with staffing, with output. At so much money, we can
have so much staff, and we can do so much for the American
public. At less than that amount, we will have fewer staff, and
we will do less service for the American public. With more
resources, we will have more staff and be able to improve our
service to the American public.
Given that, what I would like to do is specify some of the
targets you had asked me about. The Commissioner's budget
request does provide an added couple hundred million dollars
primarily for staffing with which we would see about a couple
percent increase in workyears over the current levels and about
a 1 percent increase in full-time equivalents. My budget
proposes an increase in staffing for two reasons: one, to
prepare for our internal retirement wave as we start seeing a
number of people retiring from the agency; and two, to increase
our performance in a number of areas like increasing the amount
of disability cases that we will handle--and I can provide that
information for the record and increasing our 800-number
service access. We are currently at 92 percent 5-minutes access
to the 800-number. I would be proposing that we go back up to
95 percent access through the added resources.
In addition, more program integrity activities. We proposed
that we increase the redeterminations that we do for SSI to
look at overpayments and whether payments should be changed;
increasing fraud and abuse prevention and detection activities
from basically 2.1 million in FY 1999 to get us up to almost
2.3 million in FY 2001. So, clearly, more resources would mean
a larger number of redeterminations, better telephone service,
less wait times in our field offices, shorter disability
backlogs, and more appeals handled throughout the year.
Mr. Hoyer. Explain to me again the 2.3; what is that
number?
Mr. Apfel. Those are redeterminations. This is part of our
integrity activities.
Mr. Hoyer. Two hundred thousand additional cases you could
handle on redeterminations?
Mr. Apfel. That is exactly right. So there are a number of
specifics that we will provide for the record.
[The information follows:]
REDETERMINATIONS AND INTEGRITY
Mr. Hoyer. Those 200,000 cases would be carry-overs, so
they would be pending longer?
Mr. Apfel. They would be pending longer. It is very
important that we continue to expand our integrity activities.
We really have two hats in Social Security. One is direct
customer service. The other is ensuring that we are providing
high-quality integrity services to the American public. That is
why it was so important to expand continuing disability
reviews, the reviews of people on disability. Redeterminations
are that same kind of device to determine whether the
individual still has the same financial needs to be on the SSI
rolls. So this is one of our integrity functions. It is very,
very critical. We have tried very hard to expand. Added
resources means more redeterminations. It means a higher
integrity program.
Mr. Hoyer. If you could submit for the record some sort of
a more precise outline of the cost of not doing the extra 200
thousand in terms of service. You also might comment in your
answer on the impact on morale on existing employees who are
stretched to do more with less resources, people resources.
Mr. Apfel. If I could, I will answer that now. On the
redeterminations, currently we bring back in about $7 for every
$1 invested in redeterminations. So it is highly cost-
effective. Continuing disability reviews currently bring in
about $6 for every $1. It is actually now $12, but it is going
to be going down to $6 overall as we get more people through
that system.
The pressure on our agency, Mr. Hoyer, is very real. We
face very strong workload constraints, and those workloads are
growing, and the morale--I am so proud of being the
Commissioner of Social Security because of how hard the people
in Social Security work to do their jobs. But the constraints
are real, and the pressures are real, and that means that
service can deteriorate unless we provide the resources that
are necessary.
TURNOVER RATE AND THE RETIREMENT WAVE
Mr. Hoyer. What is the turnover rate at the GS-9 and below?
You may not have that specifically, but what generally is the
turnover rate?
Mr. Apfel. The turnover rate at Social Security--and we
will have to get it for the record--is relatively low
throughout the country because, I believe, of the commitment to
SSA as an organization. But that turnover rate--and I will
provide this also for the record--is going to significantly
increase in the next 5 to 6 years. We have a retirement wave
that is coming at us in the next few years that is very major.
Our median age is somewhat higher than the rest of the Federal
Government. If we don't start preparing now to replace the
individuals who are going to be leaving in the next 3 and 4 and
5 years, we will see significantconsequences for service to the
American public. So we need to be flattening that retirement wave and
getting individuals in, trained, and prepared to deal with the new
workloads.
[The information follows:]
SOCIAL SECURITY ADMINISTRATION TURNOVER RATES
Approximately 42 percent of SSA's permanent employees
(full-time and part-time) are at grade 9 and below. In FY 1999,
SSA lost about 1,700 permanent employees at these grade levels.
This represents an annual attrition rate of 6.3 percent.
Included in that total are nearly 400 losses due to ``early
out'' retirements. Excluding the impact of early outs, the
annual attrition rate for these grades was 4.9 percent.
For SSA's total permanent workforce at all grade levels, FY
1999 attrition was 6.0 percent based on about 3,800 losses.
Excluding about 1,400 early out retirements, the loss rate was
about 3.8 percent.
Included in the 3,800 losses in FY 1999 were nearly 1,200
regular retirements. This was an increase of more than 200 from
the number of employees who retired in FY 1998. We expect the
number of regular retirements to increase steadily over the
next decade and to more than double by FY 2007 from the FY 1999
level.
IMPLEMENTATION OF THE TICKET TO WORK
Mr. Hoyer. The Ticket to Work and Work Incentives
Improvement Act, a great accomplishment in this last Congress.
Will the Social Security Administration be able to get the
ticket program up and running by January 1?
Mr. Apfel. We are moving expeditiously. We will meet all
targets that are in the legislation. Again, this is a 3-year
phase-in, but there is $58 million requested in the President's
budget for return-to-work activities. We intend to have the
contract awarded for the program manager, and, the proposal is,
if funded, to have our work incentive outreach grants to the
community funded next year as well. This will be phased in over
3 years, but we are right on schedule to continue this process
to meet the requirements and the law. I think it is a very
important piece of legislation.
Mr. Hoyer. My time is up.
Mr. Porter. Thank you, Mr. Chairman.
Mr. Apfel. If I could add just one other point on that.
This year we are absorbing about $10 to $20 million in our FY
2000 budget because the legislation was not enacted until after
the appropriation was done. So one of the other areas we have
talked about, resource constraints, we are absorbing $10 to $20
million to start the implementation now. Very, very important
to do, but I would point out that is another one of our
resource constraints that we are under.
Mr. Hoyer. Thank you.
UNCASHED CHECKS
Mr. Porter. Mr. Commissioner, several short questions.
Uncashed checks. Your budget projects an increase from $10
million in fiscal 1999 to $17 million in fiscal 2000 and a
decline to $14 million in fiscal 2001 for uncashed checks. Why
would this be so erratic, given the fact that the percentage of
direct deposits has grown from 63 percent in 1996 to 77 percent
in 1999?
Mr. Apfel. Why does the number bounce around? The actual
unnegotiated checks amount depends on three figures: one, the
size of the check; two, the amount of checks there are that
aren't coming through direct deposit; and three, interest
rates. Those are the three variables that are out there.
Clearly the size of the check has gone up some. The number
that is coming out through paper is going down, which is good,
and the interest rates are, as we all know, somewhat uncertain.
We have always requested more than is necessary for
unnegotiated checks for a reason. We don't want to be in a
position if interest rates pop up to find that we don't have
enough resources for it. So, money lapses each year in our
request. Money lapses at the end of each year, $2, $3, $4
million, and probably it is better to be safe than sorry on
that amount of money.
In FY 1998, we spent, actually obligated, about $12 million
for unnegotiated checks. In FY 1999, it was down to $10
million. We requested about $17 million in FY 2000. So it
didn't make sense to have that much of a buffer, we felt. So we
reduced the request down to $14 million for FY 2001, as you
pointed out. That still gives us a buffer. So what we are
finding, in other words, is the amount that we are actually
expending is declining some, and that we had asked for too much
this last year. So we have reduced that amount, but it still
gives us a buffer for the future just in case interest rates
come up higher than we expect.
ELECTRONIC COMMERCE
Mr. Porter. Do I presume that the ultimate goal of the
Social Security Administration would be, assuming the
technology exists for most people to conduct everything over
the Web and through electronic commerce, deposits all would be
automatic, the applications would all be done over the Internet
access to the Social Security Administration and the like? Is
that sort of where you might be 20 years from now?
Mr. Apfel. I hope where we might be is a lot sooner than 20
years from now, Mr. Chairman. In terms of checks, our goal is
all checks should be direct-deposited. There are a number of
individuals that are reluctant to receive their check
electronically. Those numbers, as you pointed out, have
increased significantly over the last few years, and I
anticipate will continue to. As our education shows, that it is
better for the American public. It is safer. There are no
stolen checks. It is cheaper. So our goal is to increasingly
move in the direction of electronic service on checks.
That is true also in our service delivery system. What we
need to be able to do is touch the American people as they want
to be touched and served. That means some individuals are going
to need to go into our offices in Illinois, Maryland, etc. to
receive service. Some are going to want to use the 800-number,
and some are going to want to use the Internet.
Think about it this way: Ten years ago we didn't have an
800-number. Now we have an 800-number. We have recently brought
up our Web site. This year we will receive 26 million office
visits, roughly 60 million phone calls, and 10 million hits on
our Web site. That number is going to grow dramatically in the
future as we do more retirement planning, and as we start to
find ways to use the Internet to actually provide some level of
service. But that will never replace, I believe, ever, for the
rest of my lifetime, face-to-face service with the American
public in places like Fargo, North Dakota, and in your
district, and in Maryland.
Mr. Porter. But it should become much less.
Mr. Apfel. All three services need to be provided, and we
need to meet the public where they prefer. Electronic commerce,
Ibelieve, is one of the answers in meeting those dramatic
increases in workloads that we will face in the next 10 to 15 years, as
the baby boomers retire. Remember, it is not just the baby boomers
retiring. It is baby boomers moving into their disability-prone years,
which is their fifties. So our disability cases, which are over half of
our workload, represent a very substantial amount of work. Disability
is going to grow as well as retirement. So finding ways to do more of
this through the Internet, through our 800-number, and through our
field offices is going to be important. It will become one of the three
tools of our main service delivery system over time.
INTERNET SECURITY
Mr. Porter. You have answered the premise to my question.
The premise was if we--how do you assure that you have the
security measures that you need for a Web site so that people
know that their information is confidential and won't be shared
by others or used against them?
Mr. Apfel. This is a very central issue to us. Ever since
the creation of Social Security, the privacy of our records has
been at the core of what we do as an agency. As we move into
the Internet, there are a whole series of new questions that
come up. The Committee remembers 3 years ago we tried to
provide our Personal Earnings and Benefit Estimate Statement
on-line. There were concerns about privacy, so we pulled back
that service. We hadn't created the right balance between
safety, privacy and access to information.
Our new retirement planner is a way that we found to do
this without affecting individuals' records. We provide them
with a calculator, and they make their own calculations on
their own computer. But as we move into the future on this
issue, privacy is going to be a continually important issue.
In the area of our business customers, we believe it will
be cost-effective to use Public Key Infrastructure (PKI)
technology to ensure that the individual--the company
responding with their records--will be accessing us with data
that we believe is entirely private. That is cost-effective for
businesses over the short term, for us to be able to move in
that direction.
For individual customers, PKI is probably too expensive
right now, but those costs are dramatically being reduced. We
ought to be able to get some information, preliminary
information, through the Web before we cross over into private
information. Then we should bring the person into our offices
to verify that they are the individual. We can't move forward
on full Internet applicability until we have absolutely solid
privacy systems in place. In the next 2 and 3 and 4 years, we
will test several privacy systems and would like to brief this
Committee on what we are looking at in this area, but only
after we can ensure that our security system is safe and it is
appropriate and cost-effective. We can do it now with
businesses. It is going to take longer with individuals.
Mr. Porter. Thank you, Mr. Apfel.
Mr. Hoyer?
WORK INCENTIVE SPECIALISTS
Mr. Hoyer. Thank you. I want to go back, if I can, to the
work incentive bill. You may have referenced this in some of
your answers. What progress has been made on implementing work
incentive specialists both--particularly to work--and the Work
Incentive Improvement Act? This is, as you know, one of the few
provisions in the law that is effective upon enactment.
Mr. Apfel. We are very excited about the work incentive
specialists within our system. We are moving forward, starting
this summer, in a number of sites around the country to test
out the roles and responsibilities of the specialists in our
offices. I will provide a listing for the record of the actual
sites that we are going to begin in around the country. There
are a number. There is somewhere in the vicinity of about 52, I
believe, and I will give you that list.
[The information follows:]
Mr. Hoyer. None running at this point, starting this
summer?
Mr. Apfel. Within 2 months we will be starting. Our goal is
to have a number of these up and running through the course of
this year to significantly expand this function in our next
budget. We will basically have $9 million for the employment
specialists' payroll activities in the FY 2001 budget.
The real question we need to determine here is: How many
work incentive specialists are we going to need around the
country? I don't know the answer to that yet. We need to find
out as this new program unfolds what our responsibilities will
be in those offices. I think if we look at the Social Security
Administration field office structure--claims reps, service
reps--this is going to become one of the other key roles. As
the Social Security disability system moves from not only
handling cases but also to helping people move off our
disability rolls, part of our mission internally, part of the
culture of the organization, needs to change and that is going
to involve the new specialists developing that mission.
Our commitment this year is pilots all around the country;
next year we'll expand, but I can't tell you yet what FY 2002
holds. I think we need to get the experience under our belts
over the next year and a half about how the cultureof our
organization changes and how we can provide better service to the
public.
CULTURE CHANGE
Mr. Hoyer. My next question was going to be on the culture,
on the mind-set of how we are going to make all of these
requirements work together to facilitate those with disability
moving into the work force. Historically we have had
counterproductive philosophy that if you--we wanted you to
work; as soon as you worked, we dropped all your benefits,
obviously a huge disincentive for people to work. Well, on a
number of pieces of legislation, we have tried to jettison that
philosophy. And I would be very interested in your conclusions
as to how the mind-set of the folks who administer these laws
is changing, because although we have made changes to the law
sometimes, we don't change the mind-set as well, we don't
accomplish the objectives of the legislation.
Mr. Apfel. And, Mr. Hoyer, that is the mind-set of the
organization and the mind-set of the disability beneficiaries
themselves. I have gone all around this country and talked with
individuals with disabilities on our rolls. Their central fear
is losing their health care coverage. That is one. Secondly,
that fear of if I do go back to work and get off of the
disability rolls, am I going to have to start all that red tape
all over again to get back on? That is going to be incredibly
hard.
So implementing the new legislation is not only about the
ticket, which would help people provide the rehabilitation
services and incentives to be able to return to work. It's also
about continued health care coverage, and, third, an easy on/
off system so if someone does go off the rolls because of work,
and they find themselves not being able to work, they can apply
back for benefits and be put back on immediately while we
assess their case again so they don't have that long period of
time waiting for benefits to be restored. For an individual
with disabilities, that fear of the unknown is enormous.
Now, that is how the individual, I think, will be helped.
What we need to be able to do--and that is why I think these
work incentive outreach grants are so important for us to
have--is to get the community-based organizations helping us,
partnering with us to provide incentives and get people excited
about testing-out going back to work. Our work incentive
specialists need to be helping, working with them to try to
create a climate for our beneficiaries to be able to test-out
going back to work in increasing numbers.
It is culture change for us. It is a legal change which is
taking place. It is resources that we would hope we would get
to be able to implement this year. It is culture change for us
as an organization, and then it is ultimately culture change
for individuals. It is a better climate for them to actually
return to work.
Mr. Hoyer. Thank you very much.
Thank you, Mr. Chairman.
Mr. Porter. Mr. Hoyer and I have been filibustering here so
we could await the arrival of Mrs. Lowey.
SOCIAL SECURITY STATEMENT
Mrs. Lowey. Well, I have to tell you, Mr. Chairman, I am
most appreciative, and I appreciate, Commissioner Apfel, all
the good work you are doing. It is a pleasure to be here.
I have been very interested in the public reaction to the
arrival in the mailboxes of the Social Security Statement. I
think this is an invaluable tool, particularly young people who
can use this to plan their retirement.
I have two questions. Number one, what is the reasoning; as
a result of the reaction, are you planning to modify the
statements at all? Is there additional information that you
should be putting in there? I think it is so important that
people understand the reality of what this really is and the
impact on their lives, and perhaps you could discuss it.
Mr. Apfel. Well, one of the things that I have been the
most proud of as Commissioner of Social Security is the Social
Security Statement. It has received an overwhelming positive
response from a group of our customers, the taxpayers. Not our
beneficiaries, because they are not getting Statements, but by
the 125 million people who are working in this country. The
response has been overwhelmingly positive from workers and
overwhelmingly positive from retirement planners in helping
them to work with the public to enhance retirement savings. We
received an overwhelmingly positive response throughout the
public, and I am thrilled about it.
Our preliminary data are showing an increased knowledge
about Social Security, how it works, what the key features of
Social Security are; also, an increased knowledge that people
need to be doing more for their own personal retirement
planning, which to me is the single most important variable
here. It is not only what Social Security is, a valuable
foundation, but what it isn't; it is not the only thing
necessary to live an adequate life in retirement.
I can provide this for the record--I just had a briefing on
this yesterday. It hasn't gone public yet, so by the time the
hearing record gets done, we can provide it for the record. I
can provide information on the number of people who have read
the Statement and said, ``I am going to change my financial
planning to provide more by way of private savings and pensions
to prepare for my future.'' That is significant, if Americans
can start using this as a financial planning tool and also can
start thinking about what else they need to do for their
retirement. And so I am extremely pleased with the results to
date.
[The information follows:]
MODIFICATIONS TO SOCIAL SECURITY STATEMENT
Mr. Apfel. You also asked, Mrs. Lowey, about whether there
will be modifications in the future. We expect about every year
to make modifications to strengthen the Statement. What we hear
over the year what people need, and we would like to be able to
make modifications to that Statement. We have already made some
modifications. We added more information about the long-term
problem of solvency that Social Security faces, to be able to
use it as a device to tell Americans not only what Social
Security can provide, but also that there are real challenges
out there that we need to face in this country. That was a very
good improvement. We will be looking at others in the future.
The General Accounting Office has just made some
recommendations. I should point out the General Accounting
Office views our Statement as much improved, that it meets its
purpose of basic information, but they did make some
suggestions we will be looking at this year to improve it as
well.
I would say there are some who would like to see us add
rate of return information in on the Social Security Statement.
I think it is inappropriate on the Social Security Statement. I
don't think rate of return is an appropriate calculation for
Social Security because it is asocial insurance program. So
there are some things we will be doing with the Statement, but there
are also things that, under my tenure, we certainly will not.
Mrs. Lowey. I am not sure, I think you just kind of put in
there a statement about the concerns of the solvency of Social
Security. Certainly in this Congress there are big differences
as to how you solve the problems, so what did you put in there?
And if you think you are opening a hornet's nest, you can
respond to me in writing, but I just wonder.
Mr. Apfel. We thought it was very important to add to the
Statement several factors: one, that as of 2015 under
intermediate projections, revenues coming into the system will
start to be less than the outlays going out of the system, and
that by 2034, the Trust Fund will be exhausted and we could pay
only about 71 percent of benefits. Those all need to be updated
for the new actuary's reports. So we have that information in
there.
We also point out that the benefits are based upon current
law projections, and that if there are law changes in the
future, that could affect what the benefit structure would be.
It is not the right place to get into the pros and cons of
various solvency proposals, but it is to alert the public that
there is a doubling of the aging population in the next 20
years. They need to be aware that there will be changes to the
system. It is within that context that we made those changes,
and those changes have been widely, positively received.
EFFECT OF ELIMINATION OF RETIREMENT EARNINGS TEST ON DIFFERENT INCOME
CATEGORIES
Mrs. Lowey. Obviously you can tell by my reaction I have
questions about that, and perhaps we can discuss it further,
but I think there are various levels of expertise on the part
of the people who are reading these statements, and although
you want to give them information, since the information
changes depending upon the health of the economy, I just wonder
the validity of including that information. But we will discuss
that.
I am delighted with the whole report, and I think it is a
great idea.
Since we have lifted the Social Security earnings
provision, I would also be interested, and you can respond to
me in writing, is what percentage of the people are in
different income categories and how that will be affected by
the raising of the limits on--outside income for those on
Social Security. I think that will be very interesting to see
what percentage of the people are still getting Social
Security, and although they may have incomes of $100,000,
$200,000, $300,000, as we look at these numbers, I think it
would be very relevant. I would be most appreciative of that.
Mr. Apfel. I will provide that for the record.
[The information follows:]
Effect of Repealing the Retirement Earnings Test by Income Categories
The table below describes the effects of the repeal of the
retirement earnings test by income category. The first column
divides the total number of families with persons age 65-69
into ten equal categories by income. The second column consists
of the 1999 income levels (unearned and earned) for those
categories. The third column describes the share of net
benefits (the increase in Social Security benefits minus the
increase in Federal personal income tax on those benefits) for
each income category.
If the retirement earnings test exempt amount for
beneficiaries age 65 or over had been eliminated in 1999, the
aggregate increase in net benefits would have been distributed
as follows:
------------------------------------------------------------------------
Income decile (families with 1999 income Share of net
persons aged 65-69) (dollars) benefits (percent)
------------------------------------------------------------------------
1st.............................. 0-9,952 0
2d............................... 9,953-15,145 0
3d............................... 15,146-19,684 0
4th.............................. 19,685-24,519 1
5th.............................. 24,520-29,916 0
6th.............................. 29,917-36,108 4
7th.............................. 36,109-43,503 3
8th.............................. 43,504-54,699 9
9th.............................. 54,700-75,484 23
10th............................. 75,485 and up 59
------------------------------------------------------------------------
RESULTS OF CUSTOMER SATISFACTION INDEX SURVEY
Mrs. Lowey. I know the bell is ringing, and my colleagues
were kind enough to wait for me.
I would also be interested in the University of Michigan
business school American Customer Satisfaction Index Survey,
and perhaps you can tell us how you scored.
Mr. Apfel. Well, one of the recent reports that just came
out by the private sector on our service to the public came out
a few months ago, the American Customer Satisfaction Index
Survey. The survey is conducted by the University of Michigan
working with Arthur Andersen and the American Society for
Quality. And we were very pleased with the results. We received
an 82 percent positive response, which put us at the highest
level of all government agencies and about 10 percent above the
private sector. So we were very, very pleased with the results
from the survey.
They were looking in this first year of the survey at our
retirement beneficiaries, and we thought it was important to
move beyond retirement. So this year we will be looking at not
only retirement, but also our survivors beneficiaries and
disability beneficiaries. More and more of our customers will
be assessed through this system. I think it is quite important
that we do that, both that we continue to get customer
reaction, and that, two, we use the private sector to help us
show how good a job we do with the American public.
Some of the statistics that were in the report--and I will
provide them for the record because I don't have all of them in
front of me--but our customer service and courtesy and
knowledge levels were 86 percent, very, very high. One of the
statistics, regarding how we do about timeliness and
appropriateness of payments, we scored a 94 percent. There is
almost no one that receives anything in the nineties in these
results.
So we have done very, very well in the report, but the
reality is that we do face, as I said to Mr. Hoyer, significant
challenges in the future to be able to continue to meet
customer demands. Customers' expectations are growing over
time--more desire for the Internet, more desire for immediate
service in the 800-number--and if we are not ready, we could
see those numbers decline. I don't want to see that happen. I
want to see our numbers improve. We are proud of what we have
done, but we have got a lot more to do.
[The information follows:]
American Customer Satisfaction Index (ACSI) Survey
SSA received a rating of 82, one of the highest of all
participating Federal Agencies and 10 points higher than the
comparable private sector index.
The survey is the only uniform, cross-industry measure of
the quality of goods and services available in the United
States. It is produced through a partnership among the
University of Michigan Business School, the American Society
for Quality, and Arthur Anderson. The survey focused only on
SSA customers who are receiving retirement benefits. Retirement
beneficiaries are the Agency's largest customer base, including
27.6 million beneficiaries.
The table below summarizes SSA scores from the survey,
including the overall index of 82 percent and the score of 94
percent given SSA for timeliness of monthly benefits. According
to ACSI, this is a remarkable achievement for SSA as few scores
reach the high 80's, much less the 90s.
ACSI Results
Percent
Monthly Benefits (Timeliness)................................. 94
Information (Clarity and Usefulness).......................... 79
Customer Service (Accessibility, Courtesy, Professionalism)... 86
Customer Expectations (Expected Quality)...................... 73
Perceived Quality (Experienced Quality)....................... 86
Beneficiary Trust (Confidence in Future Service).............. 79
Customer Complaints........................................... 8
SSA ACSI index Rating......................................... 82
PREPARING FOR INTERNAL RETIREMENT WAVE
Mrs. Lowey. Just quickly, because we are running out of
time, the last question was exactly related to your last
comment. I understand that the administration is facing your
own retirement wave in terms of employee retirements just about
the same time that your workloads are expected to increase with
the baby boomers. In fact, Ben Cardin, our colleague, raised
this issue during the floor debate on the supplemental last
month. I don't know if we have time. You could tell us how you
are addressing this issue, or you can respond, Mr. Chairman, to
us in detail. Maybe just take a minute or so.
Mr. Apfel. I will, Mrs. Lowey.
Mr. Cardin had proposed, and then withdrawn, an amendment
to fund the Social Security Administration in the year 2000 at
the Commissioner's budget request level. That would have
enabled us to bring on a number of new employees to better
prepare for the retirement wave that will be hitting us. If we
look at our retirement wave internally, it is a daunting task
that we face. We see the number of people who will be leaving
our agency starting 3 and 4 and 5 and 6 years from now.
We have done two things. One is we have tried to flatten
that retirement wave by establishing an early-out program to
enable people to retire earlier so we don't have a surge 3 and
4 and 5 years from now. At the same time we have also tried
everything that we can to bring on new people in our agency to
be ready to deal with this workload that is going to be coming
our way. What is interesting is these young people I am seeing
in our agency now are going to be the heart of our organization
in 5 and 6 and 7 years as this retirement wave passes, so we
need to get them in as early as possible to get them trained
with new technology to be prepared to deal with the new
challenges that we face, and that is what that resource is
going to help us do.
Mrs. Lowey. Thank you very much.
Thank you for your patience, Mr. Chairman.
Mr. Porter. Thank you, Mrs. Lowey.
Mr. Commissioner, as I said at the opening of the hearing,
you do an absolutely marvelous job. You had probably one of the
most important jobs in the world. You handle a lot more money
than Bill Gates, probably a lot more money than most countries
in the world. You have this ongoing need to keep up
technologically with all of the developments. You have
expectations that are huge among your customer base. You have
quasijudicial determinations to be made. You have court cases
arising out of that. You have got one of the most interesting
jobs around, and you get paid about one half of 1 percent of
what Bill Gates makes and probably work harder than he does.
We admire the work that you did, and we admire the work
that your people do, and I think the culture and spirit of your
agency reflects your own determination to get things right, and
we really appreciate your good work there, Ken. Thank you so
much.
Mr. Apfel. Mr. Chairman, thank you very much. It has been
the honor of my life to be the custodian of this program, and
it has been an honor to work with you over the years, and I
hope that continues in whatever capacity you find yourself.
Mr. Porter. Thank you, sir. So do I.
We will have to stand in recess for this vote.
[Recess.]
[The following questions were submitted to be answered for
the record:]