[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]



                 DEPARTMENTS OF LABOR, HEALTH AND HUMAN

               SERVICES, EDUCATION, AND RELATED AGENCIES

                        APPROPRIATIONS FOR 2003

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS
                             SECOND SESSION
                                ________
  SUBCOMMITTEE ON THE DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, 
                    EDUCATION, AND RELATED AGENCIES
                      RALPH REGULA, Ohio, Chairman
 C. W. BILL YOUNG, Florida           DAVID R. OBEY, Wisconsin
 ERNEST J. ISTOOK, Jr., Oklahoma     STENY H. HOYER, Maryland
 DAN MILLER, Florida                 NANCY PELOSI, California
 ROGER F. WICKER, Mississippi        NITA M. LOWEY, New York
 ANNE M. NORTHUP, Kentucky           ROSA L. DeLAURO, Connecticut
 RANDY ``DUKE'' CUNNINGHAM,          JESSE L. JACKSON, Jr., Illinois
California                           PATRICK J. KENNEDY, Rhode Island
 KAY GRANGER, Texas
 JOHN E. PETERSON, Pennsylvania
 DON SHERWOOD, Pennsylvania         
                   
 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.
       Craig Higgins, Sue Quantius, Susan Ross Firth, Meg Snyder,
             and Francine Mack-Salvador, Subcommittee Staff
                                ________
                                 PART 6

                            RELATED AGENCIES
                                                                   Page
 Social Security Administration...................................    1
 Corporation for Public Broadcasting..............................  275
 Library Services Panel (IMLS and NCLIS)..........................  363
 Railroad Retirement Board........................................  514
 Railroad Retirement Board Inspector General......................  610
 Medicare Payment Advisory Commission.............................  640
                                ________
         Printed for the use of the Committee on Appropriations
                                ________
                     U.S. GOVERNMENT PRINTING OFFICE
 80-470                     WASHINGTON : 2002




                       COMMITTEE ON APPROPRIATIONS

                   C. W. BILL YOUNG, Florida, Chairman

 RALPH REGULA, Ohio                  DAVID R. OBEY, Wisconsin
 JERRY LEWIS, California             JOHN P. MURTHA, Pennsylvania
 HAROLD ROGERS, Kentucky             NORMAN D. DICKS, Washington
 JOE SKEEN, New Mexico               MARTIN OLAV SABO, Minnesota
 FRANK R. WOLF, Virginia             STENY H. HOYER, Maryland
 TOM DeLAY, Texas                    ALAN B. MOLLOHAN, West Virginia
 JIM KOLBE, Arizona                  MARCY KAPTUR, Ohio
 SONNY CALLAHAN, Alabama             NANCY PELOSI, California
 JAMES T. WALSH, New York            PETER J. VISCLOSKY, Indiana
 CHARLES H. TAYLOR, North Carolina   NITA M. LOWEY, New York
 DAVID L. HOBSON, Ohio               JOSE E. SERRANO, New York
 ERNEST J. ISTOOK, Jr., Oklahoma     ROSA L. DeLAURO, Connecticut
 HENRY BONILLA, Texas                JAMES P. MORAN, Virginia
 JOE KNOLLENBERG, Michigan           JOHN W. OLVER, Massachusetts
 DAN MILLER, Florida                 ED PASTOR, Arizona
 JACK KINGSTON, Georgia              CARRIE P. MEEK, Florida
 RODNEY P. FRELINGHUYSEN, New Jersey DAVID E. PRICE, North Carolina
 ROGER F. WICKER, Mississippi        CHET EDWARDS, Texas
 GEORGE R. NETHERCUTT, Jr.,          ROBERT E. ``BUD'' CRAMER, Jr., 
Washington                           Alabama
 RANDY ``DUKE'' CUNNINGHAM,          PATRICK J. KENNEDY, Rhode Island
California                           JAMES E. CLYBURN, South Carolina
 TODD TIAHRT, Kansas                 MAURICE D. HINCHEY, New York
 ZACH WAMP, Tennessee                LUCILLE ROYBAL-ALLARD, California
 TOM LATHAM, Iowa                    SAM FARR, California
 ANNE M. NORTHUP, Kentucky           JESSE L. JACKSON, Jr., Illinois
 ROBERT B. ADERHOLT, Alabama         CAROLYN C. KILPATRICK, Michigan
 JO ANN EMERSON, Missouri            ALLEN BOYD, Florida
 JOHN E. SUNUNU, New Hampshire       CHAKA FATTAH, Pennsylvania
 KAY GRANGER, Texas                  STEVEN R. ROTHMAN, New Jersey    
 JOHN E. PETERSON, Pennsylvania
 JOHN T. DOOLITTLE, California
 RAY LaHOOD, Illinois
 JOHN E. SWEENEY, New York
 DAVID VITTER, Louisiana
 DON SHERWOOD, 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 2003

                              ----------                              

                                        Tuesday, February 26, 2002.

                     SOCIAL SECURITY ADMINISTRATION

                               WITNESSES

JO ANNE B. BARNHART, COMMISSIONER
DALE W. SOPPER, ACTING DEPUTY COMMISSIONER FOR FINANCE, ASSESSMENT AND 
    MANAGEMENT
JAMES G. HUSE, JR., INSPECTOR GENERAL

                             Direct Deposit

    Mr. Regula. Okay, we are going to get started.
    I think this is the first hearing we have had with 
Commissioner Barnhart, and we are happy to welcome you. You 
have an agency that touches the lives of people. We know. We 
hear from them. It is an important element of senior citizens' 
concerns. They look for that check every month, and if it is 
one day late they call us. And it is amazing.
    I am just curious. How many are on direct deposit, of your 
total recipients?
    Ms. Barnhart. About 75 percent.
    Mr. Regula. Oh, really.
    Ms. Barnhart. Seventy-five percent of our total recipients. 
For Social Security, it is about 80 percent. For SSI, I think 
it is about 50 percent.
    Mr. Regula. I am surprised that you get that large a 
number, because people tend to be a little suspicious. It must 
be working or you wouldn't have that kind of response, because 
they talk a lot to each other through their organizations.
    That is remarkable.
    Ms. Barnhart. I think it is, too, particularly given the 
fact that we started with a population that really was not used 
to having that capability.
    Mr. Regula. That is my point. That is really a rather 
recent phenomenon: the use of direct deposit. I suspect your 
numbers have grown considerably among those that use that form.
    Well, we look forward to your comments, and we will have 
some questions; so I think we will just get started.

                           Opening Statement

    Ms. Barnhart. Thank you, Mr. Chairman. I am really pleased 
to be here today to present the fiscal year 2003 appropriation 
requests for the Social Security Administration. Although I 
have submitted longer testimony for the record, I have a 
shorter statement to read.
    Mr. Regula. That will be made a part of the record.
    Ms. Barnhart. For all the people who depend on Social 
Security, as you said, the many lives that it touches--whether 
they are survivors, retirees or people with disabilities--for 
all the people who depend on SSI, the aged and the most 
vulnerable of our society--the work that we do matters a lot. 
Whether we are providing a supplement to private retirement or 
a lifeline----


                     BENEFICIARY GROWTH IN PROGRAMS


    Mr. Regula. Excuse me. If I could interrupt you--I might do 
this as we go along. As a percentage of the total that you 
serve, has the SSI beneficiary population grown or is it fairly 
stable?
    Ms. Barnhart. As a percentage over time has it grown?
    Mr. Regula. As a percentage of the people who get benefits 
through your agency, are the SSI recipients a fairly stable 
group?
    Ms. Barnhart. I don't know that I have that information 
today to talk about the timeline, although we do have it, I am 
told.
    I don't have a percentage; what I have is an actual amount. 
The SSI actual total is very stable, at least over the last 
several years. And actually the beneficiaries, in terms of Old-
Age, Survivors and Disability Insurance, have grown some, so 
probably the percentage of SSI recipients of the total is 
smaller. But I would say, from my discussions with our regional 
commissioners and the people in the field office who handle 
these cases, that SSI cases are often our more complex 
workload, so they actually take more time to deal with
    Mr. Regula. How about disability? Is that a growing 
phenomenon?
    Ms. Barnhart. Disability is definitely a growing 
phenomenon. In fact, while the number of retirement claims is 
projected to go up somewhere around 20 percent over the next 
decade, the number of disability claims is actually projected 
to go up 30 percent. So, due to the baby boom population, the 
disability rolls are projected to grow substantially.


                         STATUS OF TRUST FUNDS


    Mr. Regula. Does that have an effect on your reserves? It 
must, because those benefits far exceed anything that is paid 
in by the recipients.
    Ms. Barnhart. It certainly has an effect on the reserves 
from the standpoint of more claims coming in. Furthermore, 
disability often tends to happen earlier than retirement would, 
even early retirement. So what you are talking about is 
individuals whose life span of payments ends up being a lot 
longer than one would have anticipated, assuming normal life 
expectancy.
    Mr. Regula. Okay. Go ahead.

                     Opening Statement (continued)

    Ms. Barnhart. Whether we are providing a supplement to 
private retirement with Social Security or a lifeline of 
critically needed income support, we have to provide the kind 
of service that each and every claimant in this country expects 
and deserves. As Commissioner of Social Security, I am 
committed to achieving that goal.
    Our total program and administrative budget request for 
2003 is $512 billion. More than 98 percent of that budget will 
be paid out as monthly benefit payments; I do want to emphasize 
that.
    Mr. Regula. Say that again.
    Ms. Barnhart. Of $512 billion that we are estimating that 
we will need, more than 98 percent of that amount will be paid 
out as benefits, as title II retirement, survivors, or 
disability benefits, or as SSI.


                   STATUS OF TRUST FUNDS (CONTINUED)


    Mr. Regula. So there really isn't much of anything going 
into reserves?
    Ms. Barnhart. Let me clarify, if I may.
    Actually, the Social Security trust fund right now has--at 
the end of 2001 according to the latest report--about $1.2 
trillion in it and is projected by 2007 to have almost $2.4 
trillion in it. The problem with the reserves doesn't really 
occur until 2016, based on the most recent projections. The 
trustees will be coming out with a new report next month, so 
that may change, but I doubt it because the projections have 
been relatively stable over the last several years.
    The projection is that in 2016 the trust fund will then 
need to use the interest as well as the tax payments coming 
into the fund to meet benefit obligations. By 2038, absent any 
action by the Congress to change the current benefit structure 
or the way that benefits are provided, the trust funds would 
actually be exhausted. We would be in a situation then of 
having to pay benefits solely from the tax payments that are 
coming in in that current year. The estimate from the report is 
that would be sufficient to pay approximately 73 percent of 
current benefits, as scheduled.
    Mr. Regula. Are you dipping into reserves now? You say it 
would have to be solely, after 2038, dependent on income 
flowing in.
    Ms. Barnhart. That is right. It is my understanding that we 
will not deplete the reserves until that point in time. The 
$512 billion is the cost for the next fiscal year of this 
budget, for paying all the program benefits as well as for 
covering our roughly $8 billion Limitation on Administration 
Expenses.
    Mr. Regula. Your reserves are really government paper, 
aren't they?
    Ms. Barnhart. To the extext not needed for current benefit 
payments, the reserves, in essence, are Treasury bonds. The 
contributions to the trust funds are posted to the trust fund 
every time they are received. And then basically they become 
bonds; they are used to purchase bonds.
    Mr. Regula. There isn't actually a lockbox out there. We 
had a lot of fun talking about it, but----
    Ms. Barnhart. I have worked on Social Security issues off 
and on, on Capitol Hill and in the executive branch, for the 
better part of 20, 25 years. The situation is that typically, 
during that time, the contributions to the trust fund have been 
posted against the trust fund and then converted to bonds. When 
they came due, when the trust fund needed those funds, they 
were redeemed. From my perspective, they are therefore backed 
by the full faith and credit of the U.S. Government.
    Mr. Regula. That is exactly right. The country stands 
behind it.

                     Opening Statement (continued)

    Ms. Barnhart. Mr. Chairman, in the interest of being as 
responsive as possible to the questions you have, even though I 
had shortened my written statement to an even shorter oral 
statement, I am thinking what I might do is talk through my 
planned oral statement so we can get to questions. And please 
feel free to interrupt. I think this kind of dialogue is much 
more to the benefit of the program and the people we are trying 
to serve than me just sitting here reading.
    We have five appropriation requests now before this 
Committee. I am providing statements for the record today for 
each of those requests.
    Just to recap what our LAE budget request for 2003 does: It 
is a request for $8.283 billion. It represents an increase of 
4.7 percent from 2002. It basically allows Social Security to 
maintain performance in most, what we call, ``key service 
delivery'' areas.
    For example, as I am sure you will be interested, it will 
enable us to pay monthly benefits to more than 50 million 
people, to process more than 5 million new claims for benefits, 
to issue 17 million new and replacement cards--and the vast 
majority of the cards that we issue are replacement cards--to 
handle more than 60 million calls to our 800-number, and to 
issue 136 million Social Security statements to current 
workers. So those are the main indicators, I think, as we look 
ahead to performance and what that $8.3 billion will allow us 
to do.
    We also will be working to make progress in the President's 
Management Agenda. I am sure that the Chairman and others have 
seen in the budget, the President has five key areas that he 
has each agency focusing on. From SSA's perspective, this 
year's request is going to help us significantly expand 
electronic services, which are the services we make available 
to the public over the Internet. Right now, about 23 percent of 
all of our services are available over the Internet. We plan to 
have 40 percent available with this budget.

                           INTERNET SERVICES

    Mr. Regula. What kind of services would that be?
    Ms. Barnhart. You can make a request to receive a copy of 
your Social Security Statement. We do not provide the Statement 
on the Internet, but you may request it.
    We can give you the location, address, and phone number of 
the closest field office. As you and I were discussing prior to 
the hearing, while many people like to do business by phone, 
there are still reasons people need to go into the field 
office.
    We have a benefit eligibility screening tool available on 
the Internet that allows an individual who thinks they might be 
eligible for a particular kind of benefit to fill in some key 
information and see if it is likely they would be eligible.
    Retiring individuals can file a claim for retirement. They 
can sign up for direct deposit, as you mentioned earlier. They 
can change their address. There are a whole host of things they 
can do over the Internet.
    They can also file the basic information for a disability 
claim, but I don't want to overstate that because we are 
working on having a situation where they can actually file some 
of the medical information online as well. We are hoping to 
have that in effect in the next year.

                          ENUMERATION AT BIRTH

    Mr. Regula. I was kind of interested. We just had a new 
granddaughter. I discovered that the hospital takes care of 
filing for a Social Security number.
    Ms. Barnhart. That is very important.
    Mr. Regula. About as close as you are getting to prebirth.
    Ms. Barnhart. That is right. Enumeration at birth is what 
it is known as. This is a preferred way of obtaining a Social 
Security number. My son is 13 years old. When I had him, it was 
not as common a practice. I went into the Social Security 
office to get it. But it is becoming increasingly common. We 
love working withhospitals to make this happen.
    Mr. Regula. So they actually do it? The hospital submits 
the information?
    Ms. Barnhart. The hospital submits the information to us, 
yes.
    Mr. Regula. That is interesting. I didn't realize that.

                   IMPROVING THE ENUMERATION PROCESS

    Ms. Barnhart. In fact, mentioning enumeration, one of the 
things that we are planning to do as a result of the 
recommendations of our Enumeration Task Force, which we created 
after the September 11th tragedy, is taking a closer look at 
what we can do to improve the security of the Social Security 
card and the numbers.
    One of the recommendations that the task force has is, for 
all requests for Social Security numbers for people over age 1, 
to require a face-to-face interview for individuals over age 
12, and to have stricter requirements for children over age 1. 
The idea is that enumeration at birth is obviously the 
preferred method of enumeration in the country, and we want to 
take extra steps when children are not enumerated at birth.
    Mr. Regula. I am curious because, when you make an inquiry, 
one of the first things businesses want is your Social Security 
number. Do you have many instances when this information gets 
abused, where people take advantage of securing Social Security 
numbers of others? It kind of troubles me to hand this out, and 
yet it seems to be a prerequisite to doing business over the 
phone.
    Ms. Barnhart. I think we actually have a real dilemma as a 
nation. I am sure the Inspector General will talk to some 
length later this afternoon about the whole issue of identity 
theft and the security of the Social Security number.
    We have a situation where the Social Security 
Administration maintains and has always maintained--I think it 
has also been the intent of Congress--that the Social Security 
number is not in fact a national identifier. We have said that 
time and again. I think our laws have spoken to that fact 
overtly and simply by implication.
    Mr. Regula. But de facto it is.
    Ms. Barnhart. We have a situation where few, if any, 
documents that we use in the course of our daily living do not 
require a Social Security number--one of the areas, again, that 
we are looking at as a result of the Enumeration Task Force 
recommendations. And, frankly, because of this issue of numbers 
being misused, from now on we will no longer issue a nonwork 
Social Security number for the sole purpose of getting a 
driver's license, because we feel that is an area open to 
abuse.
    Another area is the issue of replacement cards. We have 
situations we are looking at, such as putting flags into our 
system so that when people request multiple Social Security 
cards over time there is some sort of a flag, a warning for us.
    We are having discussions, in fact just yesterday, about 
the implications of multiple Social Security cards and whether 
we should be looking at establishing a threshold of so many 
replacement cards and after that you pay a fee or go through an 
additional hoop. All these things are geared at trying to 
strengthen the integrity of our enumeration process, which is 
very, very important.

                     Opening Statement (continued)

    I was talking about the performance we would have with this 
budget. While we should be able to maintain the workloads that 
I described a few minutes ago, at the same time, meeting those 
expectations is not going to come without continuing stresses 
on the organization. We do anticipate moderate increases in 
workloads over the next 5 years and considerable increases as 
the baby boom generation enters retirement, which basically 
goes back to the point you made about the increases we are 
anticipating in the disability and retirement rolls in the 
future.
    Even with this budget, certain disability and 
postentitlement pending workloads are going to continue to 
grow. The considerable challenges of processing our day-to-day 
workloads and moving ahead on initiatives, and preparing for 
the workload projections of the future, as well as the employee 
retirements that we expect in the next 10 years, emphasize the 
need for the amount that we have requested in this budget.
    Separate and aside from the President's budget, I want to 
discuss for a moment something that I am conducting as 
Commissioner, a commitment that I made during my confirmation 
process and began working on almost immediately. Upon assuming 
the position of Commissioner, just a little over 3 months ago, 
I began conducting what I call a ``service delivery 
assessment.'' The purpose of the service delivery assessment is 
to provide a framework for SSA to plan and budget for future 
delivery of service to the American public. And I will be happy 
to answer more questions about this as I continue my testimony.
    One of the things that is very clear from my work on the 
Social Security Advisory Board, and as I take the reins at 
Social Security, is that responding to the challenges this 
Agency faces is going to require us to rethink how we do 
business and to develop different ways of responding to growing 
workloads and demands that we project.
    One focus of the service delivery assessment is a review of 
all the efforts that are under way in the decision-making 
process. I have to say, as a taxpayer, the amount of time it 
can take to process a disability case--from the moment someone 
calls the 800-number until he or she gets through the court 
system--is unacceptable. I intend to make dealing with the 
processing times and the backlogs in disability one of my 
absolute priorities.
    My goal is to achieve reforms that make our Agency more 
effective and efficient, that improve management controls that 
we have within the Agency, to reduce claimant waiting times, 
and to ensure that only people that are supposed to get 
benefits get them and in the right amount.
    I think all of this becomes particularly important given 
the fact that our disability rolls are projected to rise. There 
is a 30 percent increase predicted in disability claims in the 
future.
    Related to the disability program, another important 
priority is the Ticket to Work Program, which I know Members of 
Congress are familiar with. It was passed into law a couple of 
years ago. President Bush made swift implementation of this 
program a priority as part of his New Freedom Initiative.
    I am pleased to say, the Ticket Program is up and running 
in 13 States. I actually kicked off the program in my home 
State of Delaware on February 6th. Roughly 10 percent of the 
tickets were sent out in February, 20 percent will be sent out 
in April, 30 percent in May, 40 percent in June, and we will 
actuallyhave all the tickets for the first 13 States--what we 
call Phase One--out and in people's hands by the end of June. We have 
two more phases and the program should be completely rolled out within 
roughly the next year and a half to 2 years.
    Regarding program integrity, which is something I know the 
Inspector General is going to speak to, SSA is going to keep 
current with continuing disability reviews and will conduct 
about 2.5 million SSI non-disability redeterminations.
    I am really proud to say that for more than 6 decades SSA 
has served our Nation well by helping to provide economic 
security to the American people. But we face great challenges 
today. We have to prepare for the workloads that we expect. We 
have to meet the public's changing service expectations. I 
don't think there is any question with the onset of the 
Internet and the speed at which we conduct life today, the 
public's expectations for service have changed and are changing 
continually. We absolutely must improve our disability process.
    At the same time, we have to figure out how to replace 
employees who have years of institutional knowledge and 
experience that are so important to operating these complex 
programs.
    As I said, I know the Inspector General is going to be 
testifying later today about SSA's management challenges. No 
one is more aware than I am of the many challenges that are 
facing our Agency. And I assure you, Mr. Chairman and members 
of the committee, that I did not take this job to manage the 
status quo.
    Earlier in my testimony, I talked about our many management 
challenges. Before concluding my testimony, I want to speak 
just briefly about my approach to the challenges that SSA 
faces.
    I believe that courteous, competent and timely processing 
of claims is an integral part of meeting our obligation. But I 
also believe there is another important aspect of providing 
true service to the public, and that is meeting our obligation 
to ensure sound financial management. Both of those, to me, are 
central to providing good stewardship.
    I think the people of America, who fund Social Security 
through their payroll tax contributions and who fund SSI 
through their income tax payments, expect and deserve well-
managed programs. And I think there is also a really strong 
economic incentive for doing so, because in many areas, such as 
our continuing disability reviews, by ensuring that the right 
payments are made to the right people, we reap significant 
program savings.
    The tragic events of September 11th and the reports that 
some of the terrorists had Social Security numbers and cards 
which may have been fraudulently obtained, as I mentioned 
earlier, have brought home the need to strengthen the 
safeguards in our enumeration processes.
    Of course, while we are working on initiatives to improve 
our future capabilities, we are also working day by day to meet 
our ongoing responsibilities to the public. I believe that the 
fiscal year 2003 administrative budget that we have placed 
before the Committee today will provide the resources that will 
help us respond to those challenges.
    I, again, appreciate the opportunity to be here. I will be 
happy to try to answer any questions the Chairman or other 
members might have.
    [The statement of Ms. Barnhart follows:]

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    
                           TELEPHONE SERVICE

    Mr. Regula. Thank you.
    I have only one comment, and that is that my constituents 
have a lot of frustration with the fact that there is only one 
telephone line into the office. I think your 800-number was an 
attempt to speed up the process, but it isn't working out very 
well. You are dealing with a lot of people who are getting 
older. They get a little frustrated by the whole process and 
feel like they are not getting the prompt responses they would 
like. And that is an administrative problem, obviously, and a 
cost problem too.
    Ms. Barnhart. I appreciate what you are saying, Mr. 
Chairman. The 800-number--the whole phone situation--is 
something that our Deputy Commissioner for Operations watches 
on a daily basis. I speak to her almost every day. In fact, I 
spoke to her this morning.
    We discuss things like what the access rate was for the day 
before and how we are doing, and whether we have had complaints 
coming in. We are very sensitive to the need to provide the 
best possible service we can. I believe this year our standard 
is to provide access to 92 percent of calls within 5 minutes. 
Next year, in the 2003 budget, we are moving up to 94 percent.
    Mr. Regula. You are saying that anyone that calls in, using 
the 800-number or the local number, is going to get aresponse 
in 5 minutes?
    Ms. Barnhart. I wish I could tell you it was anyone at the 
local number as well. It is really the 800-number. Let me 
clarify. I know there is often confusion.
    As a former board member of the Social Security Advisory 
Board, I have watched the way the measurement is calculated, 
the change over time. Let me explain what it is today.
    Having access to the 800-number is defined as the 
following: I make the call and within 5 minutes I either have 
accepted the offer to go to an automated menu or am talking to 
a real person to answer my questions. I have made the choice 
which I want. I have been moved to one or another.
    Mr. Regula. You give them an option, then, to get a real 
person?
    Ms. Barnhart. That is right. We do.
    Mr. Regula. That is important.
    Ms. Barnhart. I think that is very important. As someone 
who did not grow up in the Gen X generation myself, I think it 
is particularly important.

                 INTRODUCTION OF REPRESENTATIVE PELOSI

    Mr. Regula. It even frustrates me. I say, ``Dial 9 and get 
God,'' after I have been through the whole list.
    Well, we are happy to welcome our very distinguished member 
of this subcommittee, the whip-elect. That is right.
    Ms. Pelosi. Just plain whip.
    Mr. Regula. That is right. You are it.
    Ms. Pelosi. Thank you, Mr. Chairman.
    Mr. Regula. The first woman to break the gender gap in the 
leadership in the history of the House.
    Ms. Pelosi. That is right.
    Mr. Regula. Remarkable achievement.
    Ms. Pelosi. I know there are those in your family who are 
more excited about that than others in your family.
    Mr. Regula. I don't know if I would go that far.
    My wife is involved in the First Lady's library, and they 
recognize women who are first in their field. So Nancy is on 
the list.
    We are happy to welcome you.

      IMPROVING THE DISABILITY PROCESS AND ADEQUACY OF THE BUDGET

    Ms. Pelosi. Thank you, Mr. Chairman. Thank you for your 
leadership and for being such a wonderful chairman and 
conducting our committee in such a bipartisan fashion.
    I am going to get right to the point, because you did bring 
up one of the issues that was of concern. I know that it is in 
the IG's testimony already.
    I have a concern about how you are going to reach one of 
your goals, which is to talk about redoing the--improving the 
disability process. The length of time that the disability 
claims process takes is presently unacceptable. That is what 
your testimony says. And the IG goes further to say, the second 
challenge is the most difficult. SSA has long struggled with 
redesigning the disability process; the present system by which 
disability claims are considered is so overloaded that it is 
virtually unworkable.
    Mr. Chairman, I am probably one of the only people in 
Congress who has worked at the Social Security Administration. 
Being from Baltimore, Maryland, in my college years I worked 
there in the summer. So my sympathies are there not only 
because of the important work that you do for working families 
in our country, but just because I have watched it closely over 
the years. And many of us in our offices feel the impact; when 
it isn't working at Social Security, it becomes case work for 
congressional offices.
    So we didn't need to read this here, but I am glad there is 
recognition of the challenge that you have.
    Before I ask my question, may I congratulate you on your 
appointment, wish you well in your endeavors, in the challenges 
you face and the ambitious goals that you have set. Good luck 
to you in that.
    Ms. Barnhart. Thank you. I appreciate that.
    Ms. Pelosi. I am concerned because of the staffing. SSA's 
work force has declined 29 percent since 1980 because of 
downsizing, yet over the same period the number of Social 
Security and SSI beneficiaries has grown 31 percent. In 
addition, data for 2001 shows that the average processing time 
for disability is 106 days at the initial level. As the IG 
testifies in his statement, it goes much longer than that just 
at the initial level. Those are appeals. You know that; there 
is no need for me to go into the days.
    The backlog will increase--is projected to increase from 
2003, in addition, to even larger increases than we are 
experiencing in 2001. In total, SSA projects a 35 percent rise 
in backlog claims between 2001 and 2003. As a result, the 
Social Security Advisory Board has found that Social Security's 
current work load has exceeded its administrative resources and 
has urged the Congress to adequately fund the agency.
    Despite the recommendations, the administration's budget 
proposes to freeze the employees and cut overtime pay. Won't 
that make the situation worse?
    Ms. Barnhart. May I respond to the whole of your comment?
    As I indicated, first of all responding to the last part of 
your question, it will make the situation worse. The fact is 
that the budget does maintain permanent staffing at Social 
Security. There is no reduction in the permanent staffing at 
Social Security. As you aptly point out, the reduction is in 
the workyears associated with what we would be able to fund in 
terms of overtime. That is a correct statement.
    We believe, as I mentioned in my opening statement, that we 
will be able to maintain performance in key areas in the 
Agency, but at the same time there will be increases in 
backlogs in certain areas.
    With respect to disability, what I would like to do is take 
a few moments, if I could ask the Committee's indulgence, to 
describe my overall approach to disability.
    First of all, as part of the service delivery assessment 
that I talked about, the very first area we started with was 
disability. What I am doing is having a timeline done from the 
moment someone calls the 800-number until they get through the 
Appeals Council, because that is where our responsibility in 
terms of a claim ends. At that point, it goes to the court and 
becomes subject to the court system.
    I am tracking how long the process should take, ideally. 
What is the best time we can achieve while ensuring quality as 
well? This is not just the fastest we could do it, without 
taking care to make sure we are doing good work, but how long 
should the process take.
    For example, there is a requirement that we allow 60 days 
after a Disability Determination Services initial decision is 
made for a claimant to file an appeal. First of all, let me 
qualify. Many delays are due to problems in the Agency. I give 
this as an example because it is an easy example, not to 
suggest that claimants are the solereason that we have issues 
with backlogs.
    We must allow 60 days according to the law; it is part of 
due process and adequate notice. We would have to build in 60 
days in trying to get to an optimal level of performance.
    My goal is to look at where we are today and to do that 
kind of timeline. Therefore, from the moment someone calls the 
800-number--assuming they get the access in the first 5 
minutes, Mr. Chairman, back to your point--and they get into a 
field office for an appointment, and their claim gets to the 
Disability Determination Services and all the due process and 
so forth requirements are met, how long should it take?
    I have asked this question. I have asked this question of 
Administrative Law Judges. I have asked this question of people 
working in our hearing offices when I was on the Social 
Security Advisory Board, and got very different answers than I 
would have expected.
    Then we will need to calculate what level of resources are 
needed. If we want to be able to offer a certain level of 
service to every claimant who comes in the door, what level of 
resources would it take to accomplish that, making no changes 
in the current system?
    The next part of the service delivery assessment is to make 
changes to the process. For example, we want to make changes to 
disability, so we can have an electronic disability case file. 
That eliminates some of the delays, which are caused by records 
management, looking for a file, the actual folder with a case, 
as it moves through the process.
    The third step in the service delivery assessment is to say 
these are the changes we would recommend, procedural ones, as 
well as maybe policy changes and more elaborate processing 
changes; and then, what would it cost? How could we speed up 
the process working from the baseline we calculated? Then, what 
would that cost?
    That is the context in which I would like to provide and 
present future budgets to this Committee and to your 
counterpart in the Senate. I think it is really important, as 
we look at the resource requirements for the Agency, that we be 
able to measure it against where we are trying to go.
    So that is the first, big, umbrella project I am doing. I 
am also trying right now to figure out how we can begin to 
immediately reduce the backlog of pending disability hearings.
    I have a new Associate Commissioner for Hearings and 
Appeals, and I have a relatively new Deputy Commissioner for 
Disability and Income Security Programs--both very 
knowledgeable individuals. And we are working with our Deputy 
Commissioner for Operations--actually, almost everyone in the 
Agency, quite frankly. I brought many people together in the 
Agency to try to figure out how can we begin to work down that 
backlog. It is critically important that we don't have, as you 
mentioned, the backlog continue to grow over time and the cases 
don't get older and older. The longer the cases sit there, the 
longer the processing times.
    I have already met with the members of the National Council 
of Disability Determination Directors--NCDDD, as it is called--
and had a 2-day meeting at Social Security to begin to examine 
the results from the so-called ``prototype,'' which is a 
prototype for a new way of providing disability claims 
processing. My view is that it is time to work with the sages 
who have been testing the prototype for 5 years--the 
individuals that have the experience--to get us where we want 
to go in terms of reducing processing time, but also ensuring 
proper service. So we have that effort going.
    I also have met with the National Association of Disability 
Examiners, because they are the people on the front lines who 
are doing the work, to find out their views on what we should 
be doing in terms of the prototype.
    The next thing in the line of attack is to sit down in the 
near future and begin to work with the Administrative Law 
Judges and the Judicial Conference to figure out what we need 
to do to do a better job there.
    I would point out one thing that has affected our ability 
to process cases is the fact that due to a case before the 
Merit Systems Protection Board, we were not allowed to hire any 
Administrative Law Judges for over 2 years. Finally we got a 
stay and were able to hire 126 in September, whom I actually 
personally swore in, I think in late November, early December. 
Because of the learning curve for those judges, we probably 
won't start to take full advantage of those 126 until September 
of this year, but they are going to help.

                           ADEQUACY OF BUDGET

    Ms. Pelosi. My time has expired. I want to say, though, 
that is very ambitious in order to live within the restrictive 
budget that you have. As the IG says, the time is ripe for 
meaningful change to the disability process. I wish you luck in 
the proposals you put forth.
    The time will go by fast. We will be here again next year, 
and the backlog will have increased. Without any question, it 
will have increased, and it will continue to increase until the 
end of 2003.
    I just don't see how you are going to be able to do that 
with the budget numbers that you have here that freeze 
employment and overtime--the full-time equivalent and the 
overtime. But you are saying, in your professional judgment, 
you can do the job that needs to be done for the American 
people. Because all of these things are interesting, but in the 
lives of these people coming into our offices, they are 
immediate and desperate and it takes a long time for them to 
get what they are entitled to.
    So I want to make sure that I understand that in your 
professional judgment, this budget recommendation will enable 
you to lessen the backlog and facilitate the disability process 
at the Social Security Administration.
    Ms. Barnhart. I want to be really clear, too, so that I 
don't leave you with a misimpression.
    What this budget will allow us to do is to maintain or 
improve our performance in several key areas. The backlog, as 
you point out, will continue to grow in some areas.
    I am working right now on reducing the pending hearings 
backlog in disability, in other words, the hearings that are 
pending at the Office of Hearings and Appeals. My hope is to be 
able to reduce that number by a significant amount before the 
end of this year. But I can't guarantee that is going to 
happen. I am working on plans right now to try to make that 
happen.
    I don't want to mislead you. That does not necessarily mean 
there will be an absolute reduction next year at this time in 
the disability claims that are pending or in the hearings that 
are pending.
    Ms. Pelosi. If you had more resources, could you do 
thisquicker?
    Ms. Barnhart. I don't think there is any question, if we 
had more resources, we could do things quicker.
    One of the things I feel I should say there is that like 
most everyone else in positions comparable to mine in 
government, I am sure most people will tell you that they could 
do more if they had more resources and we could work down 
backlogs and provide faster service.
    Ms. Pelosi. Thank you, Mr. Chairman.
    Mr. Regula. Mr. Kennedy.

         QUALIFYING AND REQUALIFYING INDVIDUALS FOR DISABILITY

    Mr. Kennedy. Thank you.
    Welcome to committee and congratulations on your position. 
I want to echo my colleague Nancy Pelosi's comments because the 
people that I meet in my office back in Rhode Island are facing 
desperate situations. And many of them, the stories that I 
hear, people who are never able to make it onto disability 
because they never get it and they pass on.
    It is literally, we are putting people in a time line that, 
you know, is for them just unworkable. We can talk about in 
terms of number of days and this and that, but for these 
people, it is life or death.
    And I would just concur with Nancy's last comment, if you 
had more money, could you work down that case load. I thought 
your answer was right, that you could work it down. My Social 
Security office in Rhode Island does an excellent job, but I 
admit that they are over--I have visited them on a number of 
occasions; their case load is overwhelming, and their staffing 
is next to nothing for the case load that they have to meet.
    So it is just, as a practical matter--it seems to me, all 
the best acrobatics in the world are not going to address the 
fundamental problem of time-on-task and the number of people 
you need in order to address time-on-task of getting people 
processed.
    One of the issues that I would like to you address, if you 
would, is the issue of reconfirming whether people should 
continue to have disability or not, and the time and energy 
that goes into that as opposed to the time and energy that can 
go into getting people certified in the first place.
    Ms. Barnhart. I assume you are talking about continuing 
disability reviews.
    The budget that we have before the Committee right now has 
$642 million included in it to process 1.4 million periodic 
continuing disability reviews in 2003. We feel this is a 
critically important area for us, because it speaks to what I 
mentioned in my opening statement, what I consider the dual 
aspect of providing good stewardship and public service to the 
people of America who fund these programs. It is not only 
providing service, as you so aptly point out--which is 
critically important, as oftentimes we are the lifeline of 
people applying for benefits--but it is also making sure that 
the benefits are going to the people who should be receiving 
them.
    Mr. Kennedy. Can I interject?
    I agree with you. But if you measure out, you know, where 
the dollars are going, and you think about this huge case load 
and the number of people who are critically waiting for their 
SSI, and yet we are devoting, you know, nearly $700 million to 
checking on people that have actually made it through this 
arduous process in the first place, just common sense, 
intuitively, if you can make it through all the hoops that you 
all put up to get someone on SSI in the first place--not for 
nothing--but it is not going to be a case where it is a 
gratuitous check to someone.
    When you think about the $700 million that you could spend 
on actually processing people in the first place, as opposed to 
spending all that money, you know--I know it is a favorite of 
many people up here, we have to--abuse and fraud. But anybody 
who can make the SSI benefit in the first place, you know, it 
seems to me, is--what is to be a candidate for Hollywood if 
they can fake that.
    So why is it that we are spending so much money and 
resources and time and energy on that, when effectively our 
dollars are not going to process this backlog of cases that are 
already there?
    Ms. Barnhart. Let me point out a couple things, if I may.
    First of all, the continuing disability reviews are not 
just for SSI; they are all the continuing disability reviews 
that we will do for title II and SSI. I don't have that 
breakout; we can provide it for the record.
    [The information follows:]

                                               VOLUME OF PERIODIC CONTINUING DISABILITY REVIEWS BY PROGRAM
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   Fiscal Year--
                                                         -----------------------------------------------------------------------------------------------
                                                             1996        1997        1998        1999        2000        2001        2002        2003
--------------------------------------------------------------------------------------------------------------------------------------------------------
Title II (Including title II beneficiaries who also are      341,064     428,460     984,142     869,964   1,158,944   1,040,727     802,000     598,000
 entitled to title XVI benefits)........................
Title XVI...............................................     157,381     262,018     407,747     833,450     677,566     689,845     595,000     782,000
                                                         -----------------------------------------------------------------------------------------------
      Total.............................................     498,445     690,478   1,391,889   1,703,414   1,836,510   1,730,572   1,397,000   1,380,000
--------------------------------------------------------------------------------------------------------------------------------------------------------

    SSA became current in processing title II (Social Security) 
periodic continuing disability reviews (CDR) at the end of FY 
2000 and expects to be current with title XVI (SSI) periodic 
CDRs by the end of FY 2002.
    SSA's FY 2003 request includes $642 million to process 
nearly 1.4 million periodic CDRs, which will allow SSA to keep 
current in processing both title II and title XVI periodic CDRs 
as they come due, consistent with statutory requirements.
    Ms. Barnhart. What you pointed to is one of the many 
dilemmas that you face when you are administering a public 
assistance program. I will tell you from my perspective as 
Commissioner, there is no question we want to get the benefits 
to people--the Social Security catch phrase is ``get the right 
benefits to the right people in the right amount of time.'' 
There is no question this is the culture that drives this 
Agency.
    So I look at that as Commissioner. I have worked in public 
assistance programs almost all my life. I certainly want to do 
that. At the same time, I have the Comptroller General who has 
placed the SSI program on the high-risk list from a management 
perspective since 1997. We are going into the fifth year of 
having SSI on the high-risk list. There has been basically no 
progress made in removing high risk.
    Mr. Kennedy. Now, can I interject, high risk to whom? You 
are talking about people dying out there because they have--
they are backlogged. And then we have got an IG who is--
obviously, their job is simply to look at the bottom line and 
make sure all the T's are crossed and I's are dotted, and God 
bless them, that is their job, but we are talking about human 
beings on the other side.
    So it is either life or death on one side or accounting 
principles on the other. It seems to me there is just no 
equating the two.
    High risk for whom? High risk for some auditor who is going 
to have to worry about, well, you know, haven't had enough 
money to check all these things; or high risk to people who are 
losing their lives because they are being put on these 
extraordinarily long waiting lists?
    The point I want to make is philosophical. I appreciate the 
dilemma you are in. But I want to make sure that the two are 
not on parity when it comes to a value judgment, because I 
don't think any human being would value the two equally. And 
again, I come back to the point, if you made it in the first 
place, you know, it seems to me we ought to be focusing more on 
people who need to be on--that haven't made it on, rather than, 
you know, double-checking that group, checking the people who 
are already on there.
    Ms. Barnhart. I actually met with the Comptroller General. 
My Deputy Commissioner and I met with the Comptroller General 
last week to discuss how we could remove the high risk 
designation from SSI. I will tell you, from the passion of your 
comments, I should have had you in the room with me.

           GOVERNMENT PENSION OFFSET (GPO) AND WOMEN'S ISSUES

    Mr. Kennedy. Call me up any time. I will send you my 
Director of Constituent Services in Rhode Island, who will 
absolutely carry the case for me, even better than I can do for 
you.
    Just in conclusion, the GPO, Government Pension Offset for 
those who are older, tend to be older women with modest public 
pensions. Can you explain for us--I know that a complete 
overhaul of GPO is obviously, seemingly infeasible with all the 
financial constraints that you are facing, but when you look at 
the victims of the GPO, especially those who are in the lower, 
you know, incomes, can you explain what you are doing for those 
victims of the GPO who are on the lower rung?
    Ms. Barnhart. To be honest, in all candor, I have not taken 
a look at those specific policy issues myself. I have been here 
3 months in terms of making recommendations for change. Those 
issues will be the subject of a hearing that is being held by a 
Ways and Means Subcommittee on Thursday of this week. And 
members on that Committee have some ideas about women's issues, 
Social Security issues affecting women in general.
    I would say generally my perspective is this: Some of the 
proposals that are being considered in what we call women's 
issues, that wide category of issues, are lower-cost items that 
incrementally deal with this issue. Other proposals are much 
more comprehensive in nature and have prospectively much 
greater budgetary effects.
    My view is that as we look to deal with those situations, 
going back to a comment that the Chairman made during my 
opening statement, I think we have to look at them in the 
context of the effect on the trust funds. As we move ahead to 
discuss the future of Social Security, we need to look at what 
we want to do with benefits, what we want to do with payments--
the whole thing at the same time.
    And maybe that is the appropriate place to deal with some 
of those societal issues.

                       SSI HIGH RISK DESIGNATION

    Mr. Kennedy. If I could indulge you for a minute on the 
point, because I can't get over it: On this high risk 
designation that you have, you know, for disability, for the 
IG, if we can work on something that would help you address 
that so that you don't have that pressure coming down on you, 
and you might have more flexibility put in the resources where 
they are really needed, I would think that, you know, this 
committee would be interested in hearing----
    Mr. Regula. The IG will be on next, so you will have a 
chance to question him.
    Mr. Istook.

            POTENTIAL CONFLICTS WITH PRICEWATERHOUSECOOPERS

    Mr. Istook. Thank you, Mr. Chairman.
    Commissioner Barnhart, I have two topics I want to bring 
up. One I hope will be brief and the other is perhaps more 
significant. But the first one I want to bring up, certainly 
there has been a lot of public and government attention to 
accounting standards with what has happened with Enron--
especially the conflict inherent when one organization is 
performing both accounting and consulting services.
    It came to my attention, for example, that there is such a 
situation within Social Security--it wasn't created that way 
because, I believe, it came about because of mergers of 
accounting firms--but that PricewaterhouseCoopers is currently 
contracted to do both auditing and consulting work with the 
Administration. Can you tell us what, if anything, is being 
done, or you feel needs to be done, about this or any other 
potential conflicts that could cause people concern regarding 
the protection of their Social Security monies?
    Ms. Barnhart. Thank you very much. I think the whole area 
of integrity of management has always been important. And 
perhaps the heightened visibility of what occurred with Enron 
brings it even more to the forefront for all of us who are 
managing programs, particularly in the public arena.
    I will make a couple of comments, if I might.
    I was aware of your interest, Mr. Istook, in this matter 
prior to coming here and learned, in fact, that the Social 
Security Administration does have contracts with 
PricewaterhouseCoopers just as you explained, based on changes 
in their corporate structure. This is how we got to that 
situation.
    I also would say I have known and worked, off and on, with 
Mr. Sopper for over 20 years. I was very confident when you 
asked that question that we were going to be on very sound 
footing, because I am very much aware of the absolute 
dedication with which he approaches his job. I have been 
assured that we have a situation in place where once we 
realized the PricewaterhouseCoopers merger had taken place and 
we were going to have the potential conflict, we made very 
stiff requirements and built firewalls specifically related to 
what they could do with working papers. The working papers can 
absolutely not be shared between PricewaterhouseCoopers 
auditing and consulting teams at SSA unless we approve it, and 
we have approved nothing.
    What I will do is ask Mr. Sopper to speak to not only the 
details on that situation, but how it has affected----
    Mr. Istook. Briefly on that, because I have another matter 
that I definitely want to get to; but what I really want to 
know is whether, in the judgment of the Administration, that is 
a circumstance that can be permitted to continue or not.
    I realize you have all sorts of internal safeguards, 
Chinese walls, as they may be called and so forth, but it still 
comes to the bottom-line question of whether you consider that 
to be an acceptable circumstance or not, at least once the 
current contracts expire.
    Ms. Barnhart. On that point, may I make this comment: This 
is a matter that really was just brought to my attention, quite 
frankly. There have been many things for me to get a handle on 
at the Agency in the 10-plus weeks I have been there. I will 
personally review the situation with my staff, as I have 
started to do in preparing information for you. If I could have 
maybe 30 days to get back to you to respond to what the 
effect----

                            SSI OVERPAYMENTS

    Mr. Istook. I am not asking for any knee-jerk response to 
it. I realize it is a study situation. And frankly there may be 
some separation that is done internally by the company 
involved. I understand they merged certain things and they may 
split them off again. I wanted to make sure that you were 
looking into that.
    Let me mention the other topic; this relates to SSI, and I 
am taking information from the Social Security Advisory Board's 
report that was issued 2 months ago.
    According to that, SSI overpayments in the most recent 
fiscal year that they have this compiled for, the overpayments 
in SSI were $2 billion a year, and that is out of a universe of 
$32 billion a year in benefit payments. The underpayments were 
$440 million by their measurements.
    Furthermore, not only were the overpayments in SSI, $2 
billion a year, one-sixteenth of the total payments, but the 
ratio of overpayments was two-and-a-half times higher than what 
it was 10 years before, in fiscal year 1990.
    What has happened to cause such an explosion in the amount 
of taxpayers' money that is going out, $2 billion a year in 
overpayments in SSI, a two-and-a-half-fold increase over the 
period of the last 10 years? What is going on there? What is an 
acceptable level?
    I know you can't be perfect, but what is an acceptable 
level?
    Ms. Barnhart. Thank you very much. I would like to make 
several comments.
    You asked what is an acceptable level. I am sure from the 
standpoint of taxpayers, myself as a taxpayer, no error is what 
most people would say is acceptable. From my experience in 
managing the public assistance programs, the TANF program, 
working in food stamps and so forth, the tolerance levels that 
have been set by Congress on those programs are 4 to 5 percent. 
In fact, in SSI right now we are achieving somewhere around the 
93 percent accuracy rate, or a 7 percent error rate.
    It is actually 93.6 percent, I am told, which is 
essentially a 6.4 percent error rate. The problem is, SSI is 
such a huge program. The expenditures are over $30 billion a 
year. As is the case with anything related to the Social 
Security Administration, a small percentage ends up being large 
dollar amounts, as you so correctly point out.
    Mr. Istook. The advisory commission's report did not see 
this as an acceptable level.
    Are you telling me that this--whether you express it as a 
6.5 percent error rate or as a $2 billion a year error rate, 
are you saying you do consider that an acceptable level?
    Ms. Barnhart. No. I was just giving you a baseline of where 
we are right now. In fact, our goal in 2002 is to move the 
accuracy rate to 94 percent and in 2003 to push it to 94.7 
percent.
    When I had the meeting with the Comptroller General last 
week, I explained that the overpayment amount starts out at $2 
billion, but we actually recover a substantial portion of our 
overpayments, over $600 million.
    Mr. Istook. So it ends up being $1.4 billion or 
thereabouts.
    Ms. Barnhart. When you take in overpayment recovery and 
other factors, we actually end up somewhere around $1.3 
billion. That is still a lot of money.
    Mr. Istook. What has happened over recent years? We 
certainly hear people expressing concerns with the inordinate 
amount of time it takes on disability payments and saying that 
people aren't getting in the system.
    Yet at the same time we have a slow system--evidently it is 
moving maybe too fast in some cases--the rate of errors has 
gone up. It is 250 percent now of what it was just a few years 
ago. This is not an historical error rate, according to the 
Advisory Board report; this is something that has increased by 
a magnitude of two-and-a-half times.
    What has happened that it has gone up so dramatically?
    Ms. Barnhart. There are several things that have affected 
the increase. For one thing, benefits have gone up, and there 
are more people getting SSI and----
    Mr. Istook. They said it is the rate that is up, not the 
dollar amount.
    Ms. Barnhart. The other thing I would say is, as you know, 
SSI is a very complex program. There are some things provided 
for in the law that actually almost build in a certain 
percentage of error.
    I can speak to you from my perspective about what 
contributes to comprising the error today, things like 
reporting work expenses on a timely basis before checks are 
issued. I would like to say on that point, we are getting ready 
to implement a telephone touch pad technology whereby SSI 
recipients will be able to code in over the telephone the 
amount of their income.
    We are piloting----
    Mr. Istook. That sounds like it is very peripheral. Because 
certainly SSI, the payment rates were not up two-and-a-half 
times over that same period, yet the overpayments were up two-
and-a-half times. Something has been going on regarding the 
manner in which business is conducted, the way in which things 
are monitored. Somethinghas been going on that produces that 
dramatic increase in the overpayment rate, which is dramatically 
expensive as well. You may not--you are fresh on it, you may not be on 
top of it there, but to me, it sounds like we would like to get some 
better answers for the record that are very explicit.
    Ms. Barnhart. I would be happy to do that.
    I can't precisely explain what comprises the current error 
rate. To address the point you just made, I have not had an 
opportunity yet to look and compare how we are doing today 
versus 10 years ago. But I would more than happy to conduct 
that kind of analysis.
    Mr. Istook. Perhaps a year by year might be revealing also.
    Ms. Barnhart. Okay. I will be happy to do that.
    [The information follows:]

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    
    Mr. Istook. Thank you, Mr. Chairman.
    Mr. Regula. Mr. Sherwood.

                         SSA'S COMPUTER SYSTEMS

    Mr. Sherwood. Thank you, Mr. Chairman.
    Commissioner Barnhart, welcome. Nice of you to be here. You 
know, there is no greater public trust than the proper 
stewardship of Social Security, and we appreciate your efforts. 
I would like to know what sort of an organization you 
inherited.
    In other words, tell me about your computer system. Do you 
have real-time computing? In other words, when people call in, 
you have folks that will answer the phone now, but when we call 
in with a question, can that person on the Social Security end 
of the phone work up--have a computer screen in front of them 
with real-time information?
    Ms. Barnhart. I think what you are speaking to is the title 
II redesigned system that was proposed some time ago.
    Mr. Sopper is emphasizing that our systems are online, real 
time.
    The one thing I would like to point out is, when you are 
talking about people being able to file claims and those kinds 
of things, we don't have everything electronic yet--if that is 
part of your question.
    Mr. Sherwood. No, that is not the thrust of my question. I 
mean, we have all the folks who want to call in and get 
information. Do you try and by nature of your computer screen 
answer their question right then, as opposed to the IRS taking 
2 or 3 days in replying?
    Ms. Barnhart. We do try to. It would depend on the nature 
of the question. I have actually visited several of our centers 
where most of our 800-number work is done. The employees who 
work in the centers, yes, to the extent possible, they do try 
to answer the question. But obviously they are not able to for 
every single case. In some cases, the calls are referred to the 
field offices.
    Mr. Sherwood. Because, of course, the thrust of my 
information, that some of the other people have asked about, is 
the work load and the amount of time it takes and time-on-task 
and more people and all that.
    I am trying to determine if the system is so designed--and 
you didn't design the system, I understand--so that we can do 
it efficiently. So many of the commercial enterprises today--I 
took my daughter to set up a new apartment a few months ago in 
college, and we went to a local store and had to buy lots of 
things. And being old fashioned, I was ready to pay for it and 
found out you could get a 15 percent discount for getting a 
credit card. They gave it to me that quickly. And they had a 
wonderful computer record and could access everything.
    I am wondering, in the Federal Government, if we are 
getting there.
    Ms. Barnhart. I think we are getting there.
    I certainly appreciate coming in as Commissioner. Because 
of this Committee's support in the past, it is my understanding 
we have the ability not only to receive current funds for our 
computer and system enhancement activities, but also to be able 
to reach back, take unobligated, prior-year funds to put 
forward to use for continued systems development. I think that 
having flexibility is critically important as we move ahead.

                        SERVICE TO BENEFICIARIES

    Mr. Sherwood. It has been my experience since I have been 
in Congress that all of our offices get a great deal of 
constituent service work with Social Security concerns and with 
you. Yet, I have found that when we take a case and work it 
with the Social Security Administration, we get wonderful 
cooperation and what always seems to me to be logical results.
    What do you think the gap is between the people doing it 
without the congressional office's attention and with the 
congressional office's attention?
    Ms. Barnhart. I really think, sir, it is more a matter of 
volume than anything else. My experience, when I worked for 
Social Security in the 1980s, as a member of the Advisory Board 
for the last 5 years, and now as Commissioner of Social 
Security is that the Social Security employees make no 
distinction between who calls for help. They are just as 
dedicated, no matter who is on the other end of the line.
    I think the difference is in the units that we have dealing 
with requests. We have, obviously, Congressional Affairs units 
that deal with the requests coming in from Members. So my guess 
is, the volume there is substantially less than the volume 
coming into a typical field office; and it is really more a 
matter of time delay than anything else.
    I am confident the quality of work that is provided would 
be the same.
    Mr. Sherwood. Well, the quality is excellent when we call 
in. It is wonderful how--you know, how easily sometimes some of 
those things that people are very upset about are resolved. I 
would just have to say that in light of some of the previous 
testimony here that there are some of us who are happy that you 
are diligent in making sure that those new claims are proper.
    Ms. Barnhart. Thank you very much.

                     TELEPHONE SERVICE (CONTINUED)

    Mr. Regula. Well, it is encouraging. You get results at 
least. I know I have had the same experience.
    Our one problem is they have only one phone line, and 
people get very frustrated because they can't get through. Then 
they call us and want us to get through for them. So I don't 
know whether it is a money problem or--probably that ispart of 
it.
    Ms. Barnhart. We are actually taking a look at that 
specific issue in terms of people trying to access the field 
offices. One of the pilots that we have operating now is in 
Region 3, I think; there are five offices, three in Maryland 
and two in Virginia. I wish there were some in Ohio, but there 
aren't.
    Mr. Regula. It is an opportunity though.
    Ms. Barnhart. I realize that. And those pilots work as 
follows: Someone calls into a field office and, rather than get 
a busy signal, they are offered the opportunity to be 
redirected to the 800-number to have their issue dealt with. 
And 20 percent of the people who are participating, callers who 
are in the areas where the pilot takes place, are opting to go 
to the 800-number.
    We are not getting complaints. We are doing a customer 
satisfaction survey there so we can find out how the citizens 
who are using this service feel about it. We think that is an 
improvement.
    It does not, I realize, address your concern totally, by 
any means. I can simply tell you that through my service 
delivery assessment--I said I am going to start with 
disability--I also intend to look at the phone service. I 
intend to look at how Social Security benefits are provided. I 
intend to look at how SSI benefits are provided, do that same 
kind of analysis in terms of what our level of service should 
be.
    There are some people who argue that our standard for the 
telephones is not high enough. They compare it to the private 
industry standard, that providing access, 94 percent in 5 
minutes, is not good enough because the private sector has a 
much different standard. We are looking into all of those 
things.
    I think one of the things is we look to the baby boomers 
retiring, and I just don't think we are as polite as my parents 
are. And by that I mean my parents are used to writing 
letters--and I am thankful that I have both my parents still 
with me--or maybe making a phone call in a really urgent 
situation, and waiting very patiently for a response.
    The baby boom generation grew up and saw Xerox machines, 
fax machines, pagers, cell phones, now Palm Pilots and who 
knows what is next. But the fact of the matter is, our demands 
as a generation as we move toward retirement, I think, are 
going to be much greater than the demands for service that we 
have from today's retirees.
    Mr. Regula. You are planning ahead. In another 15 years you 
are going to get the first wave of baby boomers or before that, 
I assume?
    Ms. Barnhart. You are absolutely correct.
    Mr. Regula. Any further burning questions? We have the 
Inspector General, so we need to move on.

                       FUTURE OF SOCIAL SECURITY

    Mr. Kennedy. Thank you, Mr. Chairman. With the debate over 
the three options, I think it is--maybe it is four options--for 
the future of Social Security as a policy matter, it is 
estimated that it is going to cost a trillion dollars to adopt 
some of the changes that the Administration is calling for in 
terms of individual trust accounts.
    Could you enlighten us a little bit about what your 
perspective is in light of the fact that we are running such 
big deficits?
    Ms. Barnhart. In all candor, I did not come here today 
prepared to discuss it. I am not an economist. My focus in the 
first 3 months has been to work on trying to get the 
administrative and infrastructure side of the Agency in hand.
    I obviously am very concerned about the long-term financial 
stability of the program. I have a 13-year-old son. All of us, 
as part of our jobs, need to be concerned about this. As the 
Chairman said earlier, Social Security is our most important 
social program in this country.
    Where I am in terms of looking ahead to that future 
financial stability is starting to look into more detail at the 
various approaches that the Commission to Strengthen Social 
Security has issued. Our actuary's office at Social Security 
provided a very extensive analysis, which I would be more than 
happy to provide for the record.
    Mr. Kennedy. I would certainly be appreciative. I would 
like to get briefed and educated on what your actuary is 
telling you.
    Ms. Barnhart. I would be more than happy to provide that.
    [Information submitted was too lengthy to be printed and is 
available in Committee files.]
    Ms. Barnhart. I think it is really important, in light of 
your comments earlier and your concern, for example, for the 
women's issues that as we consider these things, we look ahead 
to the long-term stability of the program--the fact that we do 
have a situation where the trust fund is only going to be able 
to pay 73 percent of benefits by the year 2038 unless some 
action is taken.
    I think it is important that we do, as the Commission 
report urges, engage in a year of debate and view the 
Commission's options as various approaches. They did not single 
out one that they thought should be pursued. We need to look at 
the pluses and minuses.
    There are many Members of Congress that I have talked to 
over the last couple of months who have their own proposals, 
and I think we need to look at all of those proposals.
    Mr. Kennedy. Mr. Chairman, maybe we could encourage the 
Commission to come back at some point and brief more than just 
myself. More members of the committee might be interested in 
this.

                          SSA DOES A GOOD JOB

    Mr. Regula. We have had many commissions. And they have 
done a great job of identifying the problem, but solutions 
becoming more challenging.
    Thank you very much for coming. We appreciate your good 
job, and you bring a desire to improve the service as much as 
possible. I think we, as Members reflecting the public, dofeel 
there is a real effort made to provide service. Forty-five million 
people is a lot of potential critics; I am not reluctant to say so.

                           PRESIDENT'S BUDGET

    Ms. Barnhart. Thank you, Mr. Chairman. It is my first 
appearance before the Committee; I appreciate all the support 
that I heard for the Social Security Administration and its 
programs today.
    Obviously, as the Commissioner, as I present this budget 
request to you, I am very concerned about being able to meet 
our responsibilities in this Agency. At the same time, I 
understand and fully support the President's priorities in 
terms of the war against terrorism and the homeland security 
issues that we are all very much concerned about; and for that 
reason, was very heartened by the fact that the Social Security 
Administration received almost a 5 percent increase, which was 
higher than many other domestic agencies. I am hopeful that you 
will support that increase for us.
    Mr. Regula. I think you come under the umbrella of homeland 
security. We were very nice to you. We didn't ask you about the 
idea of taking part of the Social Security payments and putting 
them in private investment.
    Save that one for another day.
    Ms. Barnhart. Thank you, Mr. Chairman.

                INTRODUCTION OF SSA'S INSPECTOR GENERAL

    Mr. Regula. Mr. Huse, we are happy to have you here today. 
You tell us the concerns that you have. We have a few questions 
for you. You can go ahead with your statement. If you will 
summarize for us, your full statement will be made a part of 
the record.

                           Opening Statements

    Mr. Huse. Thank you, Mr. Chairman. I will just make brief 
oral remarks, in view of the hour.
    It is a pleasure to be here today to discuss the top three 
management challenges facing the Social Security Administration 
(SSA) as Congress considers the Federal budget for fiscal year 
2003.
    Certainly there is no shortage of challenges facing Social 
Security, as have you heard. We published our list of SSA's top 
ten management challenges in our most recent semiannual report 
to Congress, and the President's management agenda identified 
similar challenges for fiscal year 2002. Certainly there is no 
better context in which to consider these challenges than in a 
discussion of resources for 2003.
    Times change quickly and the Social Security Administration 
is faced with more and greater challenges than ever, while at 
the same time it is being asked to meet these challenges with 
fewer and fewer resources. Budgetary restraints, together with 
homeland security and program integrity issues, have forced SSA 
to take a long and difficult look at their outstanding record 
for service delivery.
    While SSA is justifiably proud of its customer service 
record, budget constraints and broader challenges are now 
forcing the Agency to take a hard look at the placement of the 
fulcrum as it attempts to balance service and stewardship. I 
don't envy Commissioner Barnhart the decisions she faces as she 
is forced to do more with less.
    Whatever resources are ultimately provided by Congress, 
there are three unmistakable areas that pose the most daunting, 
and most important, challenges to Commissioner Barnhart and 
SSA. These are:
    Reducing improper payments;
    Improving the disability determination process; and
    Protecting the integrity of the enumeration process, the 
process by which Social Security numbers are issued and 
protected during the life of the number holder and beyond.
    I will touch very briefly on each of these three 
challenges.
    The first is payment accuracy. In fiscal year 2001, SSA 
issued $456 billion in benefit payments to 52.4 million 
beneficiaries. Even the slightest error in the overall process 
can result in millions of dollars in overpayments. Working 
together with SSA, we have made great strides in reducing all 
benefit payments to prisoners, and Supplemental Security Income 
payments to fugitive felons over the past several years. These 
have been priorities.
    These efforts continue today, but erroneous payments, 
including those to deceased beneficiaries, students, and 
individuals receiving State Worker's Compensation benefits, 
continue to drain the Social Security Trust Fund even as 
solvency becomes an overarching issue.
    The second challenge is perhaps the most difficult. SSA has 
long struggled with redesigning the disability process. The 
present system by which disability claims are considered is so 
overloaded that it is virtually unworkable.
    On average, it takes SSA 107 days to make an initial 
determination on a claim. Worse still is the appeals process, 
which despite numerous failed attempts at improvement, is still 
so backlogged that a claimant who files a request for a hearing 
must then wait an average of 307 days for an Administrative Law 
Judge decision and 439 days for a decision from the Appeals 
Council.
    These never-diminishing backlogs require a visionary 
approach to break through deeply embedded bureaucratic 
processes to bring about true change. Whether it is the 
elimination of one or more layers of appeal, a sweeping 
streamlining of the hearing process, government representation 
at disability hearings, or a combination of these and other 
factors, the current system is one in which all parties lose--
claimants by virtue of unconscionable delay, SSA by virtue of 
expending enormous resources on each claim. Under a restrictive 
budget, the time is ripe for meaningful change to the 
disability process.
    Finally, the lessons of the last 5 months have been the 
hardest to learn. We have long been aware that failure to 
protect the integrity of the Social Security number has 
enormous financial consequences for the government, for the 
people, and for the business community. We now know that our 
shortcomings in the enumeration process can have far graver 
consequences than previously thought.
    Under no circumstances can we permit the Social Security 
number to be used by those who wish to camouflage their 
criminal activities against the United States, which means SSA 
can no longer afford to operate from a ``business-as-usual'' 
perspective. Whatever the cost, whatever the sacrifice, we must 
protect the number that has become our national identifier, the 
number that is the key to social, legal, and financial 
assimilation in this country.
    Each of these challenges--payment accuracy, the disability 
process, and enumeration--presents Commissioner Barnhart with a 
choice between increased service delivery, which means speed, 
and increased accuracy, which means security and stewardship. I 
know that this Commissioner recognizes that true service 
delivery has two components, speed and accuracy. There is a 
balance to be struck between the two, and for all of the 
reasons I have discussed, we have reached a time where striking 
that balance properly ismore important than ever.
    I look forward to working with Commissioner Barnhart to 
help Social Security meet these and other challenges. Thank 
you.
    [The statement of Mr. Huse follows:]

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    Mr. Regula. Thank you. I will defer my questions.
    Mr. Kennedy.
    Mr. Kennedy. Well, following up on the questions I was 
asking the Commissioner, maybe since you were there, you heard 
the line----
    Mr. Huse. I have been waiting for my turn in the barrel.

                     CONTINUING DISABILITY REVIEWS

    Mr. Kennedy. So maybe you could address that. I mean, I 
think that we are all concerned about felons having Social 
Security checks and people that are obviously--the most gross 
abusers of the system. But for those that are clearly disabled, 
that we are spending so much time on trying to reevaluate 
whether they are able enough to no longer be on Social Security 
or not, can you tell us just about how you--where you break 
down the roll of where you put your resources?
    Mr. Huse. I am in a lucky place, Mr. Kennedy, because I 
don't have to make those decisions. All I get to do is 
criticize or be the objective observer.
    In the context of the continuing disability reviews, these 
provide an opportunity for Social Security to assess medical 
improvement, which then adjusts the benefit or continues the 
benefit and keeps those funds available for others who are 
coming into the system, if improvements occur.
    My belief is that there is a considerable return on 
investment for that activity that the Congress has recognized. 
For FY 2000, SSA reported savings of ten dollars for every 
dollar invested in CDRs. That shows how robust that activity is 
in terms of what we call ``stewardship.'' I think it is a 
responsibility we have.
    Besides the needy--and our service dimension is unrivaled 
in government, and our commitment to it--we also have a 
responsibility to the taxpayer on the other side who provides 
the means to dispense these benefits. So my point is that we 
must strike a balance between service and stewardship.
    Mr. Kennedy. If it is so cost effective in terms of the 
dollars that are returned, then it would seem to me that we 
would want to have allocated more money for your budget, 
because it would be producing more money for us to be able to 
address these backlogs.
    Mr. Huse. I agree. There is a true return on investment. I 
think at the point that starts to drop off, you reconsider. I 
don't have those figures here today. But I know that certainly 
the agency and our office would be glad to speak to that 
further.
    [The information follows:]

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                           ANTI-FRAUD EFFORTS

    Mr. Kennedy. How much of your budget is allocated to the 
antifraud campaign, and how many FTEs are assigned to this 
activity?
    Mr. Huse. The budget of the Inspector General's office?
    Mr. Kennedy. Yes.
    Mr. Huse. I would almost have to answer glibly that 100 
percent of our budget is devoted to anti-fraud because that is 
our business.
    Specifically, we break out between audit activities and 
investigative activities. Our investigative activities probably 
involve about two-thirds of our appropriation; then the audit 
activities, a third. Our appropriation for fiscal year 2003 is 
$83 million, so it is----
    Mr. Kennedy. The 8 million increase that the Administration 
is requesting, what is that going to?
    Mr. Huse. The specific increase for us is to get more 
resources, I believe 22 [Clerk's note: Later corrected to 13.] 
full-time equivalents, to devote to what we call cooperative 
disability investigative teams, whose focus is to prevent 
payment of benefits to those people who are obvious cheats. 
That turned out to be an extremely viable opportunity for us in 
its pilot stages over the past 2 years. Our return on 
investment there is close to $10 for every $1 invested in the 
activity. Of that, $6 represents direct SSA program savings.
    Mr. Kennedy. Sounds pretty impressive, Mr. Chairman. Maybe 
we could get some money out of that. A return like that sounds 
too good to be true.
    Thank you very much. I hope that we can try to put the 
money where it can do us the most good, and we certainly need 
it in the program.
    Mr. Huse. Actually, I have to correct myself. Staff said 
that most of the 22 [Clerk's note: Later corrected to 13.] FTEs 
are for fugitive felon activities, for those people who are 
fugitive felons who are on SSI. That too has a huge return on 
investment.
    The CDI expansion is a dream unfulfilled at this point, but 
we continue to present it.
    Mr. Regula. Mr. Sherwood.

                     HOMELAND SECURITY AND THE SSN

    Mr. Sherwood. Thank you.
    Welcome. Your three goals are very interesting to me. You 
know, payment accuracy, every businessman thinks that is sort 
of a given, and sometimes in the government, we don't pay as 
much attention to that; it is more a question of getting the 
benefits out. But it is obvious to me that every time we pay a 
benefit to somebody that doesn't deserve it, we are 
shortchanging the fund on its long-term solvency for people who 
do deserve it.
    So your efforts there are certainly well received.
    What can you tell me, what have we changed since 9/11 to 
protect the integrity of the Social Security number? I 
mean,before we thought of that as a business and a solvency and a 
Federal money issue. Now it is a life-and-death terrorism issue. And 
the ability of people to get false Social Security numbers, therefore 
have them on a passport, et cetera, et cetera, how are we coming?
    Mr. Huse. Actually, as Commissioner Barnhart stated in her 
testimony we have made some significant progress; and there are 
two levels I would like to address in my answer.
    The first is, within SSA itself, immediately following the 
events of September 11th, Acting Commissioner Larry Massanari 
impaneled an Agency emergency work group to look at the 
totality of the enumeration business process at Social 
Security, to find ways that we could work within the existing 
system to fix it, strengthen it. And this work group, working 
really around the clock since then, has produced a number of 
adjustments to our process that Commissioner Barnhart has 
implemented since 9/11, the most significant one concerning the 
use of nonwork Social Security numbers. I know that sounds 
surprising, but because of one of the many migrations of uses 
for the Social Security number over time, SSA was in the 
practice of issuing nonwork numbers to noncitizens who needed 
those numbers in order to get a driver's license in many of our 
States.
    Commissioner Barnhart has notified the governors of those 
States of her decision, and she has stopped the practice of 
issuing those numbers. These numbers, by the way, were the key 
opportunity for those individuals wanting to come in the United 
States and live underneath our law enforcement radar.
    So that, plus some other administrative changes in terms of 
how with this change the agency stores and retains records for 
all of these transactions where people are enumerated as 
adults, we have strengthened the process within Social 
Security.
    The Subcommittee on Social Security in the Committee on 
Ways and Means has legislation pending that would give us some 
new tools to help us in this endeavor. The key points include 
regulating the uses of the Social Security number outside of 
what is absolutely necessary. We realize you can't put a lot of 
these uses back in the box, like we thought we might be able to 
do, but at least we can restrict some of these uses going 
forward. The legislation would also provide for administrative 
penalties besides the criminal penalties that are already 
present--so that we would be able to fine people who misuse the 
Social Security number in a civil money penalty context. The 
legislation would also help regulate the way Social Security 
number information is aggregated and sold and moved in commerce 
for those numbers that are kept on people who have died.
    All of which are ways people now use to defeat merchants 
and banks and the government in terms of identity fraud.
    So those are things we have done.

                      SSNS OF DECEASED INDIVIDUALS

    Mr. Sherwood. We have a system, is there a connection in 
this country between the issuance of a death certificate and 
the cancellation of a Social Security number?
    Mr. Huse. There is a program where the funeral homes are to 
notify Social Security on the receipt of a death certificate. 
Where we run into problems is, of course, where someone is 
buried without benefit of an undertaker or a funeral home, and 
that happens.
    But there is no legal requirement to do that; it is a 
voluntary program.
    Mr. Sherwood. Isn't that a great loophole?
    Mr. Huse. It is. The legal burden is on Social Security, 
however, to amass all of these records each year as deaths are 
reported. By law, they issue this data to the Department of 
Commerce, which sells this death register to interested 
parties.
    Obviously, government at the local, county and State levels 
would find this of interest to look at to take people off of 
benefit rolls and so forth. Businesses certainly need it to see 
if they have account holders that are deceased. For lots of 
reasons there are good purposes to this, but it also can be put 
to nefarious purposes.
    So this is an area that we are looking to strengthen, 
protecting the numbers of those who have died as well as those 
who are alive.
    Mr. Regula. Following up on Mr. Sherwood, I notice in your 
testimony you said you create a master file of the Social 
Security numbers after the number-holder's death.
    This file is offered for sale to the public?
    Mr. Huse. Yes.
    Mr. Regula. Why would that be necessary?
    Mr. Huse. Again, there are commercial uses for the Social 
Security numbers of deceased individuals. If you are in the 
banking or insurance business or you use this to determine 
people who are deceased and are no longer account-holders.
    Mr. Regula. Wouldn't this lend itself to people who want to 
get these numbers and use them for nefarious purposes?
    Mr. Huse. Absolutely. There isn't a day that goes by that 
somewhere on the news media--even last night NBC News had a 
story on identity fraud. Identity fraud in this country, for 
the most part, has one common piece, and that common piece is 
the misuse of the Social Security number. It is a part of all 
of it. So that these numbers, as they are collected into these 
databases, are valuable to people who want to use them for----
    Mr. Regula. What if you were to allow--say a bank wants to 
do a credit check or whatever, allow them to call in; but not 
actually publish numbers in a list that is for sale. It seems 
to me, that is just an invitation for fraud.
    Mr. Huse. It is. And actually I am not certain whether it 
is pending legislation, but I know that there is a proposal to 
allow at least the financial industry to have real-time checks 
of Social Security's verification of numbers database. That is 
not law yet, but that is something that is being discussed; and 
it seems, going forward, that that may not be a bad idea.
    Each one of these steps, though, as they are taken by the 
government--just as, de facto, we call the Social Security 
number our ``national identifier,'' we are making it less our 
de facto national identifier and more our true national 
identifier when we add these as business services that the 
Administration provides.

                       OVERUSE AND MISUSE OF SSNS

    Mr. Regula. It seems to me maybe we have reached a peak of 
allowing the numbers to be used. I know, in Ohio, they no 
longer put them on driver's licenses. There was a time when it 
got stuck on almost everything.
    But I had a complaint with the phone company the other day, 
and they wanted my Social Security number. I said, wait a 
minute, what has that got to do with your phone service?
    But it is an easy thing for companies to use that.
    Do you get people reporting fraud to you? Is that one of 
the sources of leads?
    Mr. Huse. Absolutely. We get thousands of reports of fraud 
a year. In fact, the bulk of the fraud that is reported to us 
is about Social Security number misuse. Much of it, we really 
don't have the resources to deal with, and we report it to the 
Federal Trade Commission which, by statute, collects that data.
    I might add a point, on that death master file, the reason 
Social Security has to do this is because of a Freedom of 
Information Act case that went all the way to judgment in the 
courts. That was what was ordered.

                         THE DEATH MASTER FILE

    Mr. Regula. In other words, Social Security numbers are 
subject to Freedom of Information requests?
    Mr. Huse. The death master file became an issue in a 
Freedom of Information Act request. As a result of the court 
settlement, Social Security has to provide this information to 
all requesters and issues it annually to the Department of 
Commerce for dissemination to the public.
    Mr. Regula. Seems to me that could give rise to a lot of 
abuses.
    Mr. Huse. There is no doubt.
    Mr. Regula. Numbers become more and more accepted as almost 
a national identity number.
    Well, you have your work cut out for you. Further comments?

               FUGITIVE FELONS RECEIVING SOCIAL SECURITY

    Mr. Kennedy. Mr. Chairman, I was really interested in the 
fact that we have the same issue with fugitives; 22,000 
fugitives are collecting Social Security checks. And why we 
can't get a computer system that says--integrates this software 
and say----
    Mr. Huse. Exactly, this is a tremendous issue. As we look 
to tools where information technology could really make a 
difference, if we had in this country a national warrant 
database, it would be so much help to us to try and accomplish 
this almost Sisyphean task of trying to take all of these 
fugitives off the rolls.
    We do the best we can, but we are faced with a Byzantine 
system of record-keeping across many jurisdictions in this 
country.
    We are doing our best, both the Agency and the Office of 
the Inspector General, to make matching agreements so we can 
collect all of this data. But it is very, very challenging and 
time consuming and expensive.
    Mr. Kennedy. If you would make any recommendations--in 
addition to being on this committee, I am on the committee that 
funds our Justice Department. It would seem to me----
    Mr. Huse. We will be glad to bring----
    Mr. Kennedy. I would love to get them funded, to make that 
database available to you. It seems to me----
    Mr. Huse. We have done some audit work that supports this. 
We will be glad to bring that by your office.
    [The information follows:]

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                             NON-WORK SSNS

    Mr. Regula. Another one that troubles me is giving people a 
number for identity purposes only, who are not employed.
    Mr. Huse. That practice has been stopped.
    Mr. Regula. No more?
    Mr. Huse. No more. The Commissioner has sent a letter of 
cessation to all of the governors of the States concerned. Just 
within the last week or so this went out.
    Mr. Regula. I assume the people involved in the 9/11 could 
get numbers.
    Mr. Huse. They did. Some of them did.
    Mr. Regula. Thank you very much. It has got to be 
challenging with so many people out there.
    Mr. Huse. Thank you, Mr. Chairman.
    Mr. Regula. So many potential ways to work the system.
    Mr. Huse. Incredible.
    Mr. Regula. Hard to believe.
    [The following questions were submitted to be answered for 
the record:]

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                                       Thursday, February 28, 2002.

                  CORPORATION FOR PUBLIC BROADCASTING

                                WITNESS

ROBERT T. COONROD, PRESIDENT AND CHIEF EXECUTIVE OFFICER, CORPORATION 
    FOR PUBLIC BROADCASTING
    Mr. Regula. Well, we will get the hearing started. It's 
scheduled for 9:45. Our first panel this morning will be Bob 
Coonrod, Corporation for Public Broadcasting. We are going to 
move along today. We have got a full schedule on the Floor and 
so on, and a lot of steelworkers in town.
    So we are happy to welcome you. If you will summarize your 
testimony, and we might have a few questions.
    Mr. Coonrod. Thank you, Mr. Chairman, I will be happy to 
summarize my testimony.
    Mr. Chairman, I appreciate the Subcommittee taking time to 
hear from the Corporation for Public Broadcasting this morning. 
We are grateful, and by we, I mean the community of public 
broadcasting stations around the country.
    We are grateful to you and to Mr. Obey for your leadership 
in helping to secure the vital funding that is needed to offer 
public television and radio to all Americans.
    The funding for public broadcasting that the Congress 
provides is an investment that Americans have once again ranked 
among the five best values that they receive for their tax 
dollars.
    This is a critical period. The FCC deadline for converting 
to digital transmission by 2003 is before the public television 
stations, and public radio must also begin its transition to 
digital.
    Stations are faced with tremendous challenges: raising the 
necessary funds from State, Federal, local sources; purchasing 
and installing equipment; and creating and developing the new 
educational services that can take advantage of the technology.
    The digital transmission provides us enormous opportunity 
to harness this technology, to address some of the Nation's 
biggest domestic challenges, and to truly revolutionize the way 
we use the airwaves, not just to entertain, but also to learn, 
to teach, and to work.
    This subcommittee, Mr. Chairman, has played an important 
role in securing the first Federal funds appropriated to CPB to 
play its part in the digital transition. We received $45 
million over the last two years, and we are most grateful for 
those dollars, Mr. Chairman.
    But at the same time, I would say we are not insensitive to 
the many demands on the Federal budget, especially those 
created by our Nation's priority of defending our homeland.
    Those of us who represent organizations that do receive 
public funds I think have a responsibility to answer the same 
kinds of questions that you must weigh when considering the 
many requests that come before you: why so much; why public 
broadcasting; why today; and why this year?
    Let me try to take those questions in turn, Mr. Chairman. I 
think the answer to why so much is straightforward. States have 
already raised about $473 million of the $1.7 billion that is 
needed for the conversion, and the Federal portion of that 
conversion has been calculated at $610 million.
    Within the Federal portion for 2003, CPB is requesting $137 
million, the amount needed this year for public television and 
radio, who are at the brink of the digital transition, to meet 
the need for new equipment and content that utilizes the 
benefits and technologies of a digital signal.
    The remainder of the Federal funds that are being requested 
this year for fiscal 2003, $110 million, are being requested 
from the PTFP program at the Department of Commerce, which I 
know does not fall under your subcommittee.
    The why us, I think that is also a pretty straightforward 
question. Public broadcasters are the only broadcasters who are 
committed to giving every American access to important 
educational and other critical services that digital 
broadcasting will make possible.
    For rural and remote communities that might otherwise be 
left behind in the digital transition, we are now studying 
methods of delivering broadband to them.
    In many communities, as you know, Mr. Chairman, local 
public radio and television stations are the only locally owned 
and controlled media outlets. In many communities around the 
country, with the concentration in ownership, the local station 
is no longer an operative word.
    Why this year, is first and foremost, because we must meet 
a Federal mandate to convert by 2003. But there are other 
reasons why this year is also important.
    The Nation has needs that public broadcasters can help 
address. Digital technology will enable stations to multi-cast 
four or more separate streams of programming simultaneously 
over one signal. This can be accompanied by layers of data that 
can be accessed interactively.
    This means that at a time when the Nation is committed to 
leaving no child behind, public broadcasters will be able to do 
even more to improve school readiness and reading skills.
    At a time when we must improve teacher training and 
classroom quality, public broadcasters will do even more to 
provide educational and instructional content for teachers. At 
a time of economic recession, when many Americans lack the 
skills required for 21st Century jobs, public broadcasters will 
expand their efforts to provide the basic skills to help adults 
get jobs and succeed at work.
    At a time when many are concerned with the perceived 
coarsening of the culture, public broadcasters can provide even 
more safe havens for children, with programming that 
exemplifies our mission: high quality, diversity,creativity, 
excellence, and innovation.
    But to deliver these services requires creating new quality 
educational programming. We will use most of the $45 million 
already appropriated for digital transition for equipment and 
facilities, as the Congress has emphasized.
    But for 2003, we are proposing that a portion of the 
funding be directed to developing and producing new digital 
programming. This approach has the endorsement of the public 
television community, Mr. Chairman.
    Creating new tailored channels for digital will be 
expensive. For instance, a full-time adult learning channel 
could cost between $10 million and $20 million per year. We are 
working on ways to be more cost effective. That is my 
commitment to you, Mr. Chairman.
    The station community, along with CPB and the Public 
Broadcasting Service, are actively exploring ways to create and 
deliver digital services in the most efficient ways possible. 
We are supporting pilot projects to develop methods that will 
allow stations to share infrastructure and other major 
expenses.
    In fact, CPB, when it awards digital grants, will require 
stations to demonstrate how their efforts will be cost 
efficient, collaborative, and will provide new educational and 
rural services. This differs from the PTFP program in the sense 
that theirs is only an equipment program.
    In conclusion, I would just like to make two other points, 
Mr. Chairman. One, CPB's general appropriation for fiscal year 
2005 is for $395 million. That is our request, and we must 
address the practice of advance appropriations again this year. 
We appreciate the leadership that the Congress has taken in 
recognizing the need for advance appropriations.
    I would like to also mention the public broadcasting 
community's support for a $24 million request for Ready to 
Learn, and a $16 million request for Ready to Teach, in fiscal 
year 2003.
    These successful programs are administered under a 
cooperative agreement between the Public Broadcasting Service 
and the U.S. Department of Education, and are responsible for 
enhancing the reading abilities of children nationwide, and for 
providing outstanding training and lesson plans for teachers. 
They are not part of the CPB appropriation, but they are 
intrinsic to the service that public television stations 
provide for younger audiences around the country.
    I thank this subcommittee again for its continued support 
of public broadcasting for the American public. Personally, I 
thank you for your steady counsel and cooperation with CPB. I 
would be happy to answer any questions that you may have at 
this time.
    [The prepared statement and biography of Robert T. Coonrod 
follow:]

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



    Mr. Regula. Thank you.
    My colleague, Mr. Hoyer, has another commitment, so you may 
proceed.
    Mr. Hoyer. Thank you very much, Mr. Chairman.
    I want to welcome the President of the CPB here. I wanted 
to come briefly this morning. As I told you, Mr. President, I 
have the Treasury Postal Committee, on which I am the Ranking 
Member, which meets right across the hall in four minutes.
    But I wanted to come because I feel so strongly about the 
Corporation for Public Broadcasting and the contribution that 
it makes, and the other group on the agenda, Library Services, 
because I think both do what I think is critically important. 
That is speak to, and the phrase you used was, the coarsening 
of our public discourse and culture.
    I think it is an extraordinary problem in this country. I 
will not go into the various manifestations of that, that find 
themselves in entertainment, in movies, in television, in 
broadcasting, in video, music, et cetera, et cetera, et cetera. 
The World Wrestling Federation is a particular gripe of mine.
    But having said that, I think to the extent that we can 
fund properly services which reach out to citizens in the best 
of values, the better off our society and culture will be.
    So Mr. Chairman, I appreciate your giving me this 
opportunity, and I regret, again, that I will not be able to 
hear the testimony, although I have it in written form and 
will, of course, review that.
    We can also be lucky that we have a Chairman, as you know, 
like his predecessor, that has a very broad perspective and 
commitment to the appropriate funding of the agencies within 
his purview.
    Mr. Chairman, thank you very much.
    Mr. Coonrod. Mr. Hoyer, if I might put in a plug for the 
people who are going to follow me, we have a couple of very 
interesting cooperative projects with them, in communities, 
where the local public television station and the local 
libraries and museums have common outreach services.
    It is an exciting way to leverage the activities of two 
separate Federally-funded organizations and get better impact 
in the communities. It is a terrific organization.
    Mr. Hoyer. Of course, the synergies between not just your 
two enterprises, but the synergy between most or many of the 
enterprises that we deal with, particularly in the Department 
of Education, as well as your services, are critically 
important if we are going to do what you suggest we need to do, 
and I agree with that.
    Thank you, Mr. Chairman.
    Mr. Regula. The record will be open, if you want to submit 
questions for the record.
    Mr. Cunningham.

                                  NPR

    Mr. Cunningham. Thank you, Mr. Chairman, good morning.
    I have got a question about something that really bothered 
me, that I recently learned about. On January 22nd, David 
Kesenbaum reported that the Traditional Values Coalition could 
be a possible suspect of the FBI for anthrax letters which were 
sent to Senator Daschle and Leahy.
    Kesenbaum spoke to Andrea Lafferty from TVC, who informed 
him that TVC had not been contacted by the FBI, yet his stories 
still intimated that the FBI considers the Traditional Values 
Coalition a suspect in anthrax mailings to Capitol Hill. That 
is ludicrous, and it upsets me that they would do that.
    While I understand that the CPB does not regulate the 
editorial content of National Public Radio, I am concerned that 
NPR receives money from CPB.
    What is NPR's annual budget, and what portion of the budget 
is Federally-funded?
    Mr. Coonrod. I cannot tell you what NPR's annual budget is. 
I could provide that for the record for you, Mr. Cunningham. It 
is around $60 million.
    We do not have any kind of regular financial relationship 
with NPR. Our support is to the stations who are the owners of 
NPR.
    In any given year, NPR competes for grants. Last year, it 
had a grant of about $1 million from us to support the 
development of satellite radio, and it had a grant of about, I 
think, $1.4 million from us to support a new daily talk show 
with Tavis Smiley.
    So we have a grant relationship. We do not have any kind of 
a regular financial relationship with them. They compete for 
CPB funding, along with other producers of programming.
    I do know, in this particular case, that NPR on the air 
recognized the error of the report and corrected it, and also 
has posted that correction on its Web site. So that is 
available for anyone who goes to the NPR.ORG Web site.
    I do know, from a conversation with the President of NPR, 
Kevin Klose, that they have sent three letters attempting to 
communicate directly with TVC, to try and resolve this issue.
    Mr. Cunningham. So you do not condone irresponsible 
literature that came out like that?
    Mr. Coonrod. I mean, the report was wrong. It is 
unfortunate that it came out. I think NPR, when it did come 
out, took appropriate action in recognizing that it had made an 
error.
    Mr. Cunningham. So you do not support irresponsible 
journalism like this?
    Mr. Coonrod. No, I do not support irresponsible journalism, 
nor do the editors of NPR. I think that is the message of their 
publicly recognizing that this was a mistake.
    Mr. Cunningham. I will be the first to tell you, any group 
that I found out, whether it is a group like TVC, or any other 
group, if they were responsible for anthrax, we would hammer 
them.
    But I think that typically, the left wing reporting has got 
a lot of us upset. Then when NPR goes after groups like TVC, 
especially with reports that are irresponsible, I think that is 
a blow below the belt. You may disagree with groups like that, 
but I was very upset when I heard this report.
    Mr. Regula. If you will yield, Mr. Cunningham.
    Mr. Cunningham. I would be happy to yield, Mr. Chairman.
    Mr. Regula. I would like to have these documents that you 
mentioned that they put on their Web site, and anything else 
that applies to this situation, and we would insert them in the 
record at this point.
    [The information follows:]

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    
    Mr. Cunningham. My only concern with the Web site, it is 
kind of the way it was done. When you read it, Mr. Chairman, 
you will see that the correction was posted, but it was done 
reluctantly, and the characterization of the words themselves 
are a little bit off-target, as well.
    I yield back my time.
    Mr. Regula. Well, I would say Mr. Cunningham makes a very 
good point, and I know a number of other Members have been 
distressed by this. But it is our feeling that if it is the 
taxpayers' money, it should be totally nonpartisan. I have had 
some discussion with NPR on this issue before. I hope that they 
avoid partisan comments in their production of news.
    Mr. Coonrod. As Mr. Cunningham noted, we at CPB do not have 
any direct editorial responsibilities for NPR. But I would be 
more than happy to convey your concerns to NPR about this.
    Mr. Cunningham. And I would tell the gentleman that if the 
National Public Radio came out against another group, I would 
still have the same concerns. It is the principle of the thing. 
I oppose irresponsible reporting that hits below the belt, and 
that we should not allow that from any perspective of the 
political specter.
    Thank you, Mr. Chairman.
    Mr. Regula. I understand there are going to be some one 
minute speeches on this subject this morning. I can see that 
anything like this is destructive to public support. Because we 
have to rely on public support for our activities, for spending 
taxpayer money, the credibility of what we fund is important 
regardless of what it is, and all of this type of thing erodes 
the base of credibility.
    While I realize it is not something that you have done, we 
would urge you to convey to the appropriate individuals our 
strong concern about any partisanship.
    Mr. Cunnningham. Mr. Chairman, if I may, one of the other 
things that really bothered me about this whole thing is the 
reason that this report was aired. Two days before September 
11th, the Traditional Values Coalition chastised both Senator 
Tom Daschle and Patrick Leahy for trying to remove the phrase, 
``So help me, God,'' from the oath when swearing in witnesses 
before the Senate.
    There are groups that want to take God, want to take 
religion, want to take values out of the American culture. I 
think that the disintegration of those values is quite evident 
in this country by certain groups.
    You know, I would also chastise Daschle and Leahy for 
trying to eliminate ``So Help Me God''. Thank you, and I ask 
you, does that make me a suspect for sending anthrax?

                       DIGITAL CONVERSION REQUEST

    Mr. Regula. Why are you requesting support for digital 
facilities through this subcommittee, rather than Commerce 
State Justice?
    Mr. Coonrod. Public Broadcasting is requesting 
supportthrough Commerce State Justice and through the regular CPB 
appropriation through this subcommittee.
    In 1997, when we first developed our digital request, the 
request was made through this subcommittee. We have 
consistently had a request for digital as part of the CPB 
request.
    But in 1999, OMB suggested that we put the bulk of the 
requests for the digital equipment into the PTFP appropriation, 
and request it through PTFP, which is what we did. So we have 
been having, in effect, a two track strategy since then.
    With the emergency supplemental, and then again with last 
year's appropriation, the Congress appropriated money for 
digital facilities within the CPB. So we continue to identify 
the need for the request, recognize the request, and ask for 
the money.
    From the perspective of the people who need the money to 
make the conversion to digital to be able to maintain service 
in their communities, I think whether they could apply to PTFP 
or CPB for that funding would not be an important matter.
    What they are focused on is making sure that they can 
maintain service in the community. So, if an Administration or 
Congress chooses to put it in one appropriation versus another, 
that is the will of the Congress as to how that gets allocated.
    I would say though, not to prolong my answer, but by 
appropriating money through CPB, and given the nature of how we 
operate, what we are able to do is to promote a better 
collaboration and greater sharing of facilities than would be 
through a traditional grant program, like the PTFP program is.

                    COMMUNITY SERVICE GRANTS (CSGS)

    Mr. Regula. Are you aware that some Members of Congress, 
meaning your authorizers, had concerns about your station grant 
process being inequitable. What is the status of these 
concerns?
    Mr. Coonrod. We had had a review under way. We periodically 
review our grant processes. We had a review by 13 station 
managers and we are working on this.
    But the specific concern that had been raised was that 
there was an inequity in community service grants that go to 
primarily state networks, licensees that serve more than one 
community. They have to maintain multiple infrastructures, 
additional transmitters, and everything.
    The concern was that there was a cost to that, that was not 
being recognized in the community grant that was being given. 
After a review, the committee recommended that the CPB Board 
approve a change in our policies, which does provide a bonus, 
if you will, to licensees who provide service in multiple 
communities.
    That is a bonus that applies particularly to state 
networks. So, I think we have addressed the issue that had been 
identified by some of our authorizers.
    There are two other points about that though that I think 
are relevant. In doing this review, the committee did re-affirm 
the emphasis that we place on providing rural service and 
support for smaller stations, stations in smaller communities. 
So we have not changed that emphasis, but we are now providing 
additional support to state networks.

               SOURCES OF REVENUE FOR PUBLIC BROADCASTING

    Mr. Regula. What percentage of your total budget is Federal 
funding?
    Mr. Coonrod. About 15 percent of the total revenue for 
public broadcasting comes from Federal sources. If I could 
refer you to the justification chart in the justification, it 
is Appendix E. You can see the breakdown.
    The CPB appropriation in fiscal year 2000 was approximately 
13.7 percent. Other Federal non-CPB funds were 1.6 percent. So 
Federal sources were about 15 percent.
    Mr. Regula. I see subscribers are 25 percent.
    Mr. Coonrod. Yes.
    Mr. Regula. That is rather commendable support.
    Mr. Coonrod. Yes, the single largest source of revenue 
continues to be viewers like you. [Laughter.]
    Mr. Regula. Right, we have the, what is it, President or 
Director of our local public television station with us this 
morning, 45-49. I happen to be a Lawrence Welk fan, so you get 
my attention. I'm giving my generational situation with that. 
[Laughter.]
    Mr. Regula. But I will say that my grandchildren appreciate 
it, too. They do a nice job, and I think are very well received 
in our community.
    I think public television is pretty well received 
throughout the Nation, and that is quite evident from the 
percentage of your budget that comes from subscribers. So that 
is a vote of confidence in the concept of public broadcasting 
in television.

                        OBJECTIVITY AND BALANCE

    Are there any guidelines for member stations to ensure that 
news is reported on an unbiased basis? Mr. Cunningham raised an 
issue, and as I say, a number of other Members have the same 
concern.
    Mr. Coonrod. When we talk about news and local stations, we 
are talking primarily about public radio.
    Mr. Regula. That is correct.
    Mr. Coonrod. Many public radio stations have local news 
operations.
    In 1996, we provided funds for National Public Radio to do 
a kind of guide book or a handbook for editors, local newsroom 
editors, so that they could have ready access to what are 
current journalistic practices; what are the appropriate ways 
to edit stories and to describe things. That work has been in 
use since then.
    We are now talking about having another series of 
conversations with the public radio community to update that 
work, so that we could have a 21st Century version of the 
handbook that includes editorial guidelines, proper usage, and 
those kinds of things.
    It has been a very useful primer, but there has been an 
increase in the number of public radio stations who now provide 
local news coverage. There has been a significant increase in 
the last four or five years. So I think it is time to update 
that effort.
    We do this as part of our overall responsibility under the 
Public Broadcasting Act for assuring that there is a balance in 
fairness and programming. We will work closely with the groups 
like the Public Radio News Directors Association and groups 
like that, to assure that this information is available widely.

                        UNDERWRITING GUIDELINES

    Mr. Regula. I notice that you have business, 17 percent; 
and I notice on our stations, Smuckers, which is in my 
district, sponsors programs. I guess you do not call it 
advertising. You call it sponsorship.
    Mr. Coonrod. Underwriting, sir.
    Mr. Regula. Underwriting.
    Mr. Coonrod. Yes, there are a couple of different kinds of 
underwriting. There is program underwriting, where an 
underwriter will provide support for a production of a program, 
and then a number of corporate sponsors, corporate underwriters 
will support local station activities.
    By law, all sources of revenue must be identified. In other 
words, a public station, in order to maintain its license, any 
source of revenue, any corporate underwriter, must be 
recognized on the air.
    Mr. Regula. But you do not sell advertising, as such.
    Mr. Coonrod. No, the licenses are non-commercial, 
educational licenses. The FCC has guidelines, which stations 
must use in determining whether the underwriting announcement 
is appropriate to fit within those guidelines.
    There are certain prohibitions that the FCC has in place. 
For example, you cannot call to action. You cannot advertise 
price. You cannot say, buy this, and things like that. But you 
do have an obligation, an affirmative obligation, to identify 
who the sponsor is of the program.
    Mr. Regula. I note you get a lot of support, relatively a 
lot, from higher education, and a broad range of support.
    Mr. Coonrod. I think one of the strengths of public 
broadcasting is the fact that its support depends on a 
multiplicity of sources, many local, some Federal. But that 
requires that the stations, and they are the primary sort of 
receivers of that support, that they do have good communication 
with, and that they be in touch with the institutions in their 
community.
    About a third of the public television licenses and a 
larger percentage of the public radio licenses are actually 
licensed to universities. So they have to have a good 
relationship with the universities in their communities, 
because the universities own the stations. A number are 
licensed to school boards and to libraries, and there are 
community groups, as well.
    As I said earlier, Mr. Chairman, public broadcasting is 
increasingly the only locally owned and controlled media outlet 
in many communities.
    Mr. Regula. I see you got a vote of confidence from the 
Administration in the budget they submitted. I believe you got 
an increase.
    Mr. Coonrod. Yes, sir.
    Mr. Regula. In this period of austere budgets, that is 
something that is a backhanded compliment.

                             READY TO LEARN

    Mr. Coonrod. If I might add, in one of the requests from 
the Administration, it is the first time that any 
Administration has ever requested funding for the Ready to 
Learn Program.
    Now that does not come through the CPB appropriation. It is 
now part of the Department of Education, but it is still within 
your purview. But I think the request is a real vote of 
confidence, because it is based on the demonstrated 
effectiveness of those programs, and the data is compelling as 
to how effective they are in helping prepare kids for school.
    Mr. Regula. Just give me a brief snapshot of that program.
    Mr. Coonrod. It is managed by the Public Broadcasting 
Service. There is a cooperative agreement with the Department 
of Education. The most obvious component is the broadcast 
component. There are educational programs that are also 
engaging in entertaining. The programs are based on research, 
both in their development and then longitudinal research, to 
determine their effectiveness.
    The one that is probably most prominent right now is 
``Between the Lions,'' which has gotten a number of awards for 
its effectiveness in helping young people learn to read.
    But there is another important component to the Ready to 
Learn service, which is an outreach component. Stations around 
the country hold seminars for parents and caregivers, to assist 
them in helping them learn how to use television effectively 
for children.
    One of the most compelling statistics that I have seen is 
that the children of parents who have gone through these Ready 
to Learn seminars watch less television than children whose 
parents have not gone through these Ready to Learn seminars. 
There is a higher percentage of parents who read with their 
children, who have been part of this, as well.
    So the effectiveness is quantifiable. But, it is because of 
that effectiveness that it is getting strong support at the 
national level and in many communities, as well.
    The other thing I might add is that there has been another 
innovation that was not part of the original program, but I 
think is very effective. It is free books. In communities where 
kids don't necessarily have access to books, we have book 
donation programs.
    So, in some communities, it is organized, and I can take an 
example of the State of West Virginia. The same books are being 
donated for free that are being featured in the libraries. So 
every kid in the State can actually have access to the same 
book at the same time. It is a way to stimulate interest in 
reading, and it works very well.
    Mr. Regula. Now you sell videos, too, of some of your 
programs, do you not?
    Mr. Coonrod. PBS Home Video does sell videos, and then some 
producers sell videos through other means. But most public 
television programs are available for sale on video,yes.
    Mr. Regula. Well, thank you very much for coming this 
morning, Mr. Coonrod.
    Mr. Coonrod. You are welcome, Mr. Chairman, and thank you. 
One of my staff has mentioned that I neglected to ask that the 
justification report that I was referring to be entered into 
the record, if that would be appropriate.
    Mr. Regula. Without objection, it has been made part of the 
record.
    Mr. Coonrod. Thanks, Mr. Chairman.
    [The following questions were submitted to be answered for 
the record:]

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



                                       Thursday, February 28, 2002.

  INSTITUTE OF MUSEUM AND LIBRARY SERVICES AND NATIONAL COMMISSION ON 
                   LIBRARIES AND INFORMATION SCIENCE

                               WITNESSES

DR. ROBERT S. MARTIN, DIRECTOR, INSTITUTE OF MUSEUM AND LIBRARY 
    SERVICES
MARTHA GOULD, CHAIRPERSON, NATIONAL COMMISSION ON LIBRARIES AND 
    INFORMATION SCIENCE
JACK HIGHTOWER, MEMBER, NATIONAL COMMISSION ON LIBRARIES AND 
    INFORMATION SCIENCE
BOB WILLARD, EXECUTIVE DIRECTOR, NATIONAL COMMISSION ON LIBRARIES AND 
    INFORMATION SCIENCE

                       INTRODUCTION OF WITNESSES

    Mr. Regula. This is education day. We are going to have the 
Library Services next. So we will welcome Dr. Robert Martin and 
Martha Gould; in fact, we are pleased to welcome all of you, 
and especially our former colleague here, Mr. Hightower.
    Mr. Hightower. Thank you, Mr. Chairman.
    Mr. Regula. Texas is much in the news these days.
    Let me see, I think we will start out with you, Dr. Martin, 
and the Institute of Museum and Library Services. So we will 
welcome your testimony, and the entire statement will be made 
part of the record. We appreciate your summarizing it.

                           Opening Statement

    Mr. Martin. Thank you and good morning, Mr. Chairman. I am 
very pleased to be here to testify on behalf of the President's 
fiscal year 2003 budget request for the Institute of Museum and 
Library Services.
    As you said, we have provided detailed testimony. What I 
would like to do right now is just briefly take a few moments 
to speak with you informally about the appropriation request, 
and call your attention to some specific items.
    The President's Budget contains $210,742,000 for the 
Institute of Museum and Library Services, which reflects an 
increase of $15,765,000. The request for the Office of Museum 
Services is $29,022,000, and for the Office of Library 
Services, it is $181,720,000. The increased funding will expand 
core services of libraries and museums, and support a 
$10,000,000 initiative to recruit and educate a new generation 
of librarians.
    Libraries and museums are institutions that are 
indispensable to our democratic society. They preserve our rich 
and diverse culture and heritage, and they transmit it from one 
generation to the next.
    They supply accurate and dependable information to our 
citizens and their leaders alike for their use in their every 
day work. They are cornerstones of community engagement, and 
help us find connections with each other and with the world 
around us. They provide rich and stimulating opportunities for 
recreation and enjoyment.
    But the most important role that museums and libraries play 
in their communities is providing the resources and services 
that support public education in the broadest sense. That is 
the rationale that drove the creation of the Institute of 
Museum and Library Services five years ago, the simple 
recognition that museums and libraries are both social agencies 
that support public education.
    The Federal role in supporting our Nation's museums and 
libraries is limited, but it is extremely important. The funds 
distributed by the Institute of Museum and Library Services are 
but a very small part of the total resources available for 
library and museum services, but they perform an extremely 
vital role in enhancing the services available to our 
communities.
    The programs we offer at IMLS foster leadership, creativity 
and innovation. They build the capacity of local institutions, 
and they leverage substantial local, state and private 
resources.
    I would like to focus now on two elements in the budget 
request. First, the fiscal 2003 request proposes $10 million to 
address a critical national shortage of librarians. With one of 
the highest median ages of any occupation at 47 years old, 
librarianship is a profession that is in urgent and constant 
need for replenishment.
    Many librarians have come to the profession as a second or 
even a third career. When that fact is coupled with the 
demographics of an aging baby boomer population, the result is 
a looming crisis in addressing the capital needs of the 
profession. If this problem is not addressed, the results will 
be inadequate library services in our communities in a 
generation.
    Second, with the fiscal 2003 request, IMLS is proposing to 
refocus our long-standing general operating support program for 
museums. While no funding increase is requested for this 
transition, we do plan to change our program to meet new needs.
    For over two decades, IMLS has provided unrestricted 
operating support to institutions that could demonstrate that 
they meet basic accepted standards of museum practice. Over the 
years, this program has contributed substantially to the 
improvement of museum operations.
    Today, 85 percent of the museums that apply for general 
operating support grants are meeting or exceeding generally 
accepted standards in every area of their operation; but we can 
fund only 19 percent of those applications.
    So IMLS, in coordination with the museum community, is 
engaged in a comprehensive process to redirect support for 
museum operations, to adapt the program to support museums to 
meet the changing needs of their communities.
    I thank you, Mr. Chairman, for your continued support of 
this effective Federal program. We are very proud of the work 
we do at the Institute of Museum and Library Services, and we 
look forward to continuing to work with the Nation's libraries 
and museums to help equip them to serve the 21st Century 
learner.
    I would be happy to respond to any questions you may have.
    [The prepared statement and biography of Dr. Robert S. 
Martin follows:]

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               INITIATIVE TO RECRUIT AND TRAIN LIBRARIANS

    Mr. Regula. I have just a couple of questions. I understand 
that Mrs. Bush has announced a new initiative to recruit a new 
generation of librarians. Tell me about that.
    Mr. Martin. Well, the problem with the library profession 
is that we have an aging and soon-to-retire cohort of 
librarians. Librarians play a very important role in planning 
and managing the delivery of services that libraries provide to 
their communities.
    What we hope to do with that $10 million is initiate a 
program that will stimulate recruitment, attract bright, new, 
young individuals to the profession and support their 
educational needs to enter the profession at the accepted 
level, with a Masters Degree in Library and Information 
Studies.
    Part of the problem that we have in addressing that need is 
the geographic disparity of access to educational programs. So 
what we will expect to do with that program is to encourage and 
stimulate the development of distance learning opportunities, 
particularly in the Inter-Mountain West, where there is a 
complete scarcity of Graduate programs in library and 
information studies.
    We expect to use some of the money simply to provide 
student support. We also face a critical problem in attracting 
faculty to teach in these programs. So we will expect to spend 
some of those funds to enhance the Doctoral level preparation 
of professors to teach in the Graduate Schools of library and 
information studies.

                        TECHNOLOGY IN LIBRARIES

    Mr. Regula. Does technology affect the role of libraries 
and museums in today's society?
    Mr. Martin. Oh, yes, technology has had a profound impact 
on the way in which museums and libraries deliver the resources 
and services that they have to their communities.
    It has done a number of things. The most important actually 
is that it has dramatically enhanced the reach of museums and 
libraries. It has brought awareness and attention of the 
communities that they serve to the resources that are available 
to address their needs. It has, in a way, acted as a billboard 
for the museums and libraries in the communities.
    It has not, however, replaced the traditional services of 
reference on site in the libraries, circulation of books, 
reading and story hours for developing literacy in young 
people, family literacy programs. All of those actually have 
increased.
    What we have here is a complementary placing of the old and 
the new side by side, and each enhancing the capabilities, the 
capacity of the other.
    Mr. Regula. So you do not see technology replacing books?
    Mr. Martin. On the contrary, what digital information 
technology has done is open a whole new arena of activity for 
museums and libraries; but it really has not replaced the old 
and traditional technologies, either. What we have actually 
seen, in many cases, is increased use of the traditional 
services, along with dramatically increased use of the new 
technology, the new services based on new technologies.
    Mr. Regula. Well, I know I have visited a couple of the 
chains, like Borders or Barnes & Noble. It is pleasing to see 
the crowds, the volumes. So it is indicative that people are 
still buying books and reading books, which I think is a 
healthy condition.
    Mr. Martin. The libraries have actually moved in the same 
direction. Many libraries on academic campuses, for example, 
feature coffee bars and casual study areas that foster not only 
increased use of the library, but also new ways of learning, 
collaborative learning, as students work together on research 
projects.

                   LIBRARIES SERVING ALL GENERATIONS

    Mr. Regula. We funded an experimental program at one of the 
community libraries in my area. They are putting in a reading 
room for seniors which, of course, will feature the newspapers 
and so on and a coffee bar. Then that will encourage the 
seniors to mentor elementary children in the elementary schools 
next door. I think that would serve both generations very well.
    Mr. Martin. Absolutely.
    Mr. Regula. I would like to see more of that.
    Mr. Martin. Well, I think you will see more of that. One of 
the things that museums and libraries have both done in recent 
years is develop new programs that actually bring the 
generations together in the libraries and in the museums.
    Mr. Regula. That is great. Well, we will have a few 
questions for the record. Thank you for coming.
    Mr. Martin. Thank you.

        NATIONAL COMMISSION ON LIBRARIES AND INFORMATION SCIENCE

    Mr. Regula. Mrs. Gould, you are here on behalf of the 
National Commission on Libraries, and we look forward to your 
testimony.

                           Opening Statement

    Ms. Gould. Thank you, I appreciate the opportunity to come 
before you this morning. I am accompanied by Jack Hightower, 
who is a member of our commission; Bob Willard, who is our 
Executive Director; and Dr. Joan Challinor, who is the Vice 
Chair, who is here in the audience.
    I have submitted a statement with two attachments. I 
request the material, along with our appropriation 
justification, be made a part of the record.
    Rather than reading from the statement, I would just like 
to share a few thoughts. I once was told that about $14 billion 
is spent annually on the Nation's libraries. Put another way, 
for less than $50 per person, or for the price of two hardbound 
books a year, Americans have a nationwide knowledge resource of 
incredible value.
    When Congress created our Commission in 1970, it authorized 
$750,000 a year, or about $3.4 million in today's dollars. We 
are seeking, for fiscal year 2003, $2.8 million which, on a per 
person basis, is less than a penny a year.
    In our submitted testimony, we described recent Commission 
activities. I am not going to attempt to detail or even list 
the programs. Instead, let me pick just one, and use it as an 
example of how the Commission works. Let us talk about school 
libraries.

                            SCHOOL LIBRARIES

    A former U.S. Commissioner of Education, Harold Howe, once 
said, ``What a school thinks about its library is a measure of 
what it thinks about education.''
    This message is one I do not think I have to explain to 
you, Mr. Chairman. As a father of a school librarian, you will 
not be surprised that recent research has concluded that the 
caliber of a school library is among the most significant 
indicators of academic success for students.
    The Commission held hearings on school libraries last 
Spring in Cincinnati, Ohio. We heard great success stories, and 
we heard terrible tales of trouble.
    We recognized the need for immediate action in this area, 
and we enthusiastically supported the school library provisions 
in the No Child Left Behind Act. I applaud this committee for 
providing in fiscal year 2002 funds for this new program. 
However, more needs to be understood about school libraries, 
including the evaluation of the new Federal schoollibrary 
program.
    At our hearing, witnesses noted significant deficiencies in 
the collection and the publishing of statistics about school 
libraries. The most recent published data covers 1993 and 1994, 
and the data for 1999 is collected, but it is not published.
    Working with the National Center for Education Statistics, 
the Commission has greatly improved overall library statistics. 
However, more needs to be done in the area of statistics in 
school libraries. The Commission is committed to seeing this 
improvement be achieved.

                             FY 2003 BUDGET

    Before closing, I want to share with the Subcommittee how 
mystified I remain about the proposal to eliminate this 
Commission. With due respect, sir, the stated rationale in the 
fiscal year 2003 Budget is totally without substance.
    First, the Budget recognizes our reports on a wide variety 
of information issues. But it claims they have failed to have 
significant impact on public policy. The contrary is true. 
Laws, regulations, and programs dealing with Government 
information, paperwork reduction, copyright, Federal assistance 
to libraries, and access by individuals with disabilities all 
have benefitted from our work.
    Second, the Budget suggests something is amiss by the fact 
that we do not operate programs, and that we incur costs only 
for salary, travel, and other expenses. However, we were 
designated by Congress to be an advisory and planning agency, 
not an operating agency. Our function and expenditures are 
exactly in line with the responsibilities assigned to us by 
law.
    Finally, the Budget suggests that other agencies can take 
on the responsibilities of the National Commission that 
continue to be necessary. The Budget fails to identify these 
agencies, provides no recommended changes in law to bring about 
the reassignment, and neglects to provide any funding to 
perform the continuing functions.

                     INDEPENDENCE OF THE COMMISSION

    It is this last item, that other agencies can do the 
Commission's work, that is most troubling. OMB, I believe, has 
failed to understand what is unique about the Commission and, 
in fact, what Congress intended to be unique: our independence, 
our ability to propose policy approaches unencumbered by any 
extra baggage. Perhaps it is this independence that OMB 
opposes.
    However, Congress made it undeniably clear that 
independence was a characteristic, and perhaps the key 
characteristic, of the agency it established.
    Patsy Mink of Hawaii, one of the original sponsors of 
legislation to create our Commission, said on the Floor of 
House three decades ago, ``We have deliberately avoided making 
the Commission part of any existing agency of Government having 
functions in the library field. As a completely independent 
entity, it will be able to make recommendations free of undue 
pressure from any source.''

                               CONCLUSION

    I know the President is clearly committed to improving 
education and literacy. He calls reading the ``new civil 
right.'' I think it is also an old civil right.
    I know for the first time in our history, there is a 
librarian, indeed a school librarian, as the First Lady of this 
Nation. I, along with my fellow Commissioners, wish very much 
to work with the President and the First Lady to achieve his 
educational goals.
    It is my hope that Congress will fully fund the National 
Commission on Libraries and Information Science, and thereby 
demonstrate that it still values the independence and the 
ongoing role assigned to us by the 91st Congress.
    It is my equally strong hope that the Administration, 
recognizing Congress' commitment, will quickly move to make new 
appointments to our Commission.
    The challenges of the Information Age are not yet resolved, 
and the people of this Nation deserve nothing less than the 
full attention and cooperation of the President and the 
Congress, with the help of the National Commission, to meet 
these challenges.
    I would now like Commissioner Hightower to share his 
thoughts with you.
    [The prepared statement and biography of Martha B. Gould 
follows:]

              [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



                  Introduction of Congressman Gibbons

    Mr. Regula. If I might interrupt you, Mr. Gibbons is here, 
if you would like to make some comments. I understand, Mr. 
Congressman, that you are a friend of Mrs. Gould. We welcome 
your comments.

                     REMARKS OF CONGRESSMAN GIBBONS

    Mr. Gibbons. Thank you, Mr. Chairman, and I apologize for 
being a bit late for this hearing. I wanted to be here on time, 
and you have just heard the introductory remarks of the Grand 
Lady that I was supposed to be here earlier to introduce.
    Let me say that Martha Gould is a long-standing and great 
friend, not only of mine, but of libraries and the Library 
Commission. Long before she was appointed Chairperson of the 
National Commission on Libraries and Information Science, she 
was my librarian.
    As Director of the Washoe County Public Libraries, she 
served the people of Reno and the surrounding communities. Now 
as the Chair of the Commission, she is serving the people of 
the entire country.
    Martha Gould appears before you today to speak on an issue 
of great importance, Mr. Chairman, to her and the entire 
Nation. It is the future of America's library system.

                      IMPORTANCE OF THE COMMISSION

    As a planning and policy organization, the National 
Commission on Libraries plays a critical role in studying, 
assessing, and improving the current state of library and 
information services.
    At a time when our society so greatly depends upon 
information for economic growth and up-to-the-minute knowledge, 
the responsibility of the Commission becomes even more 
important.
    As a member of the Intelligence Subcommittee on Terrorism 
and Homeland Security, I was especially fascinated with 
Martha's description of the Commission's effort to involve more 
directly America's libraries in providing emergency information 
to the public in times of disasters such as this country 
experienced with the tragedy of September the 11th.
    As you can see, Martha serves as a committed and eloquent 
spokeswoman for the Commission. I thank this Subcommittee for 
this opportunity to share my thoughts and especially my praise 
about my dear friend.
    I urge you to heed her advice, and maintain the National 
Commission on Libraries and Information Science. It will do us 
all a great honor, and it will be in the best interests of this 
country, Mr. Chairman.
    With that, thank you, and again, my apologies for being 
untimely in my presence. My librarian would fine me for being 
late with a book, at that magnitude. [Laughter.]
    Mr. Regula. You do not have any overdue books?
    Mr. Gibbons. Not anymore, no; she saw to it that I made 
sure I had returned every book before I was allowed to come to 
Congress. [Laughter.]
    Mr. Regula. I cannot resist jesting you a little bit to 
find out what her position is on storing nuclear waste.
    Mr. Gibbons. I can guarantee what her position would be, 
and you can take that to the bank. [Laughter.]
    Mr. Regula. Well, thank you for coming this morning. It is 
always nice to have a Member that brings a strong endorsement 
of the programs that are before us.
    Mr. Gibbons. Thank you, Mr. Chairman.
    Mr. Regula. Mr. Hightower.

                  STATEMENT OF COMMISSIONER HIGHTOWER

    Mr. Hightower. Thank you, Mr. Chairman.
    When I was in Washington last Fall, I saw you briefly, as 
you remember, outside the Members dining room. I told you then 
how important I believe the work of the Library Commission is.
    I remind you of that fact, only because the date we talked 
was September the 10th. What a difference a day makes. The next 
morning, I was in the Commission office downtown, when we began 
to hear the terrifying news coming from New York.
    A few minutes later, the horror of the day became quite 
personal, when I heard about a plane hitting the Pentagon. My 
daughter, Ann Thornburg, who used to work for Congress in 
Doorkeeper's Office, was one of the thousands of employees at 
the Pentagon that day.
    I hasten to report that she is okay and left the Pentagon 
safely. But for a couple of hours there was no word from her. 
You can only begin to imagine how worried and horrified I was 
at the uncertainty.

                 INFORMATION NEEDS FOLLOWING A DISASTER

    The need for information immediately following a disaster 
is overwhelming. It may be as focused as my need to know how my 
daughter was. Most of the time, however, it is for routine 
information about activities that are no longer routine. Is the 
Metro running? What roads are closed? Will the bank be open 
tomorrow?
    Immediately following the Pentagon crash, Arlington County 
Public Library turned its full attention to helping people get 
the information they needed. Libraries in New York City took 
similar steps.
    These activities prompted us on the Commission to develop a 
program to help libraries effectively perform this function 
when called upon. More importantly, we felt it vital to let 
emergency planners know about and take into consideration this 
valuable capability of libraries.
    We have prepared a briefing that we hope to show to 
policymakers throughout the country, emphasizing this point. We 
also hope to work closely with libraries to help them improve 
their own disaster preparedness, and especially to make sure 
they safeguard any unique collections that they hold.
    This effort is just the latest of a number of worthwhile 
programs that the Commission has been involved with during the 
two and-a-half years that I have been on the Commission. We 
reported on them in our submitted testimony.

                               CONCLUSION

    I want to thank the Subcommittee and you, Mr. Chairman, for 
taking the time to hear about the needs of a microscopic 
agency. We may have the distinction of being the smallest in 
the Federal family.
    I have lost track of how many appropriations hearings I 
have attended. In fact, I never kept track of them in the first 
place. But this is the first time I have sat on this side of 
the table. I know firsthand, as you well know, the difficulty 
in determining how much of the limited budget dollars we have, 
and how each Agency has to be limited in what they spend.
    I want to assure you of my strong belief that approving the 
full budget request of the National Commission on Libraries 
will be money well spent on behalf of the citizens of the 
Nation.
    Thank you, Mr. Chairman, for this opportunity to appear 
before you.
    Mr. Regula. Thank you, Congressman, we appreciate your 
point of view.
    As you noted, the President has tried to make you even a 
smaller part of our budget. [Laughter.]
    Mr. Hightower. Well, I do not think that was the President.
    Mr. Regula. I think it was OMB.
    Mr. Hightower. You know, the President, of course, gets a 
lot of credit for work that Members of Congress do. But then 
also I guess the President gets some criticism for some of the 
things that we do or did not do.
    This is a divided responsibility. I think the Congress, 30 
years ago, realized the importance of having an independent 
policymaker that could report to Congress and to the President. 
That is what we have been pleased to do.

                      NCLIS IS A PERMANENT AGENCY

    Mr. Regula. Well, I note the legislation makes you a 
permanent Agency, rather than subject to reauthorization. As 
you pointed out, I think this is probably an OMB decision. It 
is a big budget.
    Mr. Hightower. Oh, sure.
    Mr. Regula. It is easy for things to fall through the 
cracks.
    Mr. Hightower. Well, Mr. Chairman, you remember Congressman 
Mahon, who was Chairman of this Committee.
    Mr. Regula. I know him very well.
    Mr. Hightower. Well, I succeeded him when he retired. I 
came on the full Committee when he retired.
    Mr. Regula. Oh, is that right?
    Mr. Hightower. I remember telling him, ``Congressman, when 
you were Chairman, you used to say, just tell me how much you 
want, and we will put it in there; and now that you have given 
the Chair to me, I have to tell people, I do not care how much 
you want. We can only give you very little.''
    So I recognize that things change, times change, and 
situations change. But the need is permanent, and we are going 
to have to have this.
    Mr. Regula. Well, Sid Yates and I played that same record. 
[Laughter.]
    Mr. Hightower. I did not realize that you took Sid's place.
    Mr. Regula. Well, I did, actually, when we took over in 
1994. But I was on the Committee when Sid was Chair, and I was 
Ranking Member for many, many years. I had the restraints, or 
tried to, without much success. [Laughter.]
    Mr. Regula. Those were good programs that he was 
responsible for in Interior, just as any of these are, and it 
is tough to sort them out.
    Mr. Willard, would you like to make any comments?
    Mr. Willard. I am just here to answer a question, if it 
comes up.

                  CONSULTATION WITH PRIVATE LIBRARIES

    Mr. Regula. Okay, well, I think Mrs. Gould, you did pretty 
well. Let me ask you, do you consult with private libraries, as 
well as public?
    Ms. Gould. No, sir.
    Mr. Regula. You deal with public libraries only?
    Ms. Gould. Our job, our mandate, is to provide policy 
advice on the library and informational needs of the Nation. So 
we deal primarily in the public sector.
    However, in listening and holding hearings, and in some of 
the work that we have done, to do good policy, you have to do 
research and have data. We certainly have supported and pointed 
out the benefit of public/private partnerships. We were very 
supportive and instrumental in the creation of the Institute 
for Museum and Library Services, and of molding these two 
entities, libraries and museums, together.
    It is the only sensible way to go. I hate to be so blunt, 
but it is sort of like a bigger bang for the buck, when you 
have these types of cooperative programs.
    I know, in the years that I worked as the Director of the 
Washoe County Library in Reno, Nevada, we had all kinds of 
partnerships. We have partnership libraries, where public 
libraries are actually in school libraries. We have joint 
facility use.

                  DISSEMINATION OF COMMISSION REPORTS

    Mr. Regula. To disseminate your information, obviously you 
collect information. How is it disseminated to the libraries? 
There are a lot of libraries in this country.
    Ms. Gould. We collect. We publish.
    Mr. Hightower. These are publications.
    Ms. Gould. These are the publications. We make them 
available, and they are also available through our website. We 
also make these available to the Members of Congress, along 
with our policy recommendations.
    Mr. Hightower. And the Depository Libraries.
    Ms. Gould. Oh, and yes, how could I forget the Depository 
Library? My libraries is the Depository Library. So the 
information is widely disseminated, and it is the basis for a 
lot of policy creation, both at the Federal, the State, and the 
local level.

                ROLE OF THE LIBRARY FOLLOWING A DISASTER

    Mr. Regula. Are you doing an evaluation or dissemination of 
the role of the library, post-911?
    Ms. Gould. We are working on that now, sir. We should have 
that ready when, Mr. Willard?
    Mr. Willard. We are in the process of developing a 
presentation that we hope will be made available to 
policymakers at the Federal, State, and local level, that tells 
them how they can employ their library as a communications 
channel after a disaster.
    Before we go really wide-spread with it, we are consulting 
with librarians themselves, so that we do not promise something 
that they do not think they can do.
    But we have already had contacts with governors, with 
county executives, and with mayors, who are ready to see this 
as soon as it is available, and we are working to get this 
within the next four to six weeks.
    Mr. Regula. Do you maintain a website?
    Ms. Gould. Yes, sir, we do.
    Mr. Regula. So your information base would be available to 
anyone that wanted to use it through the Internet?
    Ms. Gould. Access to our research, yes.
    Mr. Willard. In fact, for about the past four years, every 
publication, as we create it, has gone on it. We are in a 
project now to take some of this really seminal work that has 
been done by the Commission over the past decade and also put 
it on the web, even though it was not created for electronic 
publishing at the beginning.

                            LIBRARY WEBSITES

    Mr. Regula. Do most libraries maintain websites to let the 
public know what they are doing, or what they offer?
    Ms. Gould. I would say that the major urban libraries and 
many of the medium size public libraries do.
    When you get out into the rural libraries in this Nation, 
there are some interesting problems. They range from lack of 
staff to lack of access to good telecommunications. But 
interestingly enough, if you go down to the State level, many 
States also, the State library, maintains both networks and 
websites that allow the public access to get into library 
information.
    Mr. Regula. Dr. Martin, do you concur in that, as to the 
use of web sites by the libraries?
    Mr. Martin. Oh, absolutely, I think Chairman Gould 
characterized it precisely right. The difficulties of rural 
libraries is that many of them are one person operations.
    Mr. Regula. Yes, I understand.
    Mr. Martin. They simply don't have the infrastructure or 
the staff to maintain them. But they do fall back on the 
resources provided by the state library administrative 
agencies, which I might add are funded through our programs.

               INTERNET AVAILABILILTY IN PUBLIC LIBRARIES

    Mr. Willard. If I could add to that also, the Commission 
has done a lot of statistical work over the years, most of it 
in cooperation with the National Center for Educational 
Statistics.
    We have done some surveys ourself, and specifically on 
penetration of Internet availability in public libraries; how 
many libraries make terminals available to their clientele.
    As this has developed, what has also happened is that the 
larger, well-off libraries have been making web services 
available, as you asked about. But we are now up to 95.7 
percent of all libraries in this country that have public 
Internet availability.
    So even if a small rural library does not offer access to 
its own web site, it has this rich collection of websites, 
managed by libraries all over the nation. So all of a sudden, that 
cooperative spirit that libraries have always had in terms of 
exchanging material has now spread to the electronic world. The web 
site created, for example, by the Los Angeles Public Library is a 
tremendous resource to be used right here in Washington, D.C.

                      BOOKMOBILES AND CYBERMOBILES

    Mr. Regula. Is the traveling library still a feature of 
American landscape?
    Ms. Gould. Oh, definitely, and again, I would come back to 
the library where I was the director. We just initiated this, 
thanks to a lot of support from the private sector as well as 
funds from IMLS, through the State library. We have our 
cybermobile, that goes all over.
    Mr. Regula. A cybermobile?
    Ms. Gould. Actually, we have wireless access to the 
Internet on our bookmobile.
    Mr. Regula. So you can go out in rural America, and the 
students can go in and actually use the web site in the 
vehicle.
    Ms. Gould. That is correct, sir.
    Mr. Regula. They did not have that when I was a kid. 
[Laughter.]
    Ms. Gould. I started my career on bookmobiles, and they 
have changed.
    Mr. Regula. Well, I was a big fan of our bookmobile, 
because we did not have much else. I grew in rural America. It 
was pretty rural, and I was a book worm. So I was a good 
customer of the traveling library.
    Ms. Gould. Well, I drove bookmobiles in Oklahoma and in 
Northern New Mexico.
    Mr. Regula. That's great.

                            SCHOOL LIBRARIES

    Ms. Gould. I do want to point out something, when we talk 
about access to information and using the Internet. This goes 
back to school libraries, which happen to be somewhat of a 
passion of mine.
    This is one of the things that we discovered in the 
hearing, and we will be publishing shortly the proceedings and 
some of our policy recommendations. Many school libraries are 
diverging money away from building good collections to paying 
for telecommunication costs, and for paying for the ongoing 
costs in upgrade of technology.
    The balance is not there, and the support for school 
libraries still does not really exist. It goes back to what I 
said earlier when I quoted Commissioner Howell. The school 
library is the heart of the education process. They have been 
miserably supported over the years.
    Mr. Regula. That is very interesting. Well, I see we have 
got about eight minutes left to vote. So thank you all, and 
Jack understands that. Thank you all for coming.
    Ms. Gould. We appreciate the courtesy.
    Mr. Regula. The committee is adjourned.
    [The following questions were submitted to be answered for 
the record:]


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                           W I T N E S S E S

                              ----------                              
                                                                   Page
Barnhart, J.B....................................................     1
Coonrod, R.T.....................................................   275
Dickman, M.J.....................................................   610
Gould, Martha....................................................   363
Hackbart, G.M....................................................   640
Hightower, Jack..................................................   363
Huse, J.G., Jr...................................................     1
Kever, J.F.......................................................   514
Martin, Dr. R.S..................................................   363
Sopper, D.W......................................................     1
Speakman, V.M., Jr...............................................   514
Thomas, C.T......................................................   514
Willard, Bob.....................................................   363


                               I N D E X

                              ----------                              

                     Social Security Administration

                                                                   Page
Adequacy of Budget...............................................    39
Administrative Law Judges........................................   120
Aging Population.................................................    76
Anti-Fraud Efforts...............................................    64
Beneficiary Growth in Programs...................................     2
Biography:
    Jo Anne B. Barnhart, Commissioner............................    32
    James G. Huse, Jr., Inspector General........................    60
    Dale W. Sopper, Acting Deputy Commissioner for Finance, 
      Assessment and Management..................................    33
Budget Requests:
    Justification of Estimates...................................   142
    Opening Statement........................................2, 3, 4, 6
Continuing Disability Reviews...............................61, 88, 130
Death Master File................................................    67
Delays in Disability Benefits....................................   138
Direct Deposit...................................................     1
Disability:
     Adequacy of the Budget......................................    39
    Claims.....................................................131, 141
    Continuing Disability Reviews...........................61, 88, 130
    Delays in Benefits...........................................   138
    Improving the Disability Process and Adequacy of the Budget..    36
    Process......................................................   102
    Process Delays...............................................    74
    Qualifying and Requalifying Individuals for SSI Disability...    39
Disability Claims..............................................131, 141
Disability Process...............................................   102
Disability Process Delays........................................    74
Enumeration:
    At Birth.....................................................     5
    Improving the Process........................................     5
Enumeration at Birth.............................................     5
Fugitive Felons Receiving Social Security........................    67
Full-Time Equivalents and Workyear History.......................    98
Funding:
    Justification of Estimates...................................   142
    Opening Statement........................................2, 3, 4, 6
Future of Social Security........................................    52
FY 2003 Commission's Budget vs. President's Budget...............    91
Government Pension Offset (GPO) and Women's Issues...............    42
GSA Rent.........................................................   126
Homeland Security and the SSN....................................    64
ID Theft.........................................................   137
Improving the Disability Process and Adequacy of the Budget......    36
Improving the Enumeration Process................................     5
Internet Services................................................4, 129
Introduction of Representative Pelosi............................    35
Introduction of SSA's Inspector General..........................    54
Justification of Estimates for Appropriations Committees.........   142
Medicare Cost-Sharing............................................   127
Non-Work SSNs....................................................    72
Official Time....................................................   135
Opening Statement of the Commissioner........................2, 3, 4, 6
Opening Statement of the Inspector General.......................    56
Operating Plan...................................................    82
Outreach.........................................................    86
Overuse and Misuse of SSNs.......................................    66
Potential Conflicts with PricewaterhouseCoopers..................    43
Pre-effectuation Reviews.........................................   119
Preparing for Privatization......................................   137
President's Budget...............................................    53
President's Commission to Strengthen Social Security.............    75
Private Sector...................................................    77
Privatization....................................................   141
Program Integrity................................................    89
Qualifying and Requalifying Individuals for SSI Disability.......    39
Questions for the Record.........................................    73
Research and Demonstration Projects:
    Under Section 234............................................   125
    Under Sections 1110 and 1115.................................   127
Research and Demonstration Projects under Section 234............   125
Research and Demonstration Projects under Sections 1110 and 1115.   127
September 11th...................................................    78
Service in Field Offices.........................................   123
Service to Beneficiaries.........................................    51
Service Delivery.................................................    73
Social Security Numbers (SSNs):
    Death Master File............................................    67
    Enumeration at Birth.........................................     5
    Homeland Security and the SSN................................    64
    Improving the Enumeration Process............................     5
    Non-Work SSNs................................................    72
    Overuse and Misuse of SSNs...................................    66
    SSN's of Deceased Individuals................................    65
SSA Does a Good Job..............................................    53
SSA's Computer Systems...........................................    50
SSI High Risk Designation........................................    42
SSI Overpayments.................................................    44
SSN's Deceased Individuals.......................................    65
Staffing.........................................................   139
Staffing:
    Full-Time Equivalents and Workyear History...................    98
    Workloads and Beneficiaries..................................   100
    Workyears and Full-Time Equivalents..........................    97
Statements:
    Full Statement for the Record of the Commissioner............     9
    Full Statement for the Record of the Inspector General.......    56
    Limitation on Administrative Expenses........................    28
    Office of the Inspector General..............................    30
    Opening Statement of the Commissioner....................2, 3, 4, 6
    Opening Statement of the Inspector General...................    54
    Payments to Social Security Trust Funds......................    21
    Special Benefits for Disabled Coal Miners....................    23
    Supplemental Security Income.................................    25
Status of Trust Funds............................................  2, 3
Telephone Access at Canton Field Office..........................    49
Telephone Service...........................................35, 51, 121
Ticket to Work.............................................87, 124, 140
Ticket to Work and Work Incentives Improvement Act...............   139
Workloads and Beneficiaries......................................   100
Workloads and Staffing...........................................    91
Workyears and Full-Time Equivalents..............................    97

                  Corporation for Public Broadcasting

Community Service Grants (CSGs)...........................294, 301, 306
CPB Appropriation Request and Justification FY 2003 and FY 2005 
  Submitted for Record...........................................   324
Digital Conversion.............................................301, 305
Digital Conversion:
    FCC Deadlines..............................................301, 305
    Table of Digital Costs.......................................   320
Digital Conversion Request.....................................293, 304
Digital Conversion Request:
    PTFP Funding.................................................   293
Digital Costs Table..............................................   320
Digital Funding................................................300, 303
Distribution of Funds............................................   301
FCC Digital Conversion Deadlines...............................301, 305
Formula for Allocating CPB's Federal Appropriation...............   322
ITVS Funding...................................................307, 319
Letters to Traditional Values Coalition..........................   287
NPR..............................................................   284
NPR:
    Corrections Policy...........................................   291
    Editorial Control............................................   285
    Letters to Traditional Values Coalition......................   287
    Operating Budget.............................................   286
    President, Kevin Klose.......................................   285
    Report Regarding the Traditional Values Coalition............   284
    Web Site Retraction of TVC Story.............................   290
NPR Corrections Policy...........................................   291
NPR Operating Budget.............................................   286
NPR President, Kevin Klose.......................................   285
NPR Web Site Retraction of TVC Story.............................   290
Objectivity and Balance..........................................   295
Overall Support..................................................   298
Production.......................................................   299
PTFP Funding for Digital Conversion..............................   293
Public Broadcasting Digital Cost Detail Table....................   320
Questions for the Record.........................................   298
Ready to Learn.................................................296, 308
Ready to Teach...................................................   312
Relationship of CPB to NPR and PBS...............................   299
Revenue by Source Chart, FY 2000.................................   323
Sources of Revenue for Public Broadcasting.......................   294
Sources of Revenue:
    Pie Chart....................................................   323
Statement of Robert T. Coonrod...................................   275
Statements:
    Robert T. Coonrod............................................   275
Traditional Values Coalition Report on NPR.......................   284
Underwriting Guidelines..........................................   295
Written Testimony of Robert T. Coonrod for the Record............   278

                Institute of Museum and Library Services

Administrative Costs.............................................   412
Appropriations Subcommittee......................................   413
Biography:
    Robert S. Martin, Director...................................   378
Budget:
    Administrative Costs.........................................   412
    Appropriations Subcommittee..................................   413
    Justification of Estimates...................................   426
    Opening Statement............................................   363
    Private Funding..............................................   406
Initiative to Recruit and Train Librarians.......................   380
Justification of Estimates for Appropriations Committee..........   426
Libraries:
    Libraries and the Internet...................................   406
    Libraries Serving All Generations............................   381
    Library Websites.............................................   402
    National Commission on Libraries and Information Science.....   408
    Technology in Libraries......................................   380
Libraries and the Internet.......................................   406
Libraries Serving All Generations................................   381
Library Websites.................................................   402
Meeting Community Needs..........................................   405
Museums:
    Supporting Conservation in Museums...........................   407
National Commission on Libraries and Information Science.........   408
Opening Statement................................................   363
Private Funding..................................................   406
Questions for the Record.........................................   405
Reauthorization..................................................   414
Statements:
    Full Statement for the Record................................   366
    Opening......................................................   363
Supporting Conservation in Museums...............................   407
Technology:
    Library Websites.............................................   402
    Libraries and the Internet...................................   406
    Technology in Libraries......................................   380
Technology in Libraries..........................................   380
21st Century Librarian Initiative:
    Opening statement............................................   364
    Initiative to Recruit and Train Librarians...................   380
    Questions for the Record.....................................   410

        National Commission on Libraries and Information Science

Biography........................................................   396
    Biography of Commissioner Jack E. Hightower..................   397
    Biography of NCLIS Chairperson Martha B. Gould...............   396
Bookmobiles and Cybermobiles.....................................   403
Consultation With Private Libraries..............................   401
Dissemination of Commission Reports..............................   401
FY 2003 Appropriations Justification.............................   485
    Agency Administrative Requirements...........................   499
    Amounts Available for Obligation.............................   501
    Appropriations History.......................................   507
    Background...................................................   488
    Budget Authority by Object Class.............................   503
    Budget Authority and Outlays.................................   502
    Disaster Preparedness and Emergency Response.................   498
    Federal Information Dissemination Policy.....................   494
    FY 2000 Meetings.............................................   512
    FY 2001 Meetings.............................................   512
    FY 2002 Meetings.............................................   513
    FY 2003 Program Description and Objectives...................   491
    International Information Policy.............................   495
    Library Statistics and Surveys...............................   496
    Members of the U.S. National Commission on Libraries and 
      Information Science........................................   509
    National Information Policy..................................   495
    NCLIS Organization Chart.....................................   511
    Policy, Planning and Advice..................................   492
    Salaries and Expenses........................................   487
    Services for Special Populations.............................   497
    Staffing History.............................................   508
    Summary of Changes From FY 2002 to FY 2003...................   504
    Table of Contents............................................   486
Internet Availability in Public Libraries........................   403
Introduction of Congressman Gibbons..............................   398
Library Websites.................................................   402
NCLIS is a Permanent Agency......................................   400
Opening Statement of Martha B. Gould.............................   381
    Conclusion...................................................   383
    FY 2003 Budget...............................................   382
    Independence of the Commission...............................   383
    School Libraries.............................................   382
Prepared statement of Martha B. Gould............................   384
    Conclusion...................................................   395
    What changes should be made to improve the operations of 
      NCLIS?.....................................................   393
    What has NCLIS accomplished?.................................   386
    Why should NCLIS be funded at the requested level?...........   392
    Why should NCLIS continue?...................................   390
Questions Submitted for the Record from Congressman David Obey...   415
    Commission Accomplishments...................................   423
    Commission Vacancies.........................................   420
    Elimination of the Commission on Libraries...................   421
    Library Services Act Reauthorization.........................   425
    Libraries Training...........................................   422
    Roles of NCLIS and IMLS......................................   420
Questions Submitted for the Record from Congressman Ralph Regula.   415
    Elimination of the Commission on Libraries...................   415
    Homeland Security............................................   418
    School Libraries.............................................   419
Remarks of Congressman Gibbons...................................   398
    Importance of the Commission.................................   398
Role of the Library Following a Disaster.........................   402
School Libraries.................................................   403
Statement of Commissioner Hightower..............................   399
    Conclusion...................................................   400
    Information Needs Following a Disaster.......................   399

                                

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